The Chair, Mr John Jones stated item 9.2, Triennial Actuarial Valuation 2025 and Funding Update did not need to be part of the restricted agenda and as such the training by Hymans Robertson would be presented first.

Thereafter the Board would consider the reports that were part of the ‘open’ agenda before taking item 9.4 first and then the remainder of the restricted agenda.

Apologies for absence were received from Nneka Oroge, Active Fund Members’ representative.

There were no declarations of pecuniary interest made by Board members.

To confirm as a correct record of the proceedings the unrestricted minutes of the meeting of the Pensions Board held on 8^th July 2024.

The unrestricted minutes of 8^th July 2024 were AGREED and APPROVED as an accurate record of the meeting.

Matters arising

Mr Thompson asked for further information in relation to some of the action points in the minutes. He asked:

·       If the Pension Fund accounts had met the deadline for submission;

·       If the 10 outstanding cases referred to under item 7.4 had been resolved; and

·       Confirmation that the compliance statement had been completed.

Ms Julie Lorraine, Corporate Director for Resources and Section 151 Officer and Mr Paul Audu, Interim Head of Pensions and Treasury responded to the questions raised.

·       The accounts were on course to meet the submission deadline for Deloitte’s to 22/23 but there remained a risk to 23/24 with the EY timetable.

·       The 10 outstanding cases were being worked on, with help from legal colleagues.

·       The compliance statement was being worked on.

To consider any written submissions from Fund Members/Stakeholders.

(Submissions must be received by the Clerk to the meeting no later than 5.00p.m. on the day before the meeting.)

There were no submissions from fund members.

There were no submissions/responses from the Pensions Committee.

Mr Paul Audu, Interim Head of Pensions and Treasury stated the report provided members with an update on the Employer engagement and communications policy of the Fund. Mr Audu referred to the bullet points stated at paragraph 3.2 and said these were the current issues the LGPS had to engage with employers about, who are part of the scheme. Mr Audu said an Employers Information Forum was planned for January 2025 to engage with employers.

In response to comments and questions from members the following was noted:

·       The Board welcomed the idea of holding a Pension Fund Information Forum in January 2025. The Board stated they had been asking for this for some time now.

·       Referring to the bullet points at paragraph 3.2, Mr Thompson said the items listed were strategic heavy subjects and perhaps the better approach would be to promote the benefits of the LGPS, the options available and demystify some of the myths, about investing in a pension. Mr Audu responded stating that the agenda for the AGM would be brought back to the November meeting of the Board and Committee for approval.

·       Ms Lorraine concurred with the approach outlined and said it should be simpler. She said whilst it was important to engage with current employers, it was equally important to promote the scheme to prospective employers who are not in the scheme. This was key to the longer-term sustainability of the fund given the demographic younger aged profile of those not joining.

The Pension Board RESOLVED to NOTE and AGREE the recommendations being made to the Pensions Committee, for its meeting of 30^th September 2024 that:

The Pensions Committee is recommended to:

1.    Note the content of this report.

2.    Agree officers’ proposal to hold a Pension Fund Information Forum for scheme employers and members in January 2025, at TH Town Hall, date and the event agenda to be agreed with the Fund Actuary and Investment Consultant.

3.    Note that officers will provide an update on the proposed Forum planning including a draft agenda to the Committee in November for consideration and, if satisfied, approval.

Mr Paul Audu, Interim Head of Pensions and Treasury presented the report and said the report updated members in relation to the governance and legislative issues affecting the Fund. He said it informed members of the developments in the LGPS and regulatory environment, policy changes and pooling.

In response to comments and questions the following was noted:

·       Referring to appendix 2 of the report, Mr Jones the Independent Chair asked how the Government Actuary tracked the progress of funds. Mr Audu responded stating that the LBTH LGPS was not on the list referred to on page 123 of the agenda has there were no red flags, and the Fund was in surplus.

The Pensions Board RESOLVED to NOTE and AGREE the recommendation being made to the Pensions Committee for its meeting of 30^th September that:

The Pensions Committee is recommended to:

1.    Note the Government Actuary’s Department (GAD) 2022 Section 13 Report published on 14 August 2024 (Appendix 1);

2.    Note the Government Actuary’s Department (GAD) 2022 Section 13 Report published on 14 August 2024 – separate appendices (Appendix 2);

3.    Note the TH Pension Fund’s 2022 Section 13 results;

4.    Note the implications of the GAD 2022 Section 13 report on the 2025 actuarial valuation;

5.    Note the exit credit cases currently under consideration; and

6.    Note the current government action to pursue efficiencies in the LGPS including a Pensions Investment Review and a Call for Evidence.

Mr Paul Audu, Interim Head of Pensions and Treasury said the report provided an update on Pension Administration and the performance of the scheme for the quarter up to June 2024.

In response to comments and questions from members the following was noted:

·       Referring to the table at paragraph 3.1 of the report, Mr Thompson asked what action had been taken in relation to ‘frozen’ members and the 30% of undecided members? Mr Audu said ‘frozen' members, had to decide whether they wanted to leave their pension with LBTH LGPS or move it elsewhere. In respect to the undecided members, efforts are made by officers to encourage them to become full members.

·       In reference to paragraph 3.2, and the delay in despatching the Annual Benefit Statements on time, the Board asked if the delay affected those who receive their statements via post, online or both? Mr Audu said there had been a technical hitch, whereby the system was locked. However, he worked with IT Officers to resolve this as soon as possible. There had been a delay of 2 days.

·       The Board asked for an update in respect to staffing numbers and the number of vacancies in the team. Mr Audu informed members a new team member had joined and another was expected to join by the end of the week. He said he would continue to make effects to recruit to the other unfilled positions by the end of the year.

The Pensions Board RESOLVED to NOTE and AGREE the recommendations being made to the Pensions Committee for its meeting on 30^th September that:

The Pensions Committee is recommended to:

1.    Note the contents of this report;

2.    Note the employer admissions in the pipeline;

3.    Note the late despatch of Annual Benefit Statements due to a technical hitch; and

4.    Note the progress and ongoing effort to improve the quality of the pensions data.

Mr Paul Audu, Interim Head of Pensions and Treasury said the report updated members in relation to the training arrangements for the Committee and Board. He said members of both the Board and Committee were required to complete training via the training portal and reminders had been sent to members. He said the National Knowledge Assessment was being launched on the 17^th September and required completion as soon as possible.

In response to comments and questions the following was noted:

o   The Hymans portal and the LGPS Online Learning Academy (LOLA) were one of the same thing. There were new modules on the online portal that members needed to complete.

o   It was suggested that instead of asking members to complete the modules as soon as possible, to set a target date for completion as each module took considerable time to understand and complete to a satisfactory level.

o   ACTION: Hymans Robertson to send a refreshed email to all members with a link to the online training, so members can access the new modules of training for completion.

The Pensions Board RESOLVED to NOTE and AGREE the recommendation being made to the Pensions Committee for its meeting of 30^th September that:

The Pensions Committee is recommended to:

1.    Note the content of this report.

2.    Note that Committee and Board members have been enrolled on the LGPS Online Learning Academy (LOLA) and will have received individual email confirmation of enrolment.

3.    Note that Committee and Board members can now access the LOLA portal to review the modules they have been enrolled to complete the learning at their own pace.

4.    Note that Hymans will be launching the 2024 National Knowledge Assessment (NKA) on 17 September 2024.

5.    Note that it is recommended that Committee and Board members commence the assessment as soon as possible after the launch date.

6.    Note that Committee and Board members will be provided with a link to the assessment prior to the launch of the NKA.

7.    Advise officers of any training completed and event(s) attended not recorded in the training log.

Mr John Jones, Independent Chair of the Board presented his annual report, which set out the work carried out by the Board for the financial year 2023-24.

In response to comments and questions from members the following was noted:

·       Members of the Board did not have any questions in relation to the annual report.

The Pensions Board RESOLVED to NOTE and AGREE to Annual report of the Pensions Board for 2023-24.

Mr Paul Audu, Interim Head of Pensions and Treasury said the work programmes of both the Committee and the Board for 2024/25 were appended to the report. He said many of the reports mirrored each other on both work programmes, to allow both the Board and the Committee to properly scrutinise and comment on the activities of the LGPS.

In response to comments and questions the following was noted:

·       Mr Thompson enquired if the Annual Funding and Investment Strategy would be coming to the Board and Committee? Mr Audu responded saying this would be added once the triennial valuation had been completed.

·       In respect to training, Mr Audu confirmed the training received by the Board today, on the Triennial valuation would be added to the log.

The Board RESOLVED to NOTE and AGREE the recommendations being made to the Pensions Committee for its meeting of 30^th September that:

The Pensions Committee is recommended to:

1.    Note the content of this report.

2.    Consider the Work Programme for the Committee and Board included in this report (Appendix 1) and (Appendix 2) respectively.

3.    Read this report in conjunction with the separate report titled “Training” to this Committee, and that Committee and Board members have been enrolled on the LGPS Online Learning Academy (LOLA) and will have received individual email confirmation of enrolment.

4.    Note that Hymans will be attending this meeting and the Board to provide training on actuarial valuation.

5.    Advise officers of any training completed and event(s) attended not recorded in the training log.

No other business was discussed by Board members.

In view of the contents of the remaining items on the agenda the Committee is recommended to adopt the following motion: “That, under the provisions of Section 100A of the Local Government Act 1972, as amended by the Local Government (Access to Information) Act 1985, the press and public be excluded 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.”

EXEMPT SECTION (Pink Papers)

The Exempt/Confidential (pink) papers for consideration at the meeting will contain information, which is commercially, legally or personally sensitive and should not be divulged to third parties. If you do not wish to retain these papers after the meeting, please hand them to the Democratic Services Officer present or dispose of them in the confidential bins.

The Chair MOVED the motion to exclude members of the press and public for the restricted (part 2) of the agenda. This was SECONDED by Mr Thompson, vice-chair of the Board.

It was RESOLVED:

“That, under the provisions of Section 100A of the Local Government Act 1972, as amended by the Local Government (Access to Information) Act 1985, the press and public be excluded 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.”

To confirm as a correct record of the proceedings the restricted minutes of the meeting of the Pensions Board held on 8^th July 2024.

The restricted minutes of 8^th July 2024 were AGREED and APPROVED as an accurate record of the meeting.

Mr Barry Dodds, from Hymans Robertson gave a presentation to the Board, which highlighted how the Actuarial Valuation is undertaken. He explained how the fund works, how the strategy is set, the current funding status of the LGPS Fund and the change in environment such as high inflation and investment outlook affect the performance of the fund. Mr Dodds outlined the main funding risks and valuation considerations for the 2025 Triannual valuation.

In response to comments and questions from members the following was noted:

o   ACTION: Referring to the heatmap, the Corporate Director for Resources Ms Lorraine asked if details could be provided from Club Vita of where Tower Hamlets members of the LGPS reside as the wider UK figures may not be representative of the makeup of the council’s workforce and noted that much of the valuation would focus on life expectancy and longevity.

·       Referring to the options slide and retaining the surplus, Mr Thompson asked how the investment strategy would change to deal with volatility. He asked if the option was to invest in more liquid assets. Mr Dodds confirmed it was.

·       In response to how government policy, impacts on projected assumptions made, Mr Dodds said modelling was used to consider these factors. For example, if a considerable amount of redundancies were projected this would impact the profile of the LGPS membership.

The Pensions Board RESOLVED to NOTE and AGREE the recommendations being made to the Pensions Committee for its meeting of 30^th September that:

The Pensions Committee is recommended to:

1.    Note the content of this report.

2.    Note that the estimated funding level of the pension fund was 163% at 30 June 2024.

3.    Note that Pension Fund returns resulting from the Committee’s investment decisions impact the estimated funding levels.

4.    Note that the Fund Actuary, Hymans will be attending this meeting to discuss their approach to the upcoming 2025 actuarial valuation and provide training. The training material is at Appendix 1.

5.    Note the 2025 actuarial valuation planning presentation appended to this report (Appendix 2).

Mr Paul Audu, Interim Head of Pensions and Treasury stated the report updated members on the 2023/24 Tower Hamlets Pension Fund year-end closing, the preparation of the Draft Pensions Fund Annual Report and Accounts and the ongoing work by EY LLP.

The Pensions Board RESOLVED to NOTE and AGREE the recommendations to the Pensions Committee for its meeting of 30^th September that:

The Pensions Committee is recommended to:

1. Note this report and progress with respect to the ongoing external audit work by EY LLP; and
2. Note the Guidance for LGPS Funds published by DLUHC in April 2024 appended to this report (Appendix 1).

The minute for this item is restricted.

Mr Paul Audu, Interim Head of Pensions and Treasury presented the Pension Fund Risk Register as at 30^th June 2024 report. He referred to the risks listed at paragraph 3.3 onwards and explained what action had been taken to mitigate against them.

The Pension Board RESOLVED to NOTE and AGREE the recommendations being made to the Pensions Committee for its meeting of 30^th September that:

The Pensions Committee is recommended to:

1. Note the detailed Risk Register appended to this report (Appendix 1).

Mr Pau Audu, Interim Head of Pensions and Treasury presented the Liquidity and Cashflow monitoring report as at 30^th June 2024. He said the report showed the cashflow forecast for 2024/25 and 2025/26. He said the forecast covers a two-year cycle, with a projected forecast of £11.6m positive net cashflow by 2025/26 without divesting from investments.

The Pension Board RESOLVED to NOTE and AGREE the recommendations being made to the Pensions Committee for its meeting of 30^th September that:

The Pension Committee is recommended to:

1. Note the Pension Fund liquidity and cashflow forecast 2024/25 to 2025/26 appended to this report (Appendix 1).

This report did not make the Pension Board agenda and therefore was not considered.