The Pension Fund Committee of Barnet Council met on Monday 14 September 2026 to discuss the external audit and accounts for the 2025/26 financial year, receiving an update on the progress of the audit and Grant Thornton's draft audit findings report. The committee also reviewed the fund's risk register, noting the updated document and providing feedback on its format and content. Significant discussion also took place regarding the oversight and scrutiny of the London CIV, with a decision made to authorise officers to develop an appropriate governance framework for the pool's activities.

External Audit and Accounts

Hassan Shirwani presented the draft Statement of Accounts for the Barnet Pension Fund for the 2025/26 financial year, which were published on 1 July 2026. Grant Thornton commenced their audit on the same date and are expected to complete their work by mid-September, with the deadline for signing the accounts being 30 November 2026. The draft accounts indicated an increase in net assets from £1.716 billion to £1.859 billion. Contributions rose by 3.9% to £76.3 million, while benefits increased by 6.2% to £81.2 million. This greater increase in benefits compared to contributions reflects the increasing maturity of the fund, leading to a cash flow deficit on an operational basis, which is being compensated by investment income. Net return on investments increased significantly from £52.8 million to £137.8 million. A major investment change during the year involved moving £75 million from equity to government index-linked bonds as part of a de-risking strategy for the Middlesex University portion of the fund. Grant Thornton's draft audit findings report was noted as being more positive than in previous years, with expectations of an acceptable opinion rather than a disclaimer of opinion. The committee noted the draft Statement of Accounts, the progress of the audit, and Grant Thornton's draft Audit Findings Report.

Risk Management Review

The committee considered the updated Pension Fund risk register, which consolidates the previous administration and governance risk registers into a single document. This aims to provide a more streamlined and complete view of the risks facing the fund. The register details 26 strategic and operational risks, with most assessed as low to moderate after existing controls and mitigation measures are applied. The highest residual risks, which remain a key focus for officers and will be actively monitored, include: investment strategy, asset allocation and performance; cyber security breaches; strategic supplier failures; business continuity and operational resilience; employer contributions; and GDPR compliance. Mitigation activities underway include enhanced data quality monitoring, succession planning, regular review of strategic suppliers, cyber security assurance, and ongoing monitoring of investment strategy and climate-related risks. The committee noted the updated risk register and was invited to provide feedback on its format, content, and operation.

Oversight and Scrutiny of LCIV

Anisa Darr presented a report outlining the existing frameworks for overseeing and scrutinising the London CIV (LCIV), the asset pool for the Barnet Pension Fund, and considering potential supplementary governance frameworks. With LCIV now responsible for implementing the fund's investment strategy following the Fit for the Future reforms, robust oversight is crucial. Existing mechanisms include shareholder rights through LCIV General Meetings and the Shareholder Committee, direct engagement with LCIV officers and board members, and quarterly monitoring reports from Hymans Robertson. However, gaps were identified, particularly in the direct challenge of strategic advice and the assessment of value for money. The report proposed options for enhanced oversight, such as quarterly written requests from officers to LCIV on alignment with the Investment Strategy Statement (ISS) and Investment Management Agreement (IMA), annual reviews of advice quality, and annual reviews of responsible investment outcomes. The committee noted the existing oversight frameworks and options for enhancement, and authorised officers to develop an appropriate oversight governance framework for LCIV's activities.

Fit for the Future Update: Statutory Guidance

Anisa Darr provided an update on the key legislative and regulatory changes affecting the Local Government Pension Scheme (LGPS) following the Pension Schemes Act 2026 and associated regulations, which came into force on 30 June 2026. These reforms introduce enhanced governance arrangements, including statutory knowledge and understanding requirements, and a mandatory Training Strategy. The fund is on track to meet all new statutory requirements, including the pooling of assets by 30 September 2026, the appointment of an LGPS Senior Officer and Independent Person by 31 December 2026, and the publication of the first Investment Strategy Statement by 31 March 2027. The committee was asked to note and comment on the fund's current position regarding compliance with the revised LGPS regulatory framework.

Investment Strategy Statement Update

The committee was asked to approve the updated draft Investment Strategy Statement (ISS) for consultation. The ISS has been reviewed against the 2026 statutory guidance and reflects the new LGPS investment governance and asset pooling framework. There have been no material changes to the fund's investment strategy, strategic asset allocation, or high-level investment objectives since the ISS was approved in March 2026. The updated draft incorporates the final regulatory framework, governance arrangements, and pooling requirements. The committee was asked to approve the updated draft ISS for consultation and delegate authority to the Executive Director of Resources to finalise it following consultation and publish it. The committee approved the updated draft ISS for consultation and delegated authority to the Executive Director of Resources to finalise it.

Quarterly Investment Report

The committee received an update on the Pension Fund's investment performance for the quarter ended 30 June 2026. The fund's investment portfolio was valued at £1.95 billion, achieving a net return of +5.7% over the quarter, which underperformed its benchmark of 6.0%. The report detailed the strategic asset allocation and tolerance ranges, noting an overweight position in cash (10.8%) due to the termination of Insight Secured Finance funds, and an underweight position in credit. London CIV, in consultation with officers, has agreed to reinvest these proceeds into existing credit funds. The report also included market background commentary, regional and sector equity returns, and manager performance details. The committee noted the Pension Fund's investment performance and activity for the quarter.

Local Pension Board Annual Report

Paul Frost presented the Local Pension Board's Annual Report for 2025/26. The report summarised the board's work, including governance and compliance matters, training undertaken by members, and the forward work plan for 2026/27. The board had undertaken a recruitment process, resulting in new appointments and updated terms of reference. The report noted a current vacancy on the board that officers would work to fill. The committee was asked to note the report and its appendices, and to note that it would be referred to the next Full Council meeting.

Pension Fund Committee - Work Programme

The committee reviewed its work programme for the upcoming period, noting upcoming agenda items and reports.

Decisions Made:

• The committee noted the draft Statement of Accounts for 2025/26, the progress of the audit, and Grant Thornton's draft Audit Findings Report.
• The committee noted the updated Pension Fund Risk Register and was invited to provide feedback.
• The committee noted the existing oversight governance frameworks for LCIV and the options for enhanced frameworks, and authorised officers to develop an appropriate oversight governance framework for LCIV's activities.
• The committee noted the fund's current position regarding compliance with the revised LGPS regulatory framework.
• The committee approved the updated draft Investment Strategy Statement for consultation and delegated authority to the Executive Director of Resources to finalise it following consultation and publish it.
• The committee noted the Pension Fund's investment performance and activity for the quarter ending 30 June 2026.
• The committee noted the Local Pension Board's Annual Report and its appendices, and noted that the report would be referred to the next Full Council meeting.
• The committee reviewed its work programme.