The Joint Pensions Committee is scheduled to meet to discuss the external audit results, the funding strategy statement, general pension matters and the investment performance of the Wandsworth Pension Fund. They will also discuss the investment strategy statement review and hear a presentation from Schroders.

External Audit Results Report

The committee will receive an update on the Pension Fund External Audit Results Report for 2024/25 from Ben Lazarus of Ernst & Young (EY), the Fund's external auditors. The report pack includes a draft of the ISA 260 Audit Results Report 2024/25 from EY. The report states that EY has reviewed information provided by officers in response to an objection received by the auditor, and is satisfied that no further audit action is needed. The Audit Results Report will become final when EY sign the audit opinion for both the Wandsworth Council and the Pension Fund accounts, after which the Chair of the committee will be asked to sign the Pension Fund Accounts and the Letter of Representation.

Draft Funding Strategy Statement

The committee will consider a revised draft of the Funding Strategy Statement (FSS) for the pension fund valuation. The FSS lays out the approach to handling the risks involved in valuations and determining how any surplus or shortfall is to be spread. The report pack notes that the actuary is required to consider the council's FSS when determining employer contribution rates to apply from 1 April 2026.

The report pack highlights a number of changes in the revised FSS, including:

• The actuarial assumptions to be used by the Fund Actuary for the 31 March 2025 valuation.
• The fund's approach to managing surpluses and deficits, including how a deficit or surplus will be spread over a period of time for participating employers.
• Details of the pragmatic approach the fund currently takes to reviewing the employer covenant of participating fund employers.
• How the presence of a guarantor is taken into account for funding purposes.
• The fund's default approach for new admission bodies¹ being a pass-through arrangement.
• How employers exit the fund and how any exit payment or credit is calculated.

The Fund Actuary has considered climate risk in their valuation approach, as required by the Government Actuary's Department. The report pack notes that the Fund has been considering climate risk in its investment strategies for some time, but this has extended to funding risk and what impact climate risk might have on the liabilities.

General Pension Matters

The committee will receive an update on a number of general pension matters. The report pack refers to a consultation on proposed changes which will be built into the regulations. Councillor Angela Ireland, Cabinet Member for Finance, and officers will review the detail and respond accordingly. The report pack also notes that the Fund is well placed to implement the proposed changes when and if they are ratified, and summarises these changes and how they will affect the Fund. The report pack states that there will be two new additional roles:

• The appointment of an Independent Adviser to the committee.
• A Senior Responsible Officer.

The committee will also receive an update on Buckinghamshire Pension Fund joining the London Collective Investment Vehicle (LCIV), and the London CIV are continuing to have discussions with partner funds on how they will meet the Responsible Investment requirements of each of the Funds.

The report pack also notes that the government are consulting on restoring access to the Local Government Pension Scheme for councillors in England and extending it to mayors, making it simpler for Multi-Academy Trusts to apply for their staff from different schools to be in the same pension fund, and implementing new Fair Deal protections ensuring workers outsourced from local government keep seamless access to the Local Government Pension Scheme.

Quarterly Investment Performance

The committee will receive a report summarising the performance of the Wandsworth Pension Fund investments to 30 September 2025. The report pack states that the Fund was 116% funded at the 2022 valuation, and the Fund's current required return/discount rate is 4.4% annual (1.1% per quarter).

The report pack notes that the only managers who did not have positive absolute returns this quarter were Schroders and LCIV Renewable Infrastructure.

The report pack also notes that the LCIV Global Equity Focus fund was 16.3% of the total Fund value this quarter, and recommends that as the committee is reviewing the use of active managers, it is recommended to address any overweight positions when implementing any changes agreed in this review.