The Tower Hamlets Pensions Committee met to discuss key issues affecting the Local Government Pension Scheme (LGPS), including the government's response to the 'Fit for the Future' consultation, the LGPS 'Access and Fairness' consultation, and the fund's risk register. The committee also reviewed the terms of reference, membership and future meeting dates, and received updates on pension administration, scheme engagement, and annual benefit statements.

Appointment of Vice-Chair

Councillor Amin Rahman was appointed as Vice-Chair of the committee.

Terms of Reference and Membership

The committee noted its terms of reference, membership, and dates of future meetings for the municipal year 2025-26, as detailed in the Pensions Committee Terms of Reference Membership Quorum and Dates of Meetings 2025-26. Councillor Mayim Talukdar raised a question regarding the vacant position for an admitted bodies representative and the scheduling of meetings around Eid, which falls on 19 or 20 March.

Pension Board Update

The committee received an update from Mr John Jones, Independent Chair of the Pension Board, who highlighted the importance of promoting the benefits of the Pension Fund to new starters, addressing the risk register, and stressing the need for knowledge and skills training for both board and committee members.

Government Response to 'Fit for the Future' Consultation

The committee discussed the government's response to the LGPS Fit for the Future Consultation, which introduces significant reforms in mandatory asset pooling, local investment, and governance.

Key points:

• Mandatory pooling of all assets by 31 March 2026.
• Disclosure of local investment ambition by the same date.
• Implementation of governance and reporting requirements in line with the Scheme Advisory Board's (SAB) good governance approach.

Colin Robertson, Independent Investment Advisor (Pensions Committee), explained that the reforms mean a transfer of power from the committee to the London CIV, particularly in strategic asset allocation. He noted that the London CIV will be responsible for manager selection and will have more discretion in investment decisions, while the committee will retain control over responsible investment and ESG¹ factors.

Steve Turner, Senior Investment Consultant from Mercer, advised the committee to understand what needs to happen to ensure that all assets are under the oversight of the London CIV, and to be very clear and specific in the investment objectives given to the London CIV.

James Russell Stracey, from the London CIV, assured the committee that the London CIV is planning for the new roles and responsibilities, including expanding the investment team and bringing in a strategy service provider. He also mentioned plans to harmonise property portfolios and rationalise funds to bring down costs.

Councillor Mayim Talukdar asked about the impact on the board's influence in local investment. Colin Robertson clarified that the committee would still have responsibility for the approach to local investment and a range for the percentage of the fund to be invested locally, while the London CIV would conduct due diligence on potential investments.

Councillor Peter Golds asked how many London local authorities are in the London CIV. It was clarified that there are 32 local authority pension funds in London, including the City of London, that come under the London CIV.

Councillor Amin Rahman asked how members can have a say on the investment of such a large amount of money. It was clarified that the Secretary of State has decided to consolidate the current arrangement, and pooling is now moving to the next stage.

The committee agreed to note the report and the government's response to the consultation.

LGPS 'Access and Fairness' Consultation

The committee discussed the LGPS Access and Fairness Consultation, which addresses survivor benefits, the gender pension gap, opt-out rates, forfeiture rules, and technical amendments related to the McCloud remedy.

Paul Audu, Head of Pensions and Treasury (Interim), explained that the key element of the consultation is the government trying to close the gender pension gap that exists, which appears to impact female employees the most. The other issues the government is trying to deal with are inconsistencies in survival benefits and the opt-out rates that undermine retirement security, especially for the low paid.

Councillor Mayim Talukdar requested that the draft consultation response be brought back to the meeting for review. She also raised concerns about the impact of survivor's benefits on liabilities.

Councillor Peter Golds commented that the word consultation always means the deal is done, and the government is taking the local government pension funds and consolidating them into a series of great big ones.

The committee agreed to note the report and delegate authority to officers to draft and submit a response to the consultation, in consultation with the Chair of the Pensions Committee, by the deadline of 7 August 2025, subject to receiving the draft response.

Annual Benefit Statements (ABS) 2025

The committee discussed the annual benefit statements (ABS) 2025. Paul Audu stated that the report was self-explanatory, and he was happy to take any questions. He confirmed that the team is working to meet the deadline of 31 August. The committee agreed to note the report and agree to the recommendation on the agenda.

Pensions Administration Report March 2025

The committee discussed the Pensions Administration Report March 2025. Councillor Amin Rahman asked about the performance against CIPFA² timelines, suggesting timelines. He asked how the performance compares with other London boroughs and if there is anything to be worried about.

Ahsan Khan explained that there is no direct comparison with other London boroughs, other than SIPA has a standard set of KPIs³, to which all funds measure themselves against. He added that the pension regulator also operates their own set of KPIs, so you can choose between those KPIs.

Councillor Mayim Talukdar noted that a large proportion of Asian Bangladeshi are not in the pension scheme and asked if the data could be broken down in terms of gender to see whether as an organisation there are more women not accessing the pool. She also noted that school employee membership seems to be small compared to what we have and asked if there was any reason why.

It was clarified that the access and fairness consultation is dealing with that issue at its core and that schools are in two paths, with non-teaching staff of schools able to join the LGPS, and teaching staff in the teachers' pensions.

The committee agreed to note and agree the recommended page number 31 to agenda.

Scheme Engagement and Communications Report

The committee discussed the Scheme Engagement and Communications Report. Councillor Mayim Talukdar asked about equalities data on the membership and on the fund. It was explained that what will come out from the data will be collecting will obviously support all that, because the whole idea of access and fairness then underpins equality line to do is to make it fair.

The committee agreed to note this, agreed the recommendation page number 61 to agenda.

Pension Fund Risk Register 31 March 2025

The committee discussed the Pension Fund Risk Register 31 March 2025. Colin Robertson commented that the risk register is too specific and should be written in a more general manner. Councillor Aminur Rahman raised the point that there are a number of risks that have gone from orange to red, notably the risk of London SEV and the investment managers underperforming. He asked how we're going to keep an eye on that going forward.

It was explained that the government requires the fund and all funds to work with them collaboratively and also from a governance perspective is to ensure that we continue to hold them to account.

Councillor Mayim Talugdar asked if we are overexposing ourselves in the sense of transferring all the assets to the London SEV. It was clarified that this is something that we've been mandated to do, so it's not something that was of our own volition.

The committee agreed to note and agree the recommendation page number 16 on the agenda.

Training Event

The committee discussed training events. Paul Audu explained that training has now become a very important key issue because of the massive changes that the government is obviously pushing through. He said that offices will be redesigning that training program, so the strategy and the training plan and how training will be deployed, so a combination of on-site and off-site training and all of that, and of course the frequency of the training will need to be looked at and redesigned.

Function Committee Work Plan

The committee noted the Function Committee work plan.

Exclusion of Press and Public

The committee resolved to exclude the press and public from the remainder of the meeting for the consideration of the Section Two business on the grounds that it contains information defined as Exempt in Part 1 of Schedule 12A to the Local Government Act, 1972.