The Pension Policy & Investment Committee of Enfield Council was scheduled to discuss the cashflow implications of the 2025 triennial valuation, receive an update on the triennial valuation itself, and consider the admission of Buckinghamshire Council to the London Collective Investment Vehicle (LCIV). The committee was also set to review a quarterly monitoring report on the fund's investments.

Cashflow Implications of the 2025 Triennial Valuation

The committee was scheduled to consider a report detailing the cashflow implications arising from the 2025 triennial valuation of the London Borough of Enfield Pension Fund. This report, drawing on actuarial projections from Hymans Robertson and a liquidity review by Aon, was expected to outline how reduced contribution income from April 2026 would impact the fund's cashflow. It was anticipated that the fund would transition into structural cashflow negativity, meaning benefit payments would exceed contributions, necessitating greater reliance on investment income and asset sales. The report was also to assess how income from assets and liquidity management could support future benefit payments and outline the requirement to provide London CIV (LCIV) with a clear annual income requirement from April 2026.

The report noted that the 2025 actuarial valuation confirmed the fund remained in a strong financial position with an estimated funding level of 127% as at 31 March 2025. This allowed for a reduction in employer contribution rates from an average of 18.9% of pay to approximately 16% from April 2026. However, these reductions would decrease the fund's recurring contribution income at a time when benefit payments are projected to rise significantly over the next two decades.

Aon's review concluded that the fund's liquidity position was strong under all modelled scenarios, including recession and high-inflation environments. The analysis indicated that the fund would retain sufficient liquid assets to meet all cashflow requirements over a 10-year horizon without needing to sell illiquid positions. Aon also identified scope to increase income generation from existing assets, such as by switching certain holdings into income-distributing modes.

Triennial Valuation Update

The committee was scheduled to receive an update on the 2025 triennial valuation. This valuation assesses the financial health of the fund by reviewing its assets, liabilities, and long-term funding position to ensure employer contribution rates are both affordable and sufficient to meet members' guaranteed benefits. The report was expected to summarise feedback received from participating employers during the consultation phase, with a particular focus on responses from Southgate School and Ivy Learning Trust. It was also to present the rationale for maintaining the 16% employer contribution floor as part of the Funding Strategy Statement (FSS) for the 2025–2028 valuation cycle.

Southgate School had queried why their employer contribution rate would remain broadly stable, requesting a reduction to 14.8%, and highlighted improvements in their funding position. Ivy Learning Trust sought clarity on the transparency of the primary rate calculation, consistency with other LGPS funds, and assurance that the fund reflects the strong funding position of academies.

The report's response to employer feedback emphasised that cross-fund comparisons can be misleading due to differences in membership demographics, maturity, investment strategies, and funding levels. It also highlighted the importance of maintaining a stable funding strategy, with the 16% minimum employer contribution rate designed to protect the long-term solvency of the fund, provide consistency between valuation cycles, and avoid sharp rate movements driven by short-term market conditions. The report stated that the fund's actuary modelled employer-specific contribution rates with at least an 80% likelihood of reaching full funding over the long term, applying the 16% floor where modelled rates were below this.

Admitting Buckinghamshire to LCIV

The committee was asked to support the admission of Buckinghamshire Council to the London Collective Investment Vehicle (LCIV) as a new participating authority. This decision rests with the company's shareholders, which include Enfield Council. The report highlighted that Buckinghamshire's previous investment pool was disbanded under government instruction, leaving them seeking a new pool.

The business case for Buckinghamshire's admission emphasised government policy alignment, economic and financial benefits through increased scale and revenue for LCIV, and a geographic and strategic fit due to Buckinghamshire bordering Greater London. It was stated that Buckinghamshire's participation would increase LCIV's pooled assets by around 10%, strengthening negotiating power with asset managers and supporting new fund launches. The admission was presented as having no detriment to existing members, with Buckinghamshire making a share capital investment equivalent to existing partner funds.

Quarterly Monitoring Report

The committee was scheduled to receive a quarterly monitoring report on the Enfield Pension Fund's investments, providing an update on performance as at Q3, 30 September 2025. The report was expected to include a market update and investment outlook from the fund's investment advisors, Aon.

The report indicated that the fund's total value as at 30 September 2025 was £1,721.6m, an increase of £77.9m (4.8%) over the quarter. Global equity markets had risen, with the MSCI ACWI increasing by 8.1% in local currency. However, the fund's overall performance over the quarter underperformed its benchmark, primarily due to equities, bonds, property, infrastructure, and private equity.

Specific manager performance was detailed, with notes on the underperformance of some equity managers and the volatility in UK gilt markets. The report also highlighted that the fund was significantly underweight in infrastructure compared to its strategic allocation, with recent commitments expected to be called over the next 2-4 years. The property asset class was noted for its continued negative returns over three years, with a review of this allocation planned. The cash position at the end of the quarter was £74.18m (4.31%), invested in short-term money market funds.

The report also included an economic and market outlook from Aon, covering inflation, recession, interest rates, and market performance. This outlook noted that the Federal Reserve and the Bank of England had cut interest rates. The report also discussed the UK Chancellor's tax measures and their potential impact on fiscal headroom.