The Pension Board of Westminster Council met on Thursday 26 March 2026 to discuss the performance of the council's pension fund, pension administration updates, and ongoing projects. Key decisions included noting the fund's investment performance and approving updates to pension administration processes.

Pension Administration Update

Sarah Hay, Strategic Pension Lead, presented an update on pension administration for January and February 2026, delivered by Hampshire Pension Services (HPS). Key performance indicators (KPIs) remained strong, with 100% compliance with agreed standards. The number of cases on hold was noted, and the report highlighted a continued increase in members registering for the member portal, exceeding 55% of the total membership. The agenda for the upcoming Pensions Annual Meeting on 30 March 2026 was shared, and recruitment for additional Pension Board member representatives was underway.

Performance of the Council's Pension Fund

Phil Triggs, Tri-Borough Director of Treasury and Pensions, presented the performance of the Pension Fund's investments up to 31 December 2025. The Fund achieved a positive absolute return of 1.57% net of fees for the quarter, though it underperformed its benchmark by 0.97%. Over one and three-year periods, the Fund also delivered positive returns but underperformed its benchmark. The report attributed the quarterly underperformance primarily to the LCIV Global Equity Quality Fund, from which the committee had agreed to divest. The total value of the Fund's invested assets stood at approximately £2,298.6 million.

The report also detailed the top five risks to the Pension Fund, which included regulatory and compliance risks related to proposed reforms to the Local Government Pension Scheme (LGPS), significant volatility in global investment markets due to geopolitical and economic uncertainty, and concerns about London CIV's resources to monitor investment strategy implementation. Liability risks related to higher-than-anticipated price inflation were also highlighted.

Updates were provided on the London CIV (LCIV), with staff retention noted as more stable following recent recruitment. The transition from the LCIV Global Equity Quality Fund to BlackRock's passive global equity fund was ongoing, with a planned liquidation of the sub-fund by LCIV. The report also confirmed that a loan to Westminster Housing LLP for temporary accommodation was in progress and expected to complete by 31 March 2026.

The Pension Schemes Bill, which aims to place asset pooling on a clearer statutory footing, was progressing through the House of Lords and was expected to receive Royal Assent in March 2026, with key changes effective from 1 April 2026. The report outlined key milestones for the fund in relation to these reforms, including the development of a governance strategy, training strategy, and conflict of interest policy.

A significant portion of the discussion focused on the actuarial valuation results as at 31 March 2025. The valuation showed an improved funding level of 140%, with assets of £2,104 million and liabilities of £1,506 million, resulting in a surplus of £598 million. This improvement was primarily attributed to higher assumed future investment returns. Employer contribution rates were set to reduce on average, with a primary rate of 20.5% of pay. The report detailed the breakdown of primary and secondary rates for various employer groups, including Westminster City Council, academies, and other employers.

Concerns were raised by Councillor Chris Smith regarding the reduction in employer contribution rates, particularly in light of potential redundancies within Westminster Council and the current economic climate. He questioned the rationale behind the proposed rates, especially when compared to the significant surplus. Patrick Rowe, Strategic Manager for Tri-Borough Treasury and Pensions, explained that the contribution rates were set based on a risk-based approach, aiming for stability and affordability, and that the discount rate assumption included a level of prudence. He noted that while the modelling supported the reductions, there was an unease about large reductions and that the rates were subject to review.

The Board also discussed the role of the Pension Board in scrutinising the London CIV (LCIV) and the implications of the new Pension Schemes Bill. There was a debate about whether the Board's statutory role extended to scrutinising investment decisions made by the LCIV, with differing views expressed on the scope of the Board's oversight responsibilities.

Finally, Terry Neville OBE, Chair, and Councillor Matt Noble, Vice-Chair, along with other members and officers, reflected on the end of the council term and expressed their thanks for the collaboration and work undertaken during their tenure.