Newham Council has notified the Pensions Regulator of a breach concerning the Newham Pension Fund, following delays in admitting employers to the scheme. These delays stem from employers struggling to provide bonds or guarantors, as required by the current admission policy, with 26 outstanding admissions into the fund. The updated policy aims to mitigate the risk that employers struggle to provide bonds or guarantors, which delays the admission process and can lead to cash flow risks for the fund and potential issues for members.
The Newham Pensions Board discussed the matter at a meeting on Tuesday 24 June 2025, where they reviewed proposed changes to the London Borough of Newham Pension Fund Admission Policy and the latest updates on employer admissions. The board has submitted a formal report to the Pensions Regulator and are awaiting a response. The Pensions Regulator (TPR) can issue fines where it finds there is a material breach, and there is not sufficient action to address.
James Cocks, Assistant Director of Transactional People Services, explained that the updated admission policy would favour a deferred pass-through arrangement, particularly for academies, to streamline the process and reduce risks.
a pass through is essentially the letting authority, which would be say a school, uh, sharing the risk with an employer.
Under this arrangement, the letting authority (e.g., a school) shares the risk with the employer (e.g., a cleaning company). The asset risk remains with the letting authority, while the employer is responsible for monthly contributions. This aims to simplify the process for academies tendering for contracts, as their employer rate would be set at their contribution rate without waiting for an actuarial assessment. The traditional route requires employers to obtain bonds or guarantors.
The updated admission policy will be out for consultation to employers for one month, academies and schools of the fund, any material changes will be reported back to board and committee for final approval. The updated admission policy would still allow the fund to select traditional routes with section 151 approval. The plan is to implement the new admission policy from September, with provisional approval expected at the next committee meeting.
Mr. Cocks also updated the board on the current position regarding admissions into the fund. Progress has been slow, with only one admission cleared since the last board paper. However, strongly worded letters have been sent to encourage completion, and alternative admission routes are being considered.
The next meeting is to be confirmed.