The Committee approved the recommendation 10.1 to review the proposed contribution policy.

Phil Triggs confirmed the recommendations in section 10 of the report and for recommendation 10.2, the process had been followed with feedback from the employer consultation reflected in the committee papers.

The Committee noted the need to correct a typing error in the bold font in paragraph 2.5 of Appendix 1. The Committee expressed no other concerns arising from the papers.

Exclusion of the Press and Public

The Chairman indicated that he was minded to resolve to move into exempt (Part B) session at this stage to consider the exempt item of Appendix 6.

The Chairman moved, and Cllr. Husband seconded, this proposal. The Committee concurred and duly:

RESOLVED - that the press and public be excluded as the reports and appendices in this part of the meeting contain information in respect of which a claim for legal professional privilege can be maintained in legal proceedings, and in all the circumstances of each case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

[Notes: Following conclusion of the Part B discussions, the Committee returned to Part A (public) session to take decisions on the Part A agenda items, as recorded below.]

The Chairman emphasised that the Committee would never contemplate a decision that would jeopardise payment of pensions. He reminded the Committee of the Fund’s unusual position compared to other LGPS funds with its significant level of surplus with funding levels of 207% in June 2024 which was likely to have increased. A one-off zero-contribution rate would result in a £9 million reduction in contribution income compared to if the rate was set at 7.5%. Members discussed this change in the cash flow and agreed it would not impair the Pension Fund’s ability to pay pensions and liabilities. The Chairman stated that the funding level from the latest triennial assessment was a conservative estimate. James Brundrett agreed with these comments. All the Members present concurred in the view that a zero rate of contribution would not impair the ability of the Fund to meet its future pensions liabilities.

While the Committee recognised that a zero rate of contribution would have no effect on the ability to pay pensions, the amount saved would be beneficial to the Council’s General Fund and Housing Revenue account and would be used to support local services. It would have a clear, beneficial impact for local residents. Members also noted the intended use of the General fund element of this to support the Grenfell Reserve.

The Chairman emphasised the nil rate contribution was for one year only and therefore would not set a precedent.

[Cllr Elnaghi arrived at 6.18pm.]

James Brundrett advised that the reduction of £9 million from a zero rate to the Fund for one year would not make a material difference to the payment of pensions.

Phil Triggs advised that after one-year 2025/26, the contribution rate would be subject to the results of the 2025 triennial valuation with contributions rates assessed from refreshed data and up-to-date actuarial assumptions.

The Chairman highlighted the importance that the Committee and the Council understand that the nil rate was a one-year exception, and the rate would increase in April 2026, following the 2025 triennial valuation.

Phil Triggs advised that, given the reputational risks of not following the advice of the actuary and the possibility of direct action from MHCLG and the pensions regulator, members should approve the 7.5% rate for 2025/26, with Tri-Borough officers advising strongly against the selection of the zero rate.

The Committee having careful regard to the advice from the actuary, counsel, officers and financial adviser were asked to consider recommendation 10.2 of the report.

RESOLVED by a majority (with Cllr Elnaghi dissenting) not to approve the recommended total rate of 7.5% for 2025/26 for the Council employer body.

The Chairman proposed and Cllr Hudd seconded, and the Committee RESOLVED unanimously that a zero-percentage rate for the employer’s contribution be set for one-year 2025/26.