The Pension Board of Sutton Council met on Thursday 29 October 2026 to discuss pension administration performance and projects, the annual report and accounts, governance and risk updates, and the work programme. Key decisions included noting the pension administration performance update and congratulating the teams on their award, noting the annual report and accounts, and noting the governance and risk update.

Pension Administration Performance Update

Tom Taylor, Head of Pensions Administration, presented an update on the performance of the Shared Pensions Administration Service. He noted that while the number of outstanding processes had risen from 623 to 818 in the quarter, this figure had since fallen to 799. The increase was attributed to the annual year-end return exercise, which identified 383 leavers, and a suspension of SCAPE transfer rates. Digital payslip uptake had increased to 810 pensioner members. Taylor reported that the service had cleared a backlog of cases overdue by three months or more and had set a new standard of no more than 10% of cases being overdue, with no more than 10% of those being overdue by more than one month. He was pleased to report that, as of the meeting date, there were zero cases overdue by 31 days or more. Taylor also highlighted that 99% of retirements and 100% of deaths were processed on time, despite the increase in overdue processes. The board noted the update and congratulated the teams on winning the LAP Investment Awards.

Pension Administration Projects Update

Tom Taylor provided an update on ongoing pension administration projects. He explained that the annual returns exercise, which involves writing to employers to gather pay information for annual benefit statements, had been completed with 100% of statements issued to deferred members and 93.4% to active members. A breach of law had occurred regarding the McCloud Remedy Project, as legally compliant annual benefit statements could not be issued due to delays in receiving necessary software. This breach had been reported to the Pensions Regulator. Taylor confirmed that 100% of data for the McCloud Remedy project had been received from employers, validated, and loaded onto the system, with the team awaiting software releases to implement the necessary calculations. The project deadline is 31 January 2027. An update was also given on the Access and Fairness project, which addresses age and gender discrimination in death grants and survivor pensions. The project had met its initial disclosure and identification deadlines, with 12 members identified as entitled to a death grant payment and 690 survivor pensions requiring recalculation. The board noted the update.

Annual Report and Accounts 2025/26

Catherine Gray, Head of Pensions Investments and Treasury, presented the annual report and accounts for 2025/26. She reported that the fund's assets had exceeded £1 billion, with investment returns of 9.1% for the year, exceeding the actuary's expected return of 5.3%. The fund remained cash flow positive, with contributions exceeding benefits paid out by just under £3 million. Membership had increased slightly, contributing to a decrease in the cost of running the fund per member. Gray thanked the team for their hard work in producing the comprehensive document. Councillor Sunita Gordon praised the report for being well-laid out and easy to understand. The board noted the report and recorded congratulations to the teams for the award.

Governance and Risk Update

Tom Taylor provided an update on governance and risk. He highlighted that the fund had one red risk, Risk 21 (Administration), relating to software limitations preventing legally compliant administration of the LGPS, particularly concerning the McCloud Remedy and annual benefit statements. This risk remained red due to ongoing delays with the software provider. Amber risks included Risk 15 (Administration) concerning the financial and resource impact of retrospective legislative changes, Risk 10 (Governance) relating to the knowledge and skills of committee and board members following recent elections, Risk 3 (Governance) concerning cyber security, Risk 16 (Funding & Investments) on climate change and biodiversity loss, Risk 4 (Funding & Investments) on adverse market movements, and Risk 22 (Funding & Investments) concerning the implementation of the Fit for the Future pension reforms. Taylor also confirmed that the procurement for new pensions administration software was progressing, with a preferred supplier identified and governance processes with Kingston Council underway. He noted that the Pension Board was now at full capacity with the appointment of new member and employer representatives. The board noted the update.

Work Programme Update

Tom Taylor presented the updated work programme for the Pension Board. Key items for upcoming meetings included budget monitoring, the pension account audit findings report, and the Responsible Investment and Stewardship update. Vicky Goddard, Director of Finance, provided an update on the council's audit, indicating that the pension fund audit was expected to conclude at the end of November. The board noted the updated work programme.

Pension Committee Update

Catherine Gray provided an update on the Pension Committee's discussions, focusing on investments. She reported that the fund's assets had reached £1.14 billion, with a strong quarterly return of 7.2%, although slightly behind the benchmark. The committee had decided to move out of two existing equity funds into a new multi-manager fund launched by the London CIV. Property and the Renewable Infrastructure Fund had struggled in recent years. Gray also explained the strategic asset allocation targets and ranges, emphasizing the importance of diversification. She provided an overview of the Fit for the Future changes, including new roles such as the Senior LGPS Officer and Independent Person, the requirement for independent governance reviews, and mandatory training for committee and board members. The board noted the report and the minor amendments to the Investment Strategy Statement.

LGPS Fit for the Future Update

Catherine Gray provided an update on the LGPS Fit for the Future reforms. She confirmed that the final regulations and guidance had been published, focusing on asset pooling, investment strategy statements, and fund governance. The Fund's assets were largely pooled with the London CIV, with an Investment Management Agreement signed to formalise this. Minor amendments to the Investment Strategy Statement were required to ensure compliance with the new regulations, including clarifying local investment targets and acknowledging Buckinghamshire Pension Fund's admission to the LCIV. Key governance changes included the appointment of a Senior LGPS Officer and an Independent Person by December 2026, enhanced training requirements for committee and board members, and the commissioning of an Independent Governance Review by March 2028. The board noted the update and the minor amendments to the investment strategy statement.

The meeting concluded at 11:33.