The Pension Board of Harrow Council met on Thursday 20 March 2025 to review the administration and financial performance of the Pension Fund, as well as its risk management and future work programme. The meeting was scheduled to cover updates on key performance indicators, the audited annual report and accounts for 2023-24, and the quarterly actuarial funding position.

Pensions Administration Update with Key Performances

A report was scheduled to provide the Board with information regarding the administration performance of the London Borough of Harrow Pension Fund for the quarter ending 31 December 2024. This update was expected to detail the number of tasks completed and outstanding, as well as any complaints received. The report indicated that, on average, 66% of all tasks were completed within the target time during this period, an improvement from the previous quarter's 58%. No new complaints were lodged during this period, and there were no new breaches of the log of breaches. The report also noted that preparatory work for the 2024-25 Annual Benefit Statements had begun, and data collection for the McCloud case remediation was continuing. The new payroll system, implemented in November 2024, was reported to be successful in paying pensioners. The deadline for LGPS funds to have Pension Dashboards live is 31 October 2025, and conversations with suppliers were ongoing.

Review of Pension Fund Committee Items

This item was scheduled to summarise the matters considered by the Pension Fund Committee at its meeting on 3 March 2025. The Committee had received the Audited Pension Fund Annual Report and Accounts for 2023-24, an update on the funding position as at 31 December 2024, and an update on London CIV and Investment Pooling Arrangements. The Committee also reviewed the Pension Fund Risk Register, noting that the Pensions Regulator's General Code of Practice required separate cyber risk and conflict of interest policies, which were not yet in place. The Committee had also received the minutes of the Pension Board meeting held on 12 December 2024. The report highlighted that the market value of investments had increased to £1.1bn, with the Fund returning 1.1% net of fees for the quarter, underperforming its benchmark by 0.7%. Over a 12-month period, the Fund underperformed its benchmark by 1.5%, returning 10.8%.

Audited Pension Fund Annual Report and Accounts for 2023-24

The Board was scheduled to receive the Audited Pension Fund Annual Report and Accounts for the financial year ending 31 March 2024. The report indicated that the Fund Revenue Account showed the Fund was cash flow negative by approximately £2.3m for the year. This was due to benefits paid exceeding income by £9m, and management and administration costs of £4.3m, offset by investment income of £11.1m. The Net Assets Statement showed an increase in the market value of the Fund's investments by £105m, bringing the total net assets to £1,057.5m. The number of scheme members had increased to 19,764. The audit of the accounts found one immaterial misstatement.

Quarterly Actuarial Funding Position Update

This report was scheduled to present an interim funding level update for the London Borough of Harrow Pension Fund as at 31 December 2024, showing changes since the 2022 triennial valuation. The estimated funding level was reported as 135%, a significant improvement from the 96% recorded at the 31 March 2022 valuation. This improvement was primarily attributed to an increase in interest rates and their impact on Gilt yields, which raised the discount rate applied to future liabilities from 4.4% to 6.9%. The report noted that the required rate of return to achieve 100% funding had increased to 4.8%, with the likelihood of achieving this return now at 89%.

Review of Pension Fund Risk Register

The Board was to review the updated Pension Fund Risk Register as at 3 March 2025. The register categorised risks into broad areas including Regulatory, Governance, Funding (assets and liabilities, and investment strategy), Security, Operational, Cash flow, Cyber security, Accounting, and Conflict of Interest. Two new categories, Cyber Security and Conflict of Interest, had been added. The report highlighted that three of the four red risks related to investment performance, which were influenced by economic and market events outside the Fund's control. The remaining red risk concerned the regulatory impact of court judgements, particularly the McCloud Judgement. The risk of a cyber security breach was rated as amber, and a draft Cyber Security Policy was to be developed. The risk of a breach of Data Protection Regulation had moved from green to amber.

Pension Board Work Programme 2024-25

This item was to review the Pension Board's work to date and outline forthcoming meeting dates for the 2025-26 municipal year. Incomplete items from the 2024-25 work programme, including an update on the implementation of the Pensions Regulator's Code of Practice and the Pension Board Annual Report for 2023-24, were recommended to be carried forward to the next municipal year.