Agenda and minutes

The Chair welcomed everyone to the meeting. Attendees including a member of the public introduced themselves.

Apologies were received from the Chair Pauline Kettles. Cllr Chris Joannides, Vice Chair, Chaired the meeting in her absence.

Apologies for lateness were received from Cllr Ahmet Oykener.

Cllr Alev Cazimoglu was absent from the meeting.

To receive any declarations of interest.

No declarations of interest were received.

To agree the minutes of the previous meeting held on 26 June 2024.

Cllr Chris Joannides’ name is misspelt on pg.1.

The minutes of the previous meeting held on 26 June 2024 were AGREED.

To provide the Local Pension Board with an update on current pension issues, developments, and performance in relation to the Local Government Pension Scheme (LGPS).

Tim O’Connor, Exchequer Manager (Pensions), provided an update on pension developments and performance within the Local Government Pension Scheme (LGPS).

A new Secretary of State for Levelling Up, Housing, Communities, and Local Government has been appointed following the general election, prompting a government review of LGPS. Additionally, a Pension Committee Chair event on 14th October will offer an opportunity to gather relevant updates.

The Local Government Association’s national communications working group has approved a new initiative for new starters. It involves a 90-second video to help employers promote the benefits of the LGPS to new recruits.

The LGPS Governance Conference is scheduled for 30th-31st January 2025, and Pension Committee and Board members are encouraged to attend.

The contract with Heywood Ltd for the Altair system expires in March 2025. The Pensions team plans to extend the contract by five years through a direct award, considering the upcoming 3-year evaluation and other ongoing projects, making it an unsuitable time to switch providers.

The pensions team also reported the completion of Annual Benefits Statements in August. New team members Monica Dias (Data & Projects Team Leader) and Ana Dias (Senior Pension Officer) joined in August, with Sarah set to return from maternity leave in October. Their apprentice, Bursa, will start her college course in September.

Josiah Burton, Communications and Employer Liaison Officer, provided a brief update on the recent communications efforts regarding pensions:

• A recent Lunch and Learn session on pensions were well-received, with staff requesting more sessions.
• Webinars and seminars with HR are improving pension knowledge to better support new employees.
• In-depth pension sessions will begin in 2025 as part of "Phase 2" of the communications plan. "Phase 1" sessions held this year introduced basic pension information and advice.
• Communications on pension fraud prevention will be rolled out due to the rising incidents of fraud.
• The Communications team plans to utilise LinkedIn, targeting its 20,000 followers, and will post more information pension videos on the Enfield Council page.

Members asked for an update on the McCloud Reported error of figures. They were informed that the Pensions team are reviewing 5,000 members to see if they have any compensation due.

The report was NOTED.

To note the contents of this report and provide any feedback for the PPIC to take into consideration.

Ravi Lakhani, Head of Pension Investments, presented a report detailing the current funding position, cashflow forecast, and preparations for the 2025 valuation. As required by law, all UK pension funds undergo a triennial actuarial valuation. Enfield Council’s last formal valuation was completed in 2022, with the next due in 2025. As of 30th June 2024, the fund is in a strong position with a 122% funding level, meaning it holds 22% more assets than liabilities, maintaining stability since the 2022 valuation.

Despite the positive funding position, inflation has sharply increased since the last valuation, with pension benefits rising by 10.1% in 2023 and 6.7% in 2024. This inflationary pressure has resulted in higher benefit payments, impacting the fund’s cashflow as the payouts adjust in line with rising costs.

Several key risks have been identified in anticipation of the 2025 valuation:

• Investment Risk: There is an 80% likelihood of achieving a 5.5% return, but a 20% chance that returns may fall short due to factors such as geopolitical instability, global financial crises, or unforeseen black swan events.
• Inflation Risk: Higher inflation increases the cost of pension benefits, placing added strain on the fund.
• Longevity Risk: If members live longer than projected, it extends the liabilities of the fund.
• Climate Risk: Now considered a major risk, climate change impacts both pension members and the global financial markets.
• Cashflow Risk: The fund must ensure sufficient liquidity to meet future benefit obligations, a critical factor for sustainability.

To mitigate these risks, the fund is exploring an investment strategy that focuses on multiple income-generating assets.

As part of the 2025 valuation planning, the fund is reviewing several key areas, including:

• Employer Contribution Rates
• Investment Strategy
• Prudence Levels
• Risk Treatment
• Risk Management

While the fund is financially strong, some employers, such as Enfield Council, are under financial strain. This may lead to pressure from employers to reduce contribution rates, a matter that will need careful consideration to balance financial relief for employers with the long-term sustainability of the fund.

Board members expressed the desire to be involved in discussions about any proposed reductions in contribution rates. If Enfield Council requests such a reduction, they would like to review the information before it is presented to the Pension Policy & Investment Committee, ensuring they can contribute to or accept the proposals in advance.

The report was NOTED.

To note the contents of this report and the Enfield Pension Fund Governance Policy and Compliance Statement.

Ravi Lakhani, Head of Pension Investments, presented the Enfield Pension Fund Governance Policy & Compliance Statement, outlining the updates and changes as detailed in the report. The governance structure, membership, and roles of both the Local Pension Board and the Pension Policy & Investment Committee were reviewed.

Cllr Ahmet Oykener announced that, following a decision by the Council, he will no longer be able to sit on the Local Pension Board due to his membership on the Pension Policy & Investment Committee.

The Board have received a request from members of the public to make a presentation to the LPB.

Action: Law & Governance is to reference where in the Constitution it prohibits public presentations to the LPB and explore how such requests can be accommodated. To be put in the agenda for the next meeting.

The report was NOTED.

This report provides a quarterly update on developments at the London Collective Investment Vehicle (CIV).

Ravi Lakhani, Head of Pension Investments, provided an update on London CIV’s investment pooling activities. Enfield Council, along with all other London boroughs, has invested through London CIV, with approximately 54% of the Council's assets pooled in this organisation.

The new government has expressed strong support for pooling more pension assets. However, they aim for a greater proportion of these assets to be invested in the UK and are pushing for more consolidated funds, although they have yet to provide detailed guidance or explanations. A consultation is currently underway, and any policy announcements will be brought to the Board once released.

Historically, London CIV has been successful with equity funds and is still in the process of developing its private market. They will soon be launching two new funds: Nature-Based Solutions and Private Debt. The Pension Policy and Investment Committee will be interviewing London CIV for these upcoming funds.

The report was NOTED.

To note the contents of this report and the attached appendix which give details on the LAPFF company engagements for the quarter.

Ravi Lakhani, Head of Pension Investments, provided a brief update on the Local Authority Pension Fund Forum (LAPFF). The Enfield Pension Fund currently delegates its voting rights to external equity managers, who are instructed to align their actions with LAPFF recommendations. Recently, LAPFF has engaged with various companies on key issues, including human rights and climate change.

The report was NOTED.

To note the draft minutes of the last Pension, Policy and Investment Committee meeting held on Wednesday 31 July 2024.

The minutes of the Pension Policy and Investment Committee meeting held on Wednesday 31 July 2024 were NOTED.

No AOB were received.

To note the dates of the future meetings:

Wednesday 04 December 2024

Wednesday 12 March 2025

NOTED the next meeting date is 4 December 2024.