The Kingston upon Thames Council Pension Fund Panel addressed audit control deficiencies, including a significant red deficiency, during its meeting on Tuesday 24 June 2025.

Catherine Gray, Head of Pensions, Investments and Treasury, presented the 2023-24 Pension Fund Accounts Audit Outcomes Report, highlighting three control deficiencies: one red, one amber, and one green. The most critical, a red deficiency, involved journal entries being posted into the general ledger without clear evidence of a secondary check. This issue is being addressed with a manual process outside the system, adding an extra verification step.

Councillor Sade Hashimi inquired about the red deficiency and the rules implemented to prevent future occurrences. Gray explained that a manual process is now in place, requiring an additional box on the journal to confirm check and sign-off by a second person.

Pension Fund Investment Performance: Total Return (%) by Asset Class (Q1 2025)
Pension Fund Investment Performance: Total Return (%) by Asset Class (Q1 2025)

Other key discussions included:

  • Pension Administration Performance: Tom Taylor, Head of Pensions Administration, reported a reduction in outstanding processes and overdue cases. The aim is to eradicate the backlog by the end of July.
  • Pension Administration Projects: Updates were provided on the annual return exercise, the pensions dashboard, and the McLeod Remedy update. All end-of-year returns were received by the agreed deadline for the first time since COVID.
  • Governance and Risk: Risk 27, the administration risk regarding software, was uprated due to delays from the software provider in delivering the McLeod remedy. The Access and Fairness Consultation, addressing gender and age discrimination within the LGPS, was also discussed.
  • Investment Performance: The fund posted negative returns of -1.6% over the quarter, underperforming its benchmark. However, longer-term returns were positive, and the funding level has improved significantly.
  • London CIV Update: Catherine Gray provided a progress update on the London CIV, noting that just under 60% of the assets are in the pool.

Councillor Richard Thorpe inquired about the nine outstanding cases, to which Taylor clarified that delays were due to external factors, such as waiting for data from employers. He also mentioned quarterly employer training exercises to improve employer engagement.

Councillor Patrick Hall, Chair of Pension Fund Panel, requested a written update on the McLeod Remedy matter before the next meeting in September.