The Pension Board of Harrow Council met on Thursday 30 July 2026 to discuss the administration of the Local Government Pension Scheme (LGPS) and the fund's performance. Key decisions included the appointment of Gerald Balabanoff as Vice-Chair for the 2026-27 municipal year and the noting of the Pension Board's Annual Report for 2025-26. The board also reviewed updates on pension administration, the Pension Fund Committee's items, and the fund's actuarial funding position.

Pensions Administration Update

Yvette Salthouse, Head of Payroll and Pensions, presented an update on the administration performance of the fund for the quarter ending 31 March 2026. The team completed 2,492 tasks during this period, with an average of 72.95% completed within the target time, an improvement of 7% from the previous quarter. There was one complaint received regarding a historic ill-health retirement, which has since been addressed. No ombudsman appeals were lodged during this period. The Pensions Administration Team is undergoing a reorganisation to ensure it is fit for purpose and appropriately resourced. Legislation changes, including those related to Access and Fairness, are being implemented, affecting survivor pensions and death grants. The LGPS is now also open to councillors.

Pension Board Annual Report

Patrick Kilgallen presented the draft Pension Board Annual Report for 2025-26. The report detailed the board's activities, noting that only two meetings were held during the year, which was considered disappointing. A vacancy for an employer representative for admitted and scheduled bodies has now been filled. A key achievement highlighted was the Pension Board gaining access to confidential reports from the Pension Fund Committee, following a long campaign. The report also outlined the training provided to board members, including sessions before Pension Fund Committee meetings. The board agreed to add a sentence to the report clarifying that two meetings were unable to proceed due to a lack of quorum. The board recommended the annual report to the council for endorsement with this amendment.

Review of Pension Fund Committee Items

The board reviewed several reports considered by the Pension Fund Committee on 22 June 2026.

Pension Fund Work Plan 2026-27

The board noted the work plan for the upcoming year, which includes regular reporting on funding position, administration performance, LGPS updates, and the risk register. Key governance items include the approval of a conflict of interest policy in September, an investment strategy statement and administration policy in November, and the Harrow Pension Fund governance and training strategies as part of the Fit for the Future reforms. Councillor Amir Moshenson, a councillor for Cairns Ward, raised concerns about the training of new Pension Fund Committee members, particularly given the significant changes in membership following local elections. Patrick Kilgallen explained that a self-assessment of prior knowledge and a targeted training plan would be developed. The discussion also touched upon the shift in responsibilities to the London Collective Investment Vehicle (LCIV)^[1] for fund implementation, while strategic asset allocation remains with the committee. The board noted that the LCIV would be attending a future meeting to discuss underperformance issues.

Quarterly Actuarial Funding Position Update

The board reviewed the estimated funding position of the Harrow Pension Fund as of 31 March 2026, which stood at 100%. This represents a decrease from the 108% funding level at the triennial valuation on 31 March 2025. The decline is attributed to a decrease in the discount rate, which has increased the fund's liabilities. While this fluctuation is considered normal due to market conditions, it underscores the importance of monitoring the fund's financial health. Binitta Shah, Employer Representative for Scheduled and Admitted Bodies, inquired about engagement with employers regarding potential contribution rate changes, and it was noted that it was too early for such discussions.

LCIV and LGPS Update

This update covered the Fit for the Future reforms, which require Harrow to appoint an Independent Person and an LGPS senior officer by 31 December 2026, and to produce an investment strategy including local investment preferences by 31 March 2027. The report also highlighted that the LGPS valuation in England and Wales showed strengthened funding levels and a decrease in average employer contribution rates. Harrow's own figures were in line with these trends. The board discussed the definition of local in investment preferences and the steps Harrow is taking to comply with the new appointments, including involving the 151 officer, monitoring officer, and head of HR. The potential for increased costs associated with these new roles was acknowledged.

Pension Fund Risk Register

The board reviewed the updated risk register. Two new risks were identified: risk number 13, concerning the long-term investment strategy not being a good fit for the fund's liabilities, and risk number 5, regarding the pooling of assets leading to adverse financial consequences. The latter risk has been updated due to the LCIV taking over implementation responsibilities. The board expressed concerns about the assurance of the London CIV's ability to manage its expanded responsibilities and the continued red rating for investment risks, acknowledging that diversification is the primary mitigation strategy.

TPR Code of Practice Compliance Update

The board received an update on the fund's compliance with the Pensions Regulator's (TPR) new General Code of Practice (GCOP). While the fund is fully compliant in some areas, there are significant actions required to achieve full compliance, particularly in updating strategies and policies, and improving documentation of training for the committee and board. Actions are planned for 2026-27, with a target of full compliance by the end of the year. The board noted the importance of maintaining a training log for members.

Fund Valuation and Performance Monitoring Report

This report detailed the fund's investment performance for the quarter ending 31 March 2026. The fund returned -3.0% net of fees, underperforming its benchmark by 2.9%. Over a 12-month period, the fund underperformed its benchmark by 5.1%, returning 8.7%. Longer-term performance was also noted as disappointing, with underperformance over three years. The market value of investments decreased by £36.4m to £1.15bn. The report also covered the wind-up of the LaSalle Property Fund of Funds and provided an update on the independent advisor's report and climate transition analysis. The board noted that a rebalancing decision might be undertaken in the next quarter due to significant market movements since 31 March.