The Islington Pensions Committee was scheduled to meet to discuss fund performance, the Funding Strategy Statement, and the London CIV. Councillor Paul Convery, Chair of the Audit and Risk Committee and the Pensions Committee, was expected to chair the meeting. The committee was also expected to review its forward work programme and training requirements.

2025 Actuarial Valuation and Draft Funding Strategy Statement

The committee was scheduled to discuss the 2025 actuarial valuation and a draft Funding Strategy Statement (FSS). The report pack included a presentation from the Fund Actuary on the valuation results and considerations for the FSS consultation, which was included as an exempt appendix.

The committee was asked to agree on proposed funding strategy assumptions and parameters for consultation with employers between December and January 2026. The report pack stated that officers, along with the Fund Actuary, would update the draft FSS for consultation with employers admitted into the Islington Pension Fund. The committee was also expected to receive the consultation results and delegate powers to officers to update and finalise the draft FSS for approval at the next meeting in March 2026.

According to the report pack, the key assumptions used by the Actuary in determining the valuation outcomes are discount rates, inflation, and life expectancy.

• Discount rate: The proposed discount rates were CPI+2.8% for past service and CPI+2.25% for future service.
• Inflation: The long-term rate of inflation proposed was 2.6% per annum.
• Life Expectancy: The proposed life expectancy assumptions were expected to reduce both liabilities and the future service rate.

The report pack also summarised funding strategy recommendations, including:

• A reduction of deficit recovery periods for open, ongoing employers in deficit, by a maximum of three years, subject to a minimum of 12 years.
• A contribution sustainability reserve, where only employers above 110% funded could potentially benefit from surplus contribution offsets, spread over 12 years.
• Maintaining the ill-health captive premium at 0.7% per annum of pay.
• Maintaining the allowance for administrative expenses at 0.9% per annum of pay.

The report pack stated that, based on the parameters adopted, the total required contribution rate for the council was expected to reduce by approximately 5-6% per annum of pay. It also noted that funding positions for a number of employers were expected to show a surplus position, with no further deficit contributions payable, and that the extent to which employers would benefit from surplus offsets would depend on whether their funding level exceeded 110%.

The report pack stated that, given the improvement in the council's balance sheet position since the 2022 valuation, any Local Education Authority (LEA) schools converting to academy status after 31 March 2025 would also be allocated a share of the council's surplus.

The report pack also noted that the use of surplus towards redundancy strain costs over the intervaluation period would be at the discretion of the Fund and subject to the employer meeting certain criteria specified in the FSS, and that a reserve of £20 million had been proposed for the council.

Subject to the approval of the recommended actuarial valuation assumptions, the actuary had calculated the long-term average future employer contribution rate for the whole fund level to be 16.0% of pensionable pay, and the funding level to be 112%, equivalent to a surplus of assets over liabilities of £215 million.

Pension Fund Performance

The committee was scheduled to discuss the performance of the Islington Pension Fund for the period of 1 July to 30 September 2025. The report pack included a report from the Acting Corporate Director of Resources, as well as a presentation by Apex, independent investment advisers, on fund managers' quarterly performance, attached as Appendix 1 to the report.

The report pack recommended that the committee note the performance of the fund from 1 July to 30 September 2025, as per the BNY Mellon interactive performance report, and receive the presentation by Apex on fund managers' quarterly performance.

The report pack provided a summary of fund managers' performance for the quarter:

• The LCIV Sustainable EQ- RBC Exclu fund had an asset allocation of 10.3% and an asset value of £224.3 million. Its latest quarter performance was 8.1% (portfolio) against a benchmark of 9.2%.
• The LCIV -Newton fund had an asset allocation of 16.0% and an asset value of £348.6 million. Its latest quarter performance was 5.6% (portfolio) against a benchmark of 9.6%.
• The Legal & General-Paris Aligned fund had an asset allocation of 19.7% and an asset value of £428.9 million. Its latest quarter performance was 9.4% (portfolio) against a benchmark of 9.3%.
• The Amundi fund had an asset allocation of 5.3% and an asset value of £115.1 million. Its latest quarter performance was 6.7% (portfolio) against a benchmark of 7.6%.
• The Quinbrook fund had an asset allocation of 4.7% and an asset value of £103.2 million. Its latest quarter performance was 4.9% (portfolio) against a benchmark of 2.9%.
• The Pantheon fund had an asset allocation of 5.3% and an asset value of £115.6 million. Its latest quarter performance was 3.3% (portfolio) against a benchmark of 2.4%.
• The Aviva fund had an asset allocation of 8.5% and an asset value of £185.9 million. Its latest quarter performance was 0.5% (portfolio) against a benchmark of -1.4%.
• The Columbia Threadneedle Investments (TPEN) fund had an asset allocation of 6.1% and an asset value of £132.4 million. Its latest quarter performance was 1.2% (portfolio) against a benchmark of 1.2%.
• The Franklin Templeton fund had an asset allocation of 1.3% and an asset value of £27.7 million. Its latest quarter performance was -1.0% (portfolio) against a benchmark of 2.4%.
• The Hearthstone fund had an asset allocation of 0.4% and an asset value of £9.6 million. Its latest quarter performance was -19.9% (portfolio) against a benchmark of 1.8%.
• The Standard Life fund had an asset allocation of 3.6% and an asset value of £77.7 million. Its latest quarter performance was 0.7% (portfolio) against a benchmark of 0.7%.
• The M&G Sustainable Alpha Opportunities fund had an asset allocation of 4.4% and an asset value of £95.8 million. Its latest quarter performance was 1.5% (portfolio) against a benchmark of 1.8%.
• The Schroders fund had an asset allocation of 1.2% and an asset value of £25.1 million. Its latest quarter performance was 5.7% (portfolio) against a benchmark of 1.6%.
• The Churchill Senior loan Fund IV had an asset allocation of 3.7% and an asset value of £81.2 million. Its latest quarter performance was 4.4% (portfolio) against a benchmark of 1.2%.
• The Permira Credit Solution fund had an asset allocation of 1.8% and an asset value of £39.4 million. Its latest quarter performance was 2.1% (portfolio) against a benchmark of 1.5%.
• The Crescent Capital fund had an asset allocation of 1.9% and an asset value of £42.1 million. Its latest quarter performance was 3.6% (portfolio) against a benchmark of 2.4%.

The report pack stated that the value of the total fund was £2,179.5 million.

The report pack also provided details on the performance of specific funds, including the LCIV RBC Sustainability Exclusion Fund, LCIV Newton Investment Management, Legal and General Paris Aligned ESG Passive Index, Amundi Emerging Equity Focus, Aviva, Columbia Threadneedle Property Pension Limited (TPEN), Franklin Templeton, and Hearthstone.

London CIV Update

The committee was scheduled to receive an update on the London CIV (Collective Investment Vehicle). The report pack included the LCIV October 2025 newsletter as an exempt appendix, as well as a business case concerning Buckinghamshire Pension Fund potentially joining London CIV as their pooling partner.

The report pack recommended that the committee note the LCIV October 2025 newsletter and the LCIV Bucks Business Case. It also recommended that the committee agree to delegate authority to the Corporate Director of Resources and Monitoring Officer to review and agree to the LCIV Articles of Association and Shareholders Agreement.

The report pack noted that Islington is one of 33 London local authorities who have become active participants in the London CIV programme, and that the London CIV has been constructed as a FCA regulated UK Authorised Contractual Scheme (ACS).

The report pack provided an update on the LCIV's activities, including a sustainable working group meeting to discuss the matrix options on responsible investment with Partner funds, and a workshop with Partner funds to discuss and walk through the proposed model for service provision post March 2026. It also noted that the LCIV Investment management agreement was being reviewed by partner funds.

The report pack stated that Buckinghamshire Pension Fund had officially announced their preference to join London CIV as their pooling partner, and that the government had been advised and had not objected.

Pensions Committee Forward Work Programme

The committee was expected to review and discuss the Pensions Committee Forward Work Programme for 2025/26. The report pack included the forward plan as Appendix A.

The report pack recommended that the committee note Appendix A, agree to make amendments to Appendix A where priorities have changed, and review any training requirements.

The report pack stated that the forward plan would be updated as necessary at each meeting, to reflect any changes in investment policy, new regulation, and pension fund priorities after discussions with members. It also noted that there would be a standing item at each meeting on performance and the LCIV.

The report pack included a list of past training for members before committee meetings, including actuarial updates, net zero carbon transition training, impact investment training, and shareholder voting guidance training.