Councillor Cryss Mennaceur, Chair of the Pension Committee, led a meeting where members reviewed the fund's performance, administration, and future strategies. The committee approved a draft Funding Strategy Statement and delegated authority for key actions regarding investment management and advisor appointments. They also noted updates on administration performance, projects, governance, and investment performance.

Triennial Valuation and Funding Strategy Statement

The committee approved the draft Funding Strategy Statement (FSS) for the pension fund¹, a document required by LGPS ² regulations that sets out the fund's approach to meeting its long-term pension liabilities. The FSS connects the actuarial valuation to the practical funding policies of the fund, especially how contribution rates are set and reviewed for all scheme employers. The main changes to the FSS included structural alignment, standardised terminology, enhanced governance, and updated assumptions.

The committee also noted the initial whole fund results, the proposed valuation assumptions, and the potential impact of market volatility after 31 March. The triennial valuation, which occurs every three years, assesses the pension scheme's assets and liabilities using market conditions to calculate the overall funding position.

Key assumptions for the valuation include:

• A prudence level of at least 85%, resulting in a future investment return assumption (discount rate) of at least 5.3% per annum (pa).
• A CPI inflation assumption of 2.3% pa, based on best estimate inflation projections from the Actuary's model.
• Longevity assumptions set in line with the Fund Actuary's best estimate assumptions, supported by Club Vita analysis.

Pension Administration Performance Update

The committee noted an update on the key administration performance of the Shared Pensions Administration Service. The report highlighted a significant reduction in outstanding processes, falling from 962 to 820 since the last report, with no outstanding cases overdue by more than three months.

To maintain performance, officers developed two new Key Performance Indicators (KPIs):

• No more than 10% of all cases will be overdue.
• No more than 10% of overdue cases will be more than a month overdue.

A backlog threshold was set for each target, with a recovery plan to be implemented if performance reaches the backlog threshold.

Pension Administration Projects Update

The committee approved the Pensions Dashboard Matching Policy and noted updates on key administration projects.

Annual Benefit Statements: The production of the 2025 statements was complete, with 100% of deferred member statements and 89.09% of active member statements produced and published to the member portal. The remaining active member statements relate to members with unprocessed leaver processes, which require individual resolution.

Pensions Dashboard: The fund's implementation project is on track to meet the statutory staging date of 31 October 2025. The committee approved a formal Data Matching Policy, which defines the data items and criteria the fund will use to verify a member's identity and match them to their correct pension record. The policy is based on two types of match:

• Full Match: Achieved when three core data items are successfully verified: surname, date of birth, and National Insurance number.
• Partial Match: Occurs when there is a high probability of a match, but one piece of data may be inconsistent.

McCloud Remedy: The fund did not meet the statutory implementation deadline of 31 August 2025, due to delays in receiving a functional software solution and challenges relating to historic data collection. A revised project plan has been established with a new target completion date of 30 June 2026, and the breach has been reported to the Pensions Regulator³ (tPR).

Annual Report and Accounts 2024-2025

The committee was asked to approve the Pension Fund Annual Report 2024/25 and delegate to the Strategic Director of Resources any changes required as a result of the external audit.

Key points from the report included:

• The Fund's net assets rose from £924m to £979m during 2024/25, an increase of £55m.
• The Fund returned 3.7% over the year, ahead of the Pensions & Investment Research Consultants (PIRC) local authority universe average.
• Total contributions received in 2024/25 were £73.747m, significantly higher than £49.086m in 2023/24, largely due to transfers into the Fund.
• The Fund increased its proportion of assets pooled with the London CIV⁴ (LCIV) to 84% at the end of March 2025.

Governance and Risk Update

The committee noted an update on key governance activities and reviewed the fund's risk register. The risk register categorises all risks under three main themes: administration, funding and investments, and governance. As of the report, administration risks were rated amber overall, with one red and two amber risks. Funding and investments and governance risks were rated green.

The red rated risk was the failure of software provider Civica to provide software compliant with LGPS Regulations.

Work Programme Update

The committee noted the updated Work Programme, which sets out the proposed indicative agenda items for the committee meetings that are due to take place over the next year.

Quarterly Investment and Manager Performance

The committee noted the performance of the fund during the quarter ended 30 June 2025, the fund's actual asset allocation, funding level, and cashflow position as at 30 June 2025, and the update on the LCIV.

Key points from the report included:

• The market value of the fund's assets at 30 June 2025 was £1,018m, an increase of £52m over the previous quarter.
• The fund outperformed the benchmark by 0.8% over the quarter, with a return of 3.9% against a benchmark of 3.1%.
• The funding level as at 30 June 2025 was 150%, compared to 101% at the previous triennial valuation of 31 March 2022.

The committee delegated authority to the Section 151 Officer for signing an Investment Management Agreement (IMA) with the LCIV and to carry out an open procurement exercise for an independent advisor for the fund and to make the appointment decision.