The Pension Board of Kensington and Chelsea Council met on Monday 13 July 2026 to discuss updates on pension administration, quarterly performance reviews, and the implications of the Pensions Schemes Act 2026. The meeting also included a review of the Conflict of Interest Policy and a direct property update.

Pension Administration Update

The Pension Board was scheduled to receive an update on the current state of pension administration within the Royal Borough of Kensington and Chelsea (RBKC). This included information on the Altair licence, the application of the 3.8% pension increase in line with CPI, and the finalisation of employer contribution rates for 2026/27 to 2028/29 following the 2025 valuation. The report was also set to address a late payment of April 2026 pension contributions, detailing the investigation into the finance approval process and measures to prevent recurrence. Updates on ongoing projects were also anticipated, including the 2025/26 year-end processes, work on the McCloud Judgement, the implementation of i-Connect, and reforms related to 'Access & Fairness' and 'Fit for the Future'. Performance indicators for the RBKC Pension Team were to be presented in Appendix 1.

Quarterly Performance Review

A review of the Fund's investment performance for the quarter ending 31 March 2026 was scheduled. This report, prepared by Northern Trust, was to provide a breakdown of investment assets as at that date. Key highlights were expected to include the Fund's overall value decrease of 1.63% to £2,024 million for the quarter, and the completion of the transition from active to passive equity funds as decided by the Investment Committee. Performance details for BlackRock (Passive Global Equities) and Adams Street (Private Equity) were to be presented, alongside information on the winding down of CBRE Global Investors' pooled property fund. The report was also to detail the annual valuation of directly held properties and the performance of commercial properties purchased during the year. Updates on the funding position, showing a drop to 164%, and the impact of a reduced funding discount rate were also on the agenda.

Pensions Bill Update

The Board was set to receive an update on changes to Local Government Pension Scheme (LGPS) pooling arrangements and governance arising from the Pensions Schemes Act 2026. This legislation, which received Royal Assent on 29 April 2026, underpins a strengthened LGPS pooling and governance framework. The report was to outline how the Pension Fund's role would focus on strategic asset allocation, monitoring investment performance and costs, and oversight of London CIV, as investment implementation responsibilities become more concentrated within the pool. The need to establish new governance documents, including a Governance Strategy, Training Strategy, and Conflicts of Interest Policy, was to be discussed. The report was also to highlight key risks associated with these reforms, such as strategic alignment, governance and accountability, transition and implementation, regulatory compliance, skills and knowledge gaps, and the relationship with London CIV.

Conflict of Interest Policy

This report was to provide an update on the Conflicts of Interest Policy for the Royal Borough of Kensington and Chelsea Pension Fund, designed to meet new statutory requirements under the Fit for the Future reforms and the Local Government Pension Scheme (Amendment) Regulations 2026. The policy applies to all individuals involved in the governance, management, and operation of the Fund, including Investment Committee members, Pension Board members, officers, advisers, and contractors. It defines actual, potential, and perceived conflicts with LGPS-specific examples such as employer contribution setting, pooling arrangements, local investment decisions, and procurement. Key elements of the policy include strengthened arrangements for declaration and registration of interests, proportionate mitigation measures, and clear responsibilities for the Tri-Borough Director.

Direct Property Update

A report was scheduled to provide an update on the direct property portfolio, which accounted for 15% of the Fund against a 20% target allocation. The update was to be provided against the backdrop of the pooling deadline, with the team working closely with London CIV to reach the target allocation. A more detailed summary of the discussion on this item was to be kept for Part B of the minutes, which would exclude the press and public.

Judicial Review

The agenda indicated that a discussion on Judicial Review was scheduled. This item was to be held in private, with the press and public excluded, as the relevant reports and appendices were understood to contain information relating to the financial or business affairs of specific individuals or entities, and information subject to legal professional privilege. The public interest in maintaining the exemption was considered to outweigh the public interest in disclosure.

Pension Bill Update

Further to the Pensions Schemes Act 2026, the Board was to receive an update on the Fit for the Future reforms. This included information on the Bill's passage through Parliament, amendments related to LGPS valuations and investment regulation, and the expected follow-up LGPS Investment Regulations and guidance. The report was to outline the latest expected deadlines for fund asset pooling, Investment Strategy Statement publication, and the appointment of an LGPS Senior Officer and Independent Person. It was also to detail the timeline of events related to geopolitical events impacting markets and the market reaction to these events. Actions for investors, including engaging with their Pool, understanding risks through scenario analysis, and considering genuine diversification, were to be discussed. The report also included an overview of LGPS current topics, such as the Fit for the Future update, market background, investment beliefs surveys, covenant assessment and monitoring, UK productive finance, and nature analysis.

Draft Pension Fund Financial Statements 2025/26

The Board was presented with the draft Pension Fund Financial Statements for the year ending 31 March 2026. These statements were prepared in accordance with the Code of Practice on Local Authority Accounting in the UK and were ready for submission to the external auditor. The report included details on contributions receivable, benefits payable, management expenses, investment income, and movements in investments. It also provided a breakdown of financial instruments by valuation hierarchy and outlined the nature of risks arising from financial instruments, including market risk, interest rate risk, currency risk, credit risk, and liquidity risk. Contractual commitments, funding arrangements, and the actuarial present value of promised retirement benefits were also detailed. Key management personnel remuneration and agency services were also disclosed.

Review of Investment Objectives

This report was intended to support the Investment Committee in establishing its investment beliefs and objectives, to be shared with London CIV ahead of the pooling deadline. It highlighted the need to update the Investment Strategy Statement (ISS) to reflect changes such as the termination of the Baillie Gifford Global Alpha Fund and the transition to BlackRock passive global equities, as well as a potential 5% target allocation to Temporary Accommodation. The report was to outline the requirements from draft ISS guidance regarding local investment, including setting a target allocation, specifying preferences for returns, risk, impact, asset classes, and investment sectors, and taking into account local priorities. Proposed investment beliefs and objectives were to be discussed, including the target investment return, probability of achieving full funding, downside risk, employer contributions, and net zero targets.

Draft Conflict of Interest Policy

This report provided an update on the draft Conflicts of Interest Policy for the Royal Borough of Kensington and Chelsea Pension Fund. The policy was developed to meet new statutory expectations under the Fit for the Future reforms and the Local Government Pension Scheme (Amendment) Regulations 2026. It applies to all individuals involved in the governance, management, and operation of the Fund and defines actual, potential, and perceived conflicts with LGPS-specific examples. Key elements include strengthened arrangements for declaration and registration of interests, proportionate mitigation measures, and clear responsibilities for the Tri-Borough Director. The policy was to be reviewed at least every three years and would be published on the Fund's website.

Direct Property Update

A report was scheduled to provide an update on the direct property portfolio, which accounted for 15% of the Fund against a 20% target allocation. The update was to be provided against the backdrop of the pooling deadline, with the team working closely with London CIV to reach the target allocation. A more detailed summary of the discussion on this item was to be kept for Part B of the minutes, which would exclude the press and public.

Judicial Review

The agenda indicated that a discussion on Judicial Review was scheduled. This item was to be held in private, with the press and public excluded, as the relevant reports and appendices were understood to contain information relating to the financial or business affairs of specific individuals or entities, and information subject to legal professional privilege. The public interest in maintaining the exemption was considered to outweigh the public interest in disclosure.