Here is a summary of the Pension Committee meeting held by Croydon Council on 16 September 2025:

The committee reviewed the initial results of the 2025 valuation, including an improved funding level, and approved a draft Funding Strategy Statement for consultation. Members also discussed updates to the Pension Fund's annual report and financial statements, an indicative external audit plan, key performance indicators for the pension administration team, breaches of the law, and reports from the Local Government Pension Scheme Advisory Board and The Pensions Regulator.

2025 Valuation and Funding Strategy Statement

The Pension Committee reviewed the initial results of the 2025 valuation of the Croydon Pension Fund and approved the draft Funding Strategy Statement (FSS) for consultation with participating employers. The triennial valuation is a regulatory requirement that determines employer contribution rates, and the FSS outlines how the fund manages funding risks and aligns with the investment strategy.

The initial valuation results showed an improved funding position, with the fund at a 132% funding level as of 31 March 2025, compared to 97% at the last valuation. This improvement was attributed to changes in the economic environment, including increased interest rates and higher-than-expected inflation since the 2022 valuation.

The committee discussed the funding assumptions used in the valuation, including future investment return, benefit increases, and life expectancy. They noted that the actuary had increased the prudence level from 75% to 80% to reflect the change in economic environment.

The committee also considered contribution rates for Croydon Council, with the fund actuary recommending an immediate 3% reduction from 23.2% of pay to 20.2% of pay.

The draft Funding Strategy Statement was updated to comply with updated guidance from the Ministry of Housing, Communities and Local Government, the Scheme Advisory Board, and the Chartered Institute of Public Finance and Accountancy. The updated guidance aims to improve the coverage of topics such as roles and responsibilities, engagement with stakeholders, funding deficits and surpluses, risk management, and links with other fund policies.

Pension Fund Annual Report and Financial Statements

The committee received an update on the Fund's audited accounts for the years 2019/20 to 2023/24 and considered the draft London Borough of Croydon Pension Fund Annual Report 2024/25 and Statement of Accounts 2024/25. They agreed to their publication, subject to completion of the audit.

Due to national and local reasons, there have been failures to meet statutory deadlines in the preparation and publishing of Croydon Council's accounts, including those of the Pension Fund, since 2018/19.

The committee noted the following status of the Fund's accounts for each of the years 2019/20 to 2024/25:

• 2019/20: The Local Auditor issued an unqualified opinion of the Fund's accounts on 13 December 2024.
• 2020/21: The Local Auditor issued a disclaimer of opinion on the financial statements on 7 August 2025.
• 2021/22: The Local Auditor issued a disclaimer of opinion on the financial statements on 14 August 2025.
• 2022/23: The Local Auditor issued a disclaimer of opinion on the financial statements on 15 August 2025.
• 2023/24: The Local Auditor issued a disclaimer of opinion on the financial statements on 18 August 2025.
• 2024/25: The Council's draft accounts including the pension fund financial statements and Public Inspection Notice were published on the Council's website on 31 July 2025.

Indicative External Audit Plan

The committee reviewed the Indicative External Audit Plan for the London Borough of Croydon Pension Fund 2024/25, presented by Grant Thornton, the external auditor. The plan provides an overview of the planned scope and timing of the statutory audit of the Fund.

The audit plan identified the following significant risks:

• Management override of controls
• Valuation of Level 3 investments¹
• Actuarial Valuation of the net defined benefit pension liability

Key Performance Indicators

The committee reviewed the Croydon Pensions Administration Team Key Performance Indicators for the period May 2025 to July 2025. The report set out the key performance indicators, measured against the legal requirements for the administration of the Local Government Pension Scheme.

The committee noted that the team had generally met targets for most indicators during the period, with the exception of deferred benefit calculations, which continued to fall below expected levels. The team continued with 'blitz days' to target cases in preparation for the Triennial Valuation, to decrease the number of outstanding leavers, and to prepare records for the McCloud remedy².

The committee also noted a progress report on the implementation of the McCloud remedy, which was presented to the Pension Board in July 2025.

Review of Breaches of the Law

The committee reviewed and noted the contents of the Pension Fund Breaches of the Law Log Extract. The log included 16 items, with one new entry added regarding the August 2025 Annual Benefit Statements, one entry updated to reflect audit opinions issued, and one entry removed as it was over three years old.

Local Government Pension Scheme Advisory Board and The Pensions Regulator Update

The committee received a report advising them of matters being considered by the Local Government Pension Scheme Advisory Board (SAB) and The Pensions Regulator (TPR).

The SAB was seeking information from LGPS administering authorities on the diversity of representation within Pension Committees and Boards, and views on peer support within the scheme. The SAB had also submitted a response to the MHCLG on the LGPS 'Access and fairness' consultation.

Part A Progress Report for the Quarter Ended 30 June 2025

The committee reviewed the Part A Progress Report for the quarter ended 30 June 2025, which updated them on the Fund's investments and current funding position.

The market value of the Fund investments at 30 June 2025 was £2,021.5m, an increase of £62.1m during the period. The Fund returned 3.63% over the quarter. The indicative funding position at 30 June 2025 was a funding level of 144%, with a future level of return required to be 100% currently at 3.8%. There was a 92% likelihood of achieving this return.