The Pension Board meeting scheduled for 5 November 2025 was set to cover a range of financial and administrative updates concerning the Pension Fund. Key discussions were expected to include the quarterly performance review, cashflow updates, and the progress of the actuarial valuation process. The meeting also had on its agenda the finalisation of the Pension Fund's annual report and financial statements for 2024-25, along with an update on direct property investments.

Pension Administration Update

The Pension Board was scheduled to receive an update on the administration of the Pension Fund. This included information on staffing changes within the Pensions Team, with new Pension Officers commencing employment and a Pension Assistant due to start. The report also detailed the production of Annual Benefit Statements for all active and deferred members, noting that McCloud judgement underpin data was included for most active members, with deferred members' data to be included in the following year's statements. The external audit for 2024/25 by Grant Thornton was reported as complete. Additionally, Pension Savings Statements were sent to members who exceeded the 2024/25 annual allowance limit. Ongoing projects included work on the Business Efficiency & Voluntary Redundancy scheme, with notifications to be sent in early November to successful applicants. Work was also continuing on the McCloud Judgement to include relevant information in all 2026 Annual Benefit Statements. The implementation of the i-Connect system was ongoing, with challenges noted regarding data files following the change to the Oracle system. Progress on Pensions Dashboards was also mentioned, with a deadline of 31 October 2025 for LGPS connect. The Engage system, set to replace Member Self-Service (MSS), was undergoing User Acceptance Training and was due for implementation in November 2025. New workflows were being designed and rolled out to improve workload management and Key Performance Indicators (KPIs). The report included a table detailing the performance indicators for the RBKC Pension Team, showing high completion rates within KPIs for most tasks. The recommendation was for the Pensions Board to note the contents of this report.¹

Cashflow Update

A report was scheduled to be presented on the cashflow of the Pension Fund's bank account, highlighting its importance in mitigating liquidity risk. The report aimed to provide the Pension Board with an update on the Fund's cash holdings to ensure sufficient funds are available to meet obligations. The NatWest bank account serves as the primary account for daily transactions, including receiving member contributions and making pension payments. Cash inflows are generated from monthly contributions from scheme employers and investment income. Rental income and capital repayments from pooled property investments also contribute to maintaining a positive cash balance. Outflows primarily consist of monthly pension payments and management expenses. In months where payments exceed receipts, investment income is used to maintain liquidity. Cash reserves are allocated for property acquisitions, with several prospects under consideration. The report included a summary of actual cashflow for 2023/24 and 2024/25, and forecasts for 2025/26, indicating a potential need to withdraw or redeem approximately £28 million from cash and/or equity assets to meet liability obligations. Global equities were noted as being slightly overallocated to accommodate potential redemptions. Actual cashflow figures for Q2 2025/26 were broadly in line with forecasts. Contributions were slightly higher than forecast, partly due to the Local Government Association (LGA) salary agreement. Property purchases had exceeded prudent forecasts, with three properties acquired in the first six months of 2025/26 totalling £82.7 million. Over £77 million remained to be invested in property assets to align with the current strategic allocation. The Northern Trust account balance had decreased significantly due to property acquisitions. Discussions regarding transitional management fees were planned as the Fund reviews the mandated pooling requirement by March 2026. Officers actively monitor cash levels, making withdrawals from the custodian account as needed. The recommendation was for the Pension Board to note the content of this report.²

Quarterly Performance Review

The Pension Board was scheduled to receive a quarterly performance review for the Fund at 30 June 2025. This report provided a breakdown of investment assets and their performance. The portfolio valuation increased by 3.9% to £1,893 million for the quarter ending 30 June 2025. Baillie Gifford exceeded its quarterly benchmark, although it underperformed over three and five years. The BlackRock MSCI Global Equities Portfolio performed in line with the index for the quarter but was below target over three years. Adams Street underperformed its quarterly benchmark but outperformed its comparable public markets and private equity benchmark since inception. The pooled property manager, CBRE Global Investors, outperformed its quarterly benchmark. The Active Value UK Pooled Property Fund was fully redeemed, allowing funds to be used for direct property purchases. Index-linked gilts were part of the strategy, held until maturity to mitigate CPI risk. The report highlighted that the RBKC Pension Fund continues to be a top performer over longer-term periods, ranking in the top decile across various horizons. However, in the latest 12 months, the Fund achieved a return of 2.2%, ranking in the 83rd percentile, below the universe average. This was attributed to Baillie Gifford's performance and negative returns from index-linked gilts. The report included detailed tables on fund manager performance, asset allocations, and market value summaries.³

Actuarial Valuation Process Update

An update was scheduled on the 2025 actuarial valuation process, conducted by Hymans Robertson LLP. This report aimed to provide insights into the emerging funding positions and key factors influencing changes across LGPS funds since the 2022 valuation. The Local Government Pension Scheme (LGPS) mandates a triennial actuarial valuation to assess the Fund's funding position, determine employer contribution rates, and ensure long-term sustainability. The 2025 valuation, as of 31 March 2025, builds upon the 2022 valuation and considers changes in economic conditions, investment performance, inflation, membership data, and longevity assumptions. The report highlighted emerging insights from a sample of 35 LGPS funds, indicating improvements in funding levels driven by investment returns, lower future inflation expectations, and membership experience. Assumptions for future investment returns (discount rates) have increased, reflecting higher global interest rates. Initial results for the RBKC Pension Fund indicated a funding level of 174% (compared to 154% at 31 March 2022), with assets of £1,829 million against liabilities of £1,049 million. This improvement was attributed to actual experience since 2022, including investment returns and membership trends, as well as changes in future assumptions, particularly higher expected investment returns. Key risks and sensitivities were identified, including investment risk, inflation and longevity risk, and economic uncertainty. The valuation process was ongoing, with employer-level results and proposed contribution rates to follow. The formal valuation report was expected by March 2026, with new rates effective from 1 April 2026.⁴

Final Pension Fund Annual Report, Financial Statements, and External Audit Report 2024-25

The Pension Board was scheduled to review the Final Pension Fund Annual Report and Financial Statements for the year ending 31 March 2025, along with the external Audit Findings Report for 2024-25. The Accounts and Audit Regulations 2015 require local authorities to prepare a Statement of Accounts in accordance with proper practices. The Council's Annual Statement of Accounts for 2024/25, including the pension fund financial statements, had been prepared and submitted for audit. The Pension Fund Annual Report (AR), including the financial statements, was required to be published by 1 December following the financial year-end. The AR was attached as an appendix, providing extensive information for stakeholders. The Board was invited to review the AR, with any comments to be integrated before its publication on the pension fund website. RBKC's audited 2024/25 statement of accounts were presented to the Audit and Transparency Committee on 29 September 2025, with an unqualified audit opinion expected imminently. The Pension Fund financial statements 2024/25 had received a draft Audit Findings Report. Auditors were unable to issue a final audit opinion on the Pension Fund financial statements until the audit of the Administering Authority was complete. No areas of potential material misstatement were identified during the audit, with minor amendments made to disclosure notes for clarity and to correct typos. Unadjusted misstatements were attributed to the timing of valuations and the requirement to publish draft accounts by 30 June.⁵

CBRE Direct Property Update

An update was scheduled on the CBRE Direct Property mandate, providing a summary of performance during the last quarter and an update following recent and pending acquisitions of direct property. The CBRE quarterly update and performance report was attached as an appendix. The direct property portfolio accounted for 17% of the Fund against a 20% target allocation, slightly lower due to an increase in equities. The Fund had completed recent acquisitions, including a mixed-use property and a land acquisition. Several asset management initiatives had been completed during the quarter, resulting in increased passing rent across multiple properties. The portfolio had benefited from an improved Market Rental Value, with increases observed on a significant number of assets. Index-linked rent reviews had supported income growth, with future reviews expected to further enhance contracted income.⁶

Minutes of Pension Board Meetings

The Board was scheduled to review the minutes of previous Pension Board meetings held on 9 July and 18 August. These minutes would serve as a record of discussions and any agreed actions from those earlier meetings.⁷

Any Other Oral or Written Items That the Chair Considers Urgent

This agenda item allowed for any urgent matters, either oral or written, to be raised that the Chair deemed necessary to bring to the Board's attention.

The meeting was scheduled to take place on Wednesday, 5 November 2025, at 2:30 pm in Committee Room 2, Town Hall, Hornton Street, W8 7NX. The contact for the meeting was Jerome Treherne.⁸