The Pension Board met on Thursday 16 July 2026 to review the performance of the pension administration service, discuss ongoing projects, and receive updates on governance, risk, and investment strategy. Key discussions included the progress of the McCloud Remedy and Access & Fairness projects, the impact of software provider delays, and the performance of the fund's investments.

Pension Administration Performance Update

Tom Taylor, Head of Pensions Administration, presented an update on the performance of the shared pensions administration service. While the total number of outstanding processes had slightly increased to 625 by the end of June 2026, largely due to the annual return exercise, the majority of cases were not overdue by more than 30 days. Crucially, all priority cases, such as deaths and retirements, were reported as not overdue. The Board noted the positive overall performance, acknowledging that targets are set by the fund itself and are often stricter than legal requirements. Discussions also touched upon the future structure of the team and resourcing requirements, particularly in light of the upcoming procurement of a new system contract.

Pension Administration Projects Update

Tom Taylor also provided an update on key administration projects. The annual return exercise was on track for completion by 31 July 2026, with all employer data received and uploaded.

Significant progress was reported on the McCloud Remedy project, with 89.17% of data loaded onto the administration system. However, it was acknowledged that the original deadline of 31 July 2026 for issuing McCloud-compliant Annual Benefit Statements (ABS) might be missed due to delays in software releases from the provider, Civica. The Board was reassured that all members would still receive an annual statement, and any potential understatements for a small number of members would be addressed.

The Access and Fairness project, aimed at addressing age and gender discrimination within the LGPS, was also progressing. All members had been notified of the scheme changes by the statutory deadline of 30 June 2026, and all members in scope had been identified. The project plan includes system implementation and testing with Civica, beneficiary tracing, and benefit calculations, with a target completion date of January 2028.

Governance and Risk Update

The Board reviewed the Fund's risk register. The primary red risk remains the administration software provider's ability to deliver compliant systems, particularly concerning the McCloud Remedy and Access & Fairness regulations. Several amber risks were discussed, including governance, where the recent local elections had led to a temporary dip in committee membership knowledge and skills, and the financial impact of retrospective legislative changes. The Board noted the change in the SCAPE discount rate, which would lead to reduced early retirement reductions, and that new factors for divorce and transfer calculations were now available. The recruitment process for a vacant employer representative and a member representative for the Board was also discussed.

Work Programme Update

The Board reviewed the proposed work programme for the upcoming year, noting that it was indicative and likely to change due to the need to update policies in line with the Fit for the Future reforms. Training requirements for committee members were highlighted as a key upcoming item.

Pension Committee Update

Katherine Gray, Head of Pensions Investments and Treasury, provided an update on the Pension Committee's activities. The fund experienced a difficult quarter ending 31 March 2026, with a negative return of -2.3%, underperforming the benchmark. However, three-year returns remained strong at 8.7%. The committee discussed actions being taken by the London CIV to address underperformance in active equity managers, including the launch of a new multi-manager equity fund. The fund's asset allocation was reviewed, with discussions on bringing certain asset classes back within strategic ranges. The Fit for the Future regulations, which came into force on 30 June 2026, were also discussed, including the upcoming appointments of a senior LGPS officer and an independent person, with tight deadlines for these appointments. The Board noted the significant changes in governance arrangements and training requirements for members.