The Pension Fund Committee of Harrow Council met on Monday 16 June 2025 to review the fund's work plan, actuarial funding position, and investment pooling arrangements. Key decisions included the approval of the 2025-26 work plan and noting the improved funding position of the pension fund.

Harrow Pension Fund Committee Work Plan 25-26

The committee reviewed and approved the Harrow Pension Fund Committee Work Plan for 2025-26. A significant focus of this plan will be the actuarial valuation of the fund as at 31 March 2025. This triennial revaluation will necessitate the approval of a new funding strategy and a review of the investment strategy, which are expected to dominate the committee's work over the coming year.

Quarterly Actuarial Funding Position Update

The committee received an update on the pension fund's actuarial funding position as at 31 March 2025. The report indicated a significant improvement since the last triennial valuation on 31 March 2022, with the funding level rising from 96% to an estimated 133%. This improvement is attributed primarily to a reduction in liabilities, alongside asset growth. The fund has moved from a deficit to a surplus. The required rate of return to maintain 100% funding was noted as 5.0%, with an 88% likelihood of achieving this.

LCIV Engagement and Accountability

The committee noted the report on the London Collective Investment Vehicle (LCIV) Engagement and Accountability. This report provided information on the LCIV's governance structure and outlined how clients and shareholders can engage with its management and hold it accountable. The report was prepared following a committee request to explore how the Pension Fund could achieve this.

Update on London CIV and Investment Pooling Arrangements

An update was provided on the London Collective Investment Vehicle (LCIV) and investment pooling arrangements. The report detailed the government's response to the LGPS – Fit for the Future consultation, which will significantly alter how investment strategies are implemented. Under the new arrangements, the LCIV will have greater control over investment strategy implementation, including decisions on active versus passive management and manager selection. The committee's role in investment strategy will be focused on very high-level objectives, such as funding, return, and risk objectives, as well as ESG and local investment targets. Strategic asset allocation will require principal advice from the LCIV, and the committee's input will be limited to nine broad asset classes. The LCIV will also be responsible for due diligence on local investments. These changes are expected to be in place by March 2026, pending parliamentary approval.

Review of Pension Fund Risk Register

The committee reviewed the Pension Fund Risk Register as at 16 June 2025. Risks were categorised by workstreams: investment, funding, and administration and accounting. The register also highlighted risks with a high inherent impact across multiple workstreams, including cyber security, conflicts of interest, major emergencies, and governance. An Independent Adviser questioned whether Risk 12, relating to the long-term investment strategy being inappropriate for the fund's liabilities, should be downgraded given the LCIV's experience and the changes in the Local Government Pension Scheme (LGPS). An officer clarified that this would be addressed in a separate LCIV-specific risk. The committee noted the report.

Pension Board Minutes - 20 March 2025

The committee received and noted the minutes of the Pension Board meeting held on 20 March 2025. These minutes detailed discussions on pensions administration, the review of Pension Fund Committee items, the audited annual report and accounts, the actuarial funding position, and the Pension Fund Risk Register.

Investment Manager Performance March 2025

The committee received the Investments and Manager's Performance Review Report as at March 2025, which included confidential appendices. The report and appendices were noted.