Agenda and minutes

The Board welcomed Mr Jagdeep Birdi to his first meeting as a representative of active members of the Pension Scheme from a scheduled body. He noted that 100 members of staff at Colville and Marlborough Primary Schools were members of the Pension Scheme.

None.

Any Member of the Committee, or any other Member present in the meeting room, who has a disclosable pecuniary interest, in a matter to be considered at the meeting is reminded to disclose the interest to the meeting and to leave the room while any discussion or vote on the matter takes place.

Members are also reminded that if they have any other significant interest in a matter to be considered at the meeting, whether registered or not, which they feel should be declared in the public interest, such interests should be declared to the meeting. In such circumstances Members should consider whether a member of the public, with knowledge of the relevant facts would reasonably regard the interest as so significant that it is likely to prejudice their consideration or decision making. If the Member considers that to be the case, they should leave the room while any discussion or vote on the matter takes place.

None.

The minutes of the 31 October 2023 meeting were agreed as an accurate record and signed by the chair.

Anerley Smith in her introduction of the report introduced two members of the administrative team who were at the meeting. One of the attendees was new to the team, who was to join alongside three other new starters in this quarter.

She reported that the IConnect system which enabled more streamlining and automation, was being introduced and it was a system used by many other boroughs.

In regard to the new employee bandings for April 2024, Jagdeep Birdi requested communicating the changes to school staff would be more effective if it came via head teachers rather than payroll providers.

Action: Anerley Smith

The work to cleanse the data transferred across from Surrey CC and Capita would continue over the next six months along with continuing remedial work on backdated data following the McCloud judgement. She commented that the Impact of the latter would only impact on a small number of RBKC pension fund holders. She noted this borough was not a laggard in making these corrections. She confirmed that no RBKC pension holder would be worse off as a result of a recalculation to comply with McCloud guidance.

Anerley Smith reported she was not in a position to report on accurate Key Performance Indicators (KPIs) for this meeting because data on all the tasks had not yet been incorporated into a new management processing system. This data was expected to be ready for KPI reporting before the end of March.

Julia Stevens summarised the report. She drew attention to the rebalancing that had taken place in January 2024, following good market performance of global equities. £105 million had been redeemed which was earmarked to be invested in future direct property purchases. She noted that index linked gilts had also been rebalanced via a further acquisition. She noted section 3 in the report referred to the Freedom of Information requests received concerning investment including holdings in arms industries that had been raised at the November 2023 full Council meeting and to the brief discussion of this issue at the 24 January 2024 Investment Committee meeting.

The Chair read out an email received on 21 February from Cllr Emma Dent Coad who was unable to attend the meeting (a copy of the email was kept for the minute book). Cllr Dent Coad referred to the decision to divest from companies negatively associated with the Grenfell Tower tragedy. She asked for more clarity on the process of divestment, how long such divestment would take, and how to encourage the Board to divest from weapons producing companies which could be providing arms used in the Israeli / Gaza conflict. In pressing for such divestment, she highlighted the support for such measures reflected the views of many in the community she represented.

Phil Triggs summarised the approach to investment followed by the RBKC pension fund. He advised that the screening out of investments related to Grenfell had been managed by BlackRock which had developed a brand new index for this purpose at a reasonable fee. Screening from the four relevant Grenfell stocks had now been in place for two years. He confirmed it had taken only one month to set up and implement the Grenfell divestment process. 

He highlighted the discussion at January’s Investment Committee which demonstrated the committee had no appetite for divestment in the future of stocks linked to the arms industry. Cllr Lindsay emphasised that the Grenfell tower tragedy was an event closely related to the Council and the strength of support expressed at full Council meetings for this divestment had been apparent.

In response to questions, Phil Triggs was uncertain about how many other local authorities pension schemes had altered investment policy to remove exposure to harmful activities such as oil production, the tobacco industry or arms manufacturing. Waltham Forest Council had screened out investment in oil stocks from its portfolio, and one of the actively managed funds for Westminster CC had followed a similar approach.

The Board noted the list of companies in paragraphs 3.16 and 3.17 which had some holdings in the arms industries with which the Pension Fund held equity investments with two fund managers.  It was noted that fund managers had their own regime regarding the frequency of checks on investment compliance with United Nations Principles for Responsible Investment.

Jagdeep Birdi commented on the consciously neutral approach his schools had taken to the Gaza / Israel conflict. Ken Davison was of the firm view that the Board  ...  view the full minutes text for item 6.

Julia Stevens introduced the report. She continued to amend the risk categories in the register to make them more specific to this borough.

The Chair asked that the risk of a major market crash should be recognised on the risk register. Phil Triggs agreed that the serious consequences of such an event justified this inclusion. 

Action: Julia Stevens

In response to a query, Phil Triggs updated the Board on the consultation on pooling. Pooling was not mandatory. The government had continued to encourage the speeding up of central pooling as an efficiency measure with eight companies involved, one of which was the London CIV. The RBKC Fund had pooled no assets. The new government regulation of April 2024 would require the Fund to detail the reasons for not pooling and the Investment Strategy would be revised over the next six months in response to this requirement.

Julia Stevens updated the Board on the cashflow position.

The Board requested the figure on the internal pension website to be updated as currently the valuation sum of £800 million was incorrect.

Action: Julia Stevens / Anerley Smith

(Each written report on the Agenda detailed above:

(i)     was made available for public inspection from the date of the Agenda;

(ii)    incorporates a list of the background papers which (i) disclose any facts or matters on which that report, or any important part of it, is based; and (ii) have been relied upon to a material extent in preparing it.  (Relevant documents which contain confidential or exempt information are not listed.); and

(iii)    may, with the consent of the Chairman and subject to specified reasons, be supported at the meeting by way of oral statement or further written report in the event of special circumstances arising after the despatch of the Agenda.)

None.

Julia Stevens summarised the report.  She highlighted the acquisitions of St Pauls House in Winchester and 10 Bricket Road in St Albans. She commented on the rent arrears of circa £70,000 which stemmed from changes in payment details following new leases.

The confidential minutes of the Pension Board meeting of 31 October 2023 were agreed as an accurate record and signed by the Chair.