The Pensions Committee of Islington Council met on Monday 16 March 2026 to review the performance of the Pension Fund, discuss updates to the investment strategy, and consider the results of the actuarial valuation's draft Funding Strategy Statement consultation. Key decisions included noting the fund's performance, agreeing to delegate authority for the next steps in implementing a new strategic asset allocation, and agreeing to delegate authority to finalise and publish the Funding Strategy Statement.

Pension Fund Performance - October to December 2025

The committee noted the performance of the Pension Fund for the period October to December 2025. The overall fund performance for the quarter was 2.8%, against a benchmark of 3.0%. Over the 12 months to December 2025, the fund returned 9.5%, underperforming its benchmark of 12.2%. Several individual fund managers also underperformed their respective benchmarks during the quarter. For example, the LCIV Sustainable Equity Fund returned 2.7% against a benchmark of 3.2%, and the LCIV Global Equity Fund returned 1.5% against a benchmark of 3.5%. However, some managers performed well, such as Amundi Emerging Equity Focus, which achieved a return of 21.6% against a benchmark of 25.1% in its first year. The committee also noted the ongoing liquidation of the Hearthstone UK Residential Property Fund.

Investment Strategy Update and Review

The committee reviewed progress on implementing the current investment strategy and considered proposed alternatives for the strategic asset allocation (SAA). Mercer presented a presentation on alternative SAA options, and the committee was asked to agree on a preferred proposal from Table 3 of the report. This table outlined three potential SAA options: the current SAA, a December proposal (Strawman 1), and a new proposal (Strawman 4). The proposed changes included shifts in allocations to Public Equity, Private Equity, Infrastructure, Property, Multi-Asset Credit, Index Linked Gilts, and Corporate Bonds. Subject to agreeing on a new SAA, the committee agreed to delegate authority to the Director of Corporate Resources and advisors to commence the next steps of implementation. The committee also noted the PIRC Voting guidelines and changes for 2026, and agreed to receive a further progress report at the next meeting.

2025 Actuarial Valuation - Draft Funding Strategy Statement Consultation Results

The committee considered the draft Funding Strategy Statement (FSS) and the summary of key changes, as well as the employer comments received from the consultation exercise. The FSS sets out the funding strategy for the Islington Council Pension Fund in accordance with the Local Government Pension Scheme Regulations 2013. The report detailed the key funding assumptions and parameters used by the Actuary, including discount rates, inflation, life expectancy, and deficit recovery periods. The committee agreed to delegate authority to the Section 151 Officer and Fund Actuary to finalise any agreed amendments and regulatory changes, and to publish the final FSS as part of the Actuarial Valuation Report by 31 March 2026. Appendix 2 provided a summary of employer consultation results, indicating that most employers acknowledged receipt of the draft FSS, with some seeking clarity on specific points.

LGPS Fit for the Future - Draft Guidance

The committee noted the draft statutory guidance issued by the government regarding LGPS pooling reforms. This included guidance on fund governance, the Investment Strategy Statement (ISS), and asset pooling. The draft guidance covers areas such as knowledge and understanding requirements for those involved in fund management, the role of a senior LGPS officer, the appointment of an independent person, and the process for Independent Governance Reviews (IGRs). The committee was informed that once the Pension Bill is passed into law, the council will need to implement the required changes and work with LCIV (London Collective Investment Vehicle) within the new structure.

Pension Fund Forward Work Programme

The committee noted the forward work programme for the Pensions Committee for the upcoming year, as detailed in Appendix A. This plan outlines agenda items for forthcoming meetings, including performance reports, LCIV updates, the actuarial valuation report, the draft FSS post-consultation, the Investment Strategy Update, and the Asset Allocation. The committee also noted that a training strategy for Pensions Committee members was being developed in line with new Fit for Future government proposals, which would require enhanced knowledge and skills for committee members. The committee was also informed that an Independent Person was soon to be appointed to the committee to strengthen governance.