Newham Council's pension fund is preparing to comply with significant new legislation following a meeting of its Pensions Committee. The committee received comprehensive updates on adapting to new pension regulations, with a particular focus on the mandates introduced by the Pension Schemes Act 2026.
Representatives from the London CIV (London Collective Investment Vehicle) briefed the committee on these changes. They explained that while the London CIV will manage day-to-day investment activities, Newham Council, as the partner fund, retains responsibility for strategic decisions, including setting objectives, asset allocation, and responsible investment policies. The new legislation mandates the appointment of a dedicated senior LGPS officer and an independent person by the end of the calendar year to enhance oversight. Furthermore, funds will be required to undergo triennial governance reviews, with the first due by March 2028. An interim audit will likely be conducted to assess compliance and establish a plan.
A dedicated Training Strategy will be developed to ensure Elected Members, Board members, and Officers possess the necessary knowledge and skills, with ongoing training and demonstrable competence in areas such as pensions law, governance, funding, investment, and risk management.
All assets must be moved under the management of the pool (London CIV), a requirement Newham has already met through its investment management agreement. The London CIV will also become the principal source of investment advice, with external advice being used only in limited circumstances.
The London CIV's vision for local investment includes delivering financial returns, supporting strategic initiatives in the wider London region, attracting third-party investment, and leaving a positive legacy through disciplined investments. These strategic initiatives align with the London Strategic Growth Plan and encompass areas such as housing, energy transition, jobs, technology, and innovation. The CIV aims to launch an investable product in early 2027, which is expected to include private market investments like property and infrastructure.
Councillor John Gray, Vice Chair of the committee, sought clarification on the attendance of London CIV representatives at future meetings, receiving an affirmative response. He also enquired about opportunities for broader councillor engagement with the London CIV, with the annual conference being highlighted.
Councillor Joe Hudson-Small raised concerns about potential gaps between the London CIV's offerings and Newham's strategic objectives, particularly regarding climate and ethical investment. Jenny Buck acknowledged that while the London CIV aims to meet partner fund requirements, the pooling nature might limit some bespoke past arrangements. However, she highlighted existing reports on stewardship, TCFD, and nature and biodiversity.
Councillor Heather Lafferty questioned the threshold for creating bespoke investment packages, particularly in light of council motions related to the BDS movement. Jenny Buck explained the development of a Responsible Investment (RI) matrix with three exclusion policy options. These options were developed by listening to our partner funds and what they are wanting to achieve
and have been a co-created component.
While the specific details of these three options were not provided, the aim is to go some way towards meeting people's expectations
while working within the law
and ensuring that exclusions do not cause significant financial harm.
This approach requires balancing partner fund expectations with legal frameworks, which imply adherence to pension fund legislation and fiduciary responsibilities.
Councillor Grace inquired about the timeline for local investment strategies, which was clarified as March 2027, with initial details to be presented by December.
Legislative updates also included the LGPS (Miscellaneous Amendments) (Member Benefits) Regulations 2026. These regulations introduce changes related to Access and Fairness,
including the equalisation of survivor benefits and the removal of the age 75 cap for death grants. The equalisation of survivor benefits aims to remove inconsistencies in how pension is calculated for a survivor pension depending on the grounds of sex or sexual orientation, increasing survivor pensions where such unfair treatment occurred.
The removal of the age 75 cap for death grants means that death grants will no longer have this age restriction. While the specific impact on overall pension fund liabilities and payouts for Newham Council's scheme members is not quantified, it is noted that LPPA are aware of cases that need to be reviewed and a plan is needed for communication due to the sensitive nature.
