The Pension Fund Committee of Westminster Council met on Tuesday 14 July 2026, discussing the fund's investment strategy, performance, and administration. Key decisions included a shift in the strategic asset allocation, reducing global equities and establishing an allocation to UK Index-Linked Gilts, and the approval of a new Conflict of Interest Policy.

Investment Strategy Review

The committee undertook a significant review of the fund's investment strategy, prompted by a reduction in the funding level to 126% as of 31 March 2026. Following extensive discussions, the committee resolved to:

• Reduce the strategic allocation to global equities to 60%.
• Redeem the 6% allocation to Buy and Maintain credit.
• Establish a new 9% allocation to UK Index-Linked Gilts using the proceeds from the equity reduction and the removed credit allocation.

The committee also requested further analysis on alternative long-term asset allocations, while maintaining listed equities at 55% of total assets, in line with the existing target allocation. This decision reflects a move towards greater inflation protection and a more balanced approach to risk and return, acknowledging the fund's long-term investment horizon and strong covenant backing. The implementation of these changes will be managed through the London CIV¹.

Private Markets Considerations

The committee considered the role of private markets within the fund's investment strategy. While acknowledging the benefits of diversification, illiquidity premiums, income generation, and inflation protection offered by private markets, the committee was advised by Isio² not to materially increase the overall illiquid allocation beyond the current level of approximately 33% to 35%. This approach aims to maintain flexibility. The committee supported continued consideration of private equity, emphasizing the importance of careful manager selection, scrutiny of fees, and clear performance reporting. London CIV³ confirmed it was developing global private equity and UK venture capital solutions, and the committee expressed a preference for a globally diversified approach. The committee requested detailed plans for the transition of existing private market holdings and clarification on the responsibilities of the fund and London CIV in this process.

Quarterly Performance Report

Phil Triggs, Tri-Borough Director of Treasury and Pensions, presented the fund's investment performance up to 31 March 2026. The committee noted that the fund's investments had delivered a negative absolute return of 2.95% for the quarter, underperforming the benchmark by 1.53%. However, over the one-year and three-year periods, the fund had delivered positive absolute returns of 6.60% and 8.20% per annum, respectively, although it underperformed its benchmark over these longer periods as well. The committee noted that the underperformance in the quarter was primarily attributed to the LCIV Global Equity Quality Fund, from which the fund had agreed to divest. The funding level remained strong at 126% as at 31 March 2026.

Pension Administration Update

Sarah Hay, Strategic Pension Administration Lead, provided an update on pension administration services. The committee noted the continued strong performance of Hampshire Pension Services, the fund's administrators. Officers advised that the ongoing LGPS reorganisation was not expected to have an immediate impact on the pension administration service, with a meeting scheduled with Hampshire to ensure service continuity.

Pension Projects & Governance Update

Diana McDonnell-Pascoe, Pension Project and Governance Lead, reported on various projects. The committee received confirmation that the Pensions Dashboard Programme remained on track for its expected go-live in 2027.

Fund Financial Management

Phil Triggs presented the fund's principal risks and cashflow position. The committee noted the top five risks for the pension fund and the cashflow position, including actuals for the 12 months to 31 March 2026 and a three-year forecast. Members queried the cash balance held at custody, which had reduced to approximately £30.3 million, and officers confirmed discussions were underway with London CIV regarding its future management. Officers also agreed to provide a written explanation for the significant cash outflows recorded in March 2026.

LCIV Global Equity Quality Fund to Blackrock Transition Outcome

Officers confirmed the successful completion of the transition of global equity assets from the LCIV Global Equity Quality Fund to the BlackRock ACS World ESG Equity Tracker Fund. The final costs were materially lower than the central estimate, with favourable market movements and a well-structured trading approach contributing to the positive outcome.

Conflict of Interest Policy

Phil Triggs introduced the draft Conflict of Interest Policy, which was developed in response to changes outlined in the Pension Schemes Act 2026. The committee thanked officers for their work and approved the policy.