The Pensions Advisory Panel met on Tuesday 23 September 2025 to discuss updates on the Fund's investments, including asset allocation, performance, and responsible investment strategies. The meeting also covered the Fit for the Future initiative, the refresh of the Pension Fund Cash Management Policy, and updates from the Local Pension Board and Pension Services.

Fit for the Future Update

The panel was scheduled to receive an update on the Fit for the Future initiative, which aims to transition the Fund's assets to the London CIV investment pool. The report highlighted that this transition has a deadline of 31 March 2026. It was recommended that an additional meeting be scheduled in November, inviting members of the Local Pension Board, to provide training on the impact of the actuarial valuation on the Fund's strategic asset allocation.

Asset Allocation Update

An update was scheduled regarding the Fund's asset allocation as of 30 June 2025. The market value of the Fund had increased to £2,328.6 million. The report detailed the breakdown of asset classes, including low carbon passive equities, active emerging market equities, active global equities, multi-asset credit, index-linked gilts, property, and ESG priority investments. The report noted that all allocations were within the maximum permitted by the Strategic Asset Allocation (SAA), with a key overweight position in ESG priority funds and an underweight in property. The report also provided details on fund manager activity, including redemptions and property transactions, as well as a breakdown of ESG priority holdings and private market cash transactions. An overview of the Fund's UK holdings was also to be presented. Investment performance for the quarter showed a fund return of 2.9%, lagging the benchmark return of 3.6%.

Advisers' Updates

The panel was set to receive investment reports from its independent adviser, David Cullinan, and Aon's quarterly investment dashboard for the quarter ending June 2025. The Aon dashboard provided an executive summary of market conditions, including the impact of tariff uncertainty on global equity markets and the UK property market. It also presented the Fund's expected return of 7.4% and highlighted strategic positioning, noting an underweight to Property and an overweight to the ESG Priority Allocation relative to target allocations. Manager performance data was also included, detailing returns relative to benchmarks across various asset classes.

Carbon Footprint Update

An update on the Fund's carbon footprint as at 30 June 2025 was scheduled. The report indicated an increase in the Weighted Carbon Intensity (WCI) of the Fund by 7% compared to the previous quarter. However, on an aggregate basis, the Fund had reduced its WCI by approximately 81% since the September 2017 baseline. The report detailed the changes in WCI across different asset classes, including developed market equities, emerging markets equity, global equity, multi-asset credit, property, ESG priority allocations, sustainable infrastructure, and index-linked gilts.

Update on Engagement and Voting Activity

The panel was to receive an update on the Fund's engagement and voting activity for its underlying equity investments for the quarter ended 30 June 2025. This report outlined key ESG-focused engagement and voting themes, including climate risk, biodiversity, water management, human rights, board and leadership quality, corporate strategy, and compensation. Summaries of engagement and voting activity from LAPFF, Comgest, Newton, LGIM, and BlackRock were to be presented, along with select case studies.

UK Stewardship Code Application Update

An update was scheduled on the Fund's successful application to become a signatory to the UK Stewardship Code. The report provided an overview of the Code, which sets stewardship standards for organisations investing money on behalf of UK pensioners. It detailed the Code's principles and reporting expectations, and confirmed that the Fund had met the required standard of reporting for the 2025 application window. The report also outlined proposed changes to the definition of 'Stewardship' in the 2026 Code and their implications for the Fund.

Responsible Investment General Update

This item was to provide an update on two key Responsible Investment (RI) aspects of the portfolio: the Fund's 2030 net zero target and its approach to exposure to the conflict in the Middle East. The report noted the ongoing focus on decarbonisation and discussions with London CIV regarding their approach to net zero milestones. It also addressed the Fund's monitoring and reporting of exposure to companies operating in the Occupied Palestinian Territories and engagement with investment managers on human rights.

Local Pension Board Update

The panel was scheduled to receive an update from the Local Pension Board (LPB) meeting of 2 July 2025. Key discussion areas included a training session on LGPS pooling and governance implications, an update on the Action Tracker, and a report from Pension Services covering recruitment, IT systems, the National Pension Dashboard Programme, and Annual Benefit Statements. The report also addressed the McCloud remedy and the 2025 Annual Benefit Statement, the revised Risk Register, the Breaches Log, and the LGPS Access and Fairness Consultation. Updates on cyber security assessments of external providers and the General Code Action Plan were also on the agenda.

Pension Services Update

An update on the pensions administration and operational function was to be presented. This included information on recruitment within Pension Services, IT and systems development, progress on the National Dashboard Programme, and communication initiatives such as the issuance of Annual Benefit Statements. The report also provided an update on LGPS Auto Re-Enrolment, the Strictly Education payroll provider, and complaint management cases against employers and the administering authority. Performance metrics for administration were to be detailed in an appendix.

Refresh of Pension Fund Cash Management Policy

The panel was asked to note updates to the Fund's cash management policy, reflecting changes in operational procedures following the appointment of Northern Trust as the Fund's global custodian. The report detailed the rationale for the policy review in 2023, including managing cash negative positions and the increase in illiquid investments. It outlined the five-tier cash management structure and provided an update on the policy in practice, including liquidity transactions and rebalancing activities. The report also discussed updates since 2023, including the role of Northern Trust and the reclassification of Newton from Tier 4 to Tier 3.

The meeting was scheduled to take place at Meeting Room 225, 160 Tooley Street, London SE1 2QH.