The Pension Committee of Sutton Council met on Tuesday, 1 April 2025, to review the draft Business Plan and Budget for the upcoming financial years, alongside updates on the fund's administration, investments, and governance. The meeting also covered the committee's training plan and the work programme for the year ahead.

Business Plan 2025-28 and Budget 2025-26

The committee was scheduled to consider the draft Business Plan for 2025-28 and the draft Budget for 2025-26 for the London Borough of Sutton Pension Fund. These documents, produced in accordance with best practice and regulatory requirements, demonstrate the fund's commitment to its business and financial planning responsibilities. The Business Plan outlines ongoing annual activities and one-off projects, while the Budget details the fund's anticipated expenditure on management expenses, including investment management expenses for the first time. The report recommended the approval of both the Business Plan and the Budget.

Pension Administration Performance Update

An update on the key administration performance of the Shared Pensions Administration Service was scheduled for discussion. The report indicated a positive downward trend in outstanding processes, with improvements attributed to successful recruitment and new work allocation methods. The number of overdue processes, particularly those over three months old, had fallen significantly. The report also noted that service level agreement (SLA) performance remained generally positive, with targets for Pension Regulator (tPR) priority cases like retirements being exceeded. Officers aimed to clear the backlog of cases overdue by three months or more by July 2025, with temporary additional capacity arrangements extended to facilitate this. No breaches of law, internal dispute resolution procedure (IDRP) cases, or complaints had been reported since the previous meeting.

Pension Administration Projects Update

The committee was to receive an update on key administration projects. This included progress on the national Pensions Dashboard initiative, a government project to allow pension savers to view all their pensions online. The Local Government Pension Scheme (LGPS) has a staging date of 31 October 2025 to connect to the dashboard, requiring the fund to work with an Integrated Service Provider (ISP). The fund was in the process of appointing an ISP and was focusing on data improvement to ensure accuracy.

The report also provided an update on the McCloud Remedy project, which aims to rectify pension benefits affected by the government's reforms. Data validation and loading onto the pension administration system were ongoing, but the project was dependent on system upgrades from Civica, which had experienced delays. The Guaranteed Minimum Pension (GMP) reconciliation project was reported to have concluded in February 2025, with adjustments made to 361 pensions in payment.

Governance and Risk Update

A review of the fund's risk register was scheduled. Risks were categorised under Administration, Funding and Investments, and Governance. The Administration risks were rated as Amber overall, with one Red-rated risk concerning the failure of the software provider to deliver compliant software. Amber risks included incomplete or inaccurate member data, the impact of changes to LGPS regulations, and the failure to protect the fund's key information from cyber-attacks. A new Amber risk was added to reflect uncertainty around the fit for the future pension reforms and the ability of the fund and its pool, the London Collective Investment Vehicle (LCIV), to meet new requirements. The report also provided updates on the Employer Forum and administration charges levied against employers.

Committee Training Plan

The committee was to review a draft 12-month training plan for its members. This plan was developed following a National Knowledge Assessment, which identified knowledge gaps in areas such as Actuarial Methods, Standards and Practices, and Pensions Administration. The proposed training, to be delivered through Hymans' LGPS Online Learning Academy, aimed to address these identified gaps and specific requests from committee members.

Work Programme Update

A draft programme of work for Pension Committee meetings over the next year was presented for review. The indicative agenda items for the forthcoming year included regular updates on training, current issues, investment performance, administration, governance, and the London CIV, with specific topics varying by quarter.

Investment and Manager Performance to 31 December 2024

The committee was to review the investment performance of the fund for the quarter ending 31 December 2024. The market value of the fund's assets had increased to £989 million. The fund outperformed its benchmark over the quarter and for the one-year period, driven by an overweight position in equities. However, three and five-year returns underperformed against benchmarks. The report detailed performance by individual investment managers and asset classes, noting that the fund's actual asset allocation was outside strategic ranges in several areas, including equities. The funding level as at 31 December 2024 was reported as 146%, a significant improvement since the last formal valuation in March 2022.

Pension Fund Accounts 2023/24 Audit Outcomes Report

This report presented the Annual Auditors Report for the 2023/24 Pension Fund Accounts, completed by KPMG. The report indicated that the audit was complete and an unmodified opinion was intended for the financial statements. The report detailed the audit approach and findings, noting a control deficiency related to segregation of duties for posting and reviewing journals.

London Collective Investment Vehicle Update

An update on the London Collective Investment Vehicle (LCIV) was scheduled. This included the appointment of a new Chief Investment Officer, Jenny Buck, and updates on government policy developments regarding LGPS investments. The report detailed the pooling position, with £34.2 billion in pooled assets, of which £19 billion was managed by London CIV. It also outlined new products offered by LCIV and enhancements to existing strategies, alongside a refined fund and investment manager monitoring framework.