The Pension Fund Committee of Westminster Council met on Thursday 05 March 2026 to discuss the administration and performance of the council's pension fund. Key topics included updates on pension administration, financial management, investment performance, and the implications of the Pensions Schemes Bill.

Pension Administration Update

The committee was scheduled to receive an update on pension administration services, including performance against Key Performance Indicators (KPIs) for Hampshire Pension Services (HPS) from November 2025 to January 2026. It was noted that the cyber security incident at Westminster City Council had not impacted pension administration services provided by HPS, although internal teams had been focused on payroll recovery. The report indicated that HPS maintained 100% compliance with agreed KPIs. The committee was also to consider proposed revisions to the Pension Administration Strategy penalty charge for employers with poor data quality, with a recommendation to increase the charge from £100 to £150 per member. Member portal access had increased to 55.07% by the end of January 2026. The report also detailed compliments and complaints received, including one case escalated to the Fraud Team and another concerning a reduction in a pensioner's net pension following a tax code change. The upcoming Pensions AGM on 30 March 2026 was also mentioned.

Pension Projects and Governance Update

An update was scheduled on various projects and governance activities undertaken by the Pensions and Payroll Team to improve the administration of the City of Westminster Pension Fund (COWPF) Local Government Pension Scheme (LGPS). Statutory projects included the McCloud project, focusing on reconciling pensioner records and applying underpins, and the Pensions Dashboard Programme, with Civica onboarding complete and connection expected shortly. The committee was to consider a contribution of up to £10,000 towards the Local Government Association's (LGA) research into the gender pension gap within the LGPS, which currently stands at 49.4%. A draft Fund Cybersecurity Policy was in development, and the annual business continuity exercise with HPS was due to resume.

Final Triennial Actuarial Valuation 2025

The committee was to review the final results of the 2025 triennial actuarial valuation for the Westminster City Council Pension Fund. The report indicated that the Fund's overall funding level had risen to 140% from 128% in 2025, largely due to strong investment returns. Major changes to the 2025 actuarial financial assumptions included an increased discount rate and slightly lower CPI inflation and salary increase rates. The report also presented a draft Funding Strategy Statement for approval.

Fund Financial Management

This report was scheduled to summarise the top risks in the Fund's risk register, which were identified as the LGPS pooling reforms timetable, global market volatility, resourcing at the London CIV, failure to achieve investment benchmarks, and inflation exceeding actuarial assumptions. An update on cash flow and liquidity was also to be provided, noting that the Fund's bank balance stood at £2.3 million as at 30 September 2025, with £70.2 million held in custody. The committee was to note the cashflow position and forecasts.

Quarterly Performance Report

The committee was scheduled to receive an overview of the Fund's investment performance to 30 September 2025. The Fund had delivered an absolute return of 4.2% over the quarter, underperforming its benchmark by 1.4%. Over the one-year period, the Fund achieved a return of 9.4%, 2.5% below benchmark, and over three years returned 11.1% per annum, 1.7% below benchmark. The total asset value of the Fund was approximately £2.26 billion. The report was to discuss the reasons for underperformance, primarily attributed to the LCIV Global Equity Quality mandates managed by Baillie Gifford and Morgan Stanley, and note the progression of actions to transition equity exposure to BlackRock's ESG tilted passive fund and disinvest from the underperforming LCIV Global Equity Quality mandate.

Responsible Investment Policy – Conflict Zones Discussion

This item was scheduled to discuss a draft addendum to the Pension Fund's Responsible Investment Statement. The purpose was to outline the Fund's approach to conflict-linked investments, clarify expectations for the London CIV and investment managers, and establish a transparent framework for decision-making, particularly in light of recent geopolitical conflicts. The report noted that the Pension Fund's Responsible Investment Policy is founded on ESG integration, stewardship, and alignment with long-term beneficiary interests.

Investment Strategy Review

This report was intended to provide a high-level briefing to the Pension Fund Committee ahead of a full Investment Strategy Review. It was scheduled to consider key strategic themes, including the appropriate long-term risk vs return profile, prominent strategy themes to target, and other views on asset classes or implementation. The report highlighted that the Fund's funding level had increased materially since the last actuarial valuation, and that employer contributions were expected to reduce significantly, increasing the reliance on the investment portfolio for cashflow requirements. The report also touched upon the implications of the Fit for the Future legislation and the role of the London CIV in implementing the investment strategy.

London Collective Investment Vehicle Investment Manager Agreement (LCIV IMA)

The committee was scheduled to review the final legal agreement between the WCC Pension Fund and the London CIV (LCIV) for the pooled management of the Fund's assets, effective from 1 April 2026. This Investment Management Agreement (IMA) outlines the terms and conditions for asset management, responsibilities, fees, and the delegated function of buy/sell/hold decisions to the LCIV. The report noted that the IMA had been reviewed by legal firm Brabners, acting in the interests of London Borough pension funds.

Pensions Schemes Bill Update

This report was to outline changes to the Local Government Pension Scheme (LGPS) pooling arrangements and governance arising from the Pensions Schemes Bill, draft LGPS regulations, and accompanying statutory guidance. It was to detail the progress made towards regulation compliance and consider the next steps required for the Pension Fund to comply. The report highlighted that the Pensions Schemes Bill introduces enabling powers for mandatory asset pooling, with 100% of assets required to be pooled by 31 March 2026. The draft LGPS regulations build on these powers, strengthening the governance framework and placing asset pooling on a statutory footing. The report also detailed the roles of Administering Authorities and LGPS Pools, and identified key issues and risks associated with these reforms, such as alignment risk, accountability, transition risk, and local democratic input.