The Westminster Council Pension Board convened to discuss the performance of the council's pension fund, updates from the London CIV (LCIV), and various Local Government Pension Scheme (LGPS) projects. The board noted the fund's performance, risks, and the updated funding level as of March 31, 2025, and also approved the delay of remediable service information delivery related to the McCloud judgement¹ for certain members.

London CIV Update and Fund Performance

The board received an update on the performance of the council's pension fund, noting that it returned -1.5% net of fees for the quarter ending March 31, 2025, underperforming the benchmark by 0.2%. This underperformance was primarily attributed to the LCIV Global Alpha Growth Fund – Paris Aligned portfolio. However, this was partially offset by the LCIV Global Equity Quality fund and Quinbrook investments.

Councillor Tim Mitchell, Member of the Pension Fund Committee, attended the meeting online.

The report highlighted that over the one-year and three-year periods to the same date, the fund delivered positive absolute returns, but still underperformed the fixed weight benchmark. The estimated funding level for the Westminster Pension Fund was reported as 181% at March 31, 2025.

The board also reviewed the top five risks to the pension fund, which included:

1. Regulatory and compliance risks related to the government's proposed reforms to the LGPS, including the consolidation of assets into larger pools.
2. Asset and investment risks stemming from volatility and negative sentiment in global investment markets due to geopolitical and economic uncertainty.
3. Concerns that the London CIV has inadequate resources to monitor the implementation of investment strategy and consequently are unable to address underachieving fund managers.
4. Liability risks associated with higher-than-anticipated price inflation.
5. Asset and investment risks related to investment managers failing to achieve benchmark or outperform targets over the longer term.

The report also provided an update on the LCIV, noting that the value of Westminster Pension Fund investments directly managed by the LCIV was £947 million as of March 31, 2025, representing 45% of Westminster's investment assets.

McCloud Remedy and Discretion

The board approved the delay of the McCloud underpin calculation for certain categories of members, as allowed by the Pensions Regulator (TPR). Diana McDonnell-Pascoe, Pension Project and Governance Lead, People Services, informed the board that a discretion was required for the delay of calculation for the McCloud underpin for certain categories of members as per the statement from The Pension Regulator (TPR) before 31 August 2025.

The delay is due to various reasons, including regulations not being in place for correct calculation of the underpin for one group, as well as a lack of information being provided by other schemes for another group. The board was assured that Hampshire Pension Services (HPS) is continuing to calculate the underpin where possible.

Pension Administration Update

The board received a pension administration update, which included key performance indicators (KPIs) from Hampshire Pension Services (HPS). Sarah Hay, Pensions Officer People Services, reported that HPS achieved 100% compliance within the agreed KPIs for the period of March to July 2025.

The report noted that 53.07% of fund members had signed up to the member portal as of the end of July 2025, exceeding the initial target of 50%. The new target is to increase active membership access to 70%.

HPS received eight compliments and one complaint during the reporting period. The complaint concerned a member who had left employment in 2020 and had a frozen refund held in the fund. The member was unhappy that she was not entitled to a refund of the employer contribution.

The board also discussed the end-of-year returns and employer benchmarking. The report highlighted mixed results in employer performance, particularly in data quality. Seven fund employers have now had three years' worth of failing data quality, and the board will consider applying fines under the Pension Administration Strategy (PAS).

LGPS Projects and Governance Update

Diana McDonnell-Pascoe, Pension Project and Governance Lead, People Services, provided an update on LGPS projects and governance. The McCloud project is back on track after a software update, but the publication of the underpin for certain members will be delayed until the next annual benefit statement in August 2026.

Civica, the council's integrated service provider (ISP), is expected to connect to the Pension Dashboard Programme (PDP) by the end of September 2025. The board is continuing to monitor the situation, as the connection date was originally scheduled for October 2024.

The report also highlighted improvements in communications and engagement, including the use of Eventbrite for managing events and the creation of a specific logo for the Pension Fund.