The Pensions Committee of Hillingdon Council is scheduled to meet to discuss a range of topics related to the management and performance of the council's pension fund. These include a petition on LGPS divestment, administration and investment reports, responsible investment, risk management and governance. Some of the discussions, particularly those relating to investment strategy and fund manager performance, will be held in private due to the confidential nature of the information.

Here's a breakdown of the key items on the agenda:

Petition on LGPS Divestment

The committee will consider a petition submitted by local residents and members of the Hillingdon Palestine Solidarity Campaign, which requests that Hillingdon Council divests its pension fund investments from companies alleged to be complicit in violations of Palestinian rights. The petition specifically mentions:

• arms companies supplying Israel with weapons and military technology
• companies providing infrastructure for Israel's unlawful military occupation of Palestinian land
• companies conducting business activity in Israel's illegal settlements on stolen Palestinian land

The petition also calls on the council to use its influence within the London Collective Investment Vehicle (CIV) to lobby for divestment from these companies and to end procurement contracts with companies like Barclays that finance companies supplying Israel with weapons. The lead petitioner will be invited to address the committee.

Investment Strategy and Fund Manager Performance

The committee will review the investment strategy and fund manager performance for the quarter ending 30 September 2025. A report pack includes an executive summary that highlights key performance and funding positions. The report pack indicates that the fund officers and LCIV team have worked together to produce an executive summary which will provide easy access to investment related information and statistics.

Key points that are scheduled to be discussed include:

• Funding Level: Increased to 146% (up from 136% in Q2).
• Assets: Increased to £1.54 billion (+£100 million this quarter).
• Liabilities: Reduced by £20 million, improving the surplus.
• Investment Performance: Year-to-date return of +8.4%; 3-year annualised return of +9.6%. The quarterly return was +5.7%, beating the benchmark by 0.3%.
• Top Contributors: LGIM Future World Fund (+2.33%) and LGIM World Developed Equity (+2.16%).
• Areas of Underperformance: Opportunistic Dislocation and some Private Debt allocations.
• Asset Allocation: Overweight in global equities (57%) and property (13%), underweight in multi-asset credit (9%) and infrastructure (5%).

The report pack also includes commentary on the global and UK economic context, equity market performance by sector and region, and fixed income and currency trends. It notes that equity markets have stopped reacting to tariff announcements and continued their trend upwards, with the 'Magnificent 7' stocks recovering further.

The report pack also contains a table summarising manager performance across various asset classes, including global equities, property, multi-asset credit, index-linked gilts, infrastructure, private debt, diversified growth, opportunistic dislocation and private equity.

Responsible Investment

The committee will receive an update on responsible investment activities, including how fund managers are implementing their Environmental, Social, and Governance (ESG) policies. The report pack includes voting statistics from LGIM and the London CIV, as well as examples of engagement activities undertaken by the Local Authority Pension Fund Forum (LAPFF).

The report pack indicates that fund managers carry out proxy voting on the Pension Fund's behalf. It provides a breakdown of voting statistics by LGIM, and London CIV (Ruffer, Wellington and Baillie Gifford).

The report pack also provides snapshots that further contextualise the voting patterns and issues addressed with voting decisions by the managers.

The report pack also indicates that ESG factors play an increasingly important role in determining the performance of certain assets and that Pension Fund asset managers, as part of their ESG commitments undertake various engagement activities in their holistic approach in making investment decisions.

Risk Register

The committee will review the Pension Fund Risk Register, which identifies the main risks to the fund and outlines measures to mitigate those risks. The risk register categorises risks as either open (actively being managed) or closed (managed as business as usual).

Risks which remain open, and which are actively being managed Include:

• PEN 7 Cyber Security
• PEN 9 Liquidity on asset management risk of failure to liquidate assets or meet drawdown calls
• Pen 10 Liquidity on members dealings risk that the fund is unable to settle member payments
• PEN 11 Failure of the pool in management of funds / access to funds
• PEN 12 Failure of the Fund's governance to comply with statutory requirements
• PEN 13 Key officer risk
• PEN 14 Failure of employers to deliver accurate and timely employee administration information

Governance

The committee will discuss several governance-related items, including:

• Pension Committee Workplan: Review and suggestions for future agenda items.
• Continuous Professional Development: Note the committee's training log.
• General Code of Practice (GCoP): Note the update on compliance efforts.
• Draft Funding Strategy Statement (FSS): Note and approve the draft for consultation. The FSS sets out the approach for ensuring the LGPS remains solvent, affordable and sustainable.
• Revised Internal Dispute Resolution Procedure (IDRP) Guide: Note and approve the revised guide. The IDRP guide provides a straightforward step for employees of how the internal dispute resolution procedures operate in the Local Government Pension Scheme and specifically within London Borough of Hillingdon Pension Fund.
• Revised Pensions Administration Strategy Statement: Note and approve the revised statement. This strategy paper has been revised to include provisions of the Pensions Dashboard Regulations 2022 and clearly spell out responsibilities of both the fund and employers.