The Pension Fund Committee of Westminster Council met on Tuesday 14 July 2026 to discuss a range of financial and administrative matters concerning the council's pension fund. Key topics included updates on pension administration and projects, financial management, investment strategy reviews, and the consideration of a conflict of interest policy.

Pension Administration Update

The committee was scheduled to receive an update on the administration of the pension fund by Hampshire Pension Services (HPS). The report covered the period from February to May 2026, detailing performance against service level agreements, case volumes, and member portal registration figures. It was noted that HPS continued to meet 100% of key performance indicators. The report also highlighted that no complaints were recorded during the period, with seven compliments received in April 2026, praising customer care and prompt responses. The Fund had received all annual returns for 2026 and officers were working with employers and payroll providers to resolve data queries. The Pensions Annual Meeting, held on 30 March 2026, was well-attended, and a similar event is planned for the following year to enhance member engagement.

Pension Projects and Governance Update

An update was scheduled on various projects and governance activities aimed at improving the administration of the City of Westminster Pension Fund (COWPF). The McCloud project remained on track for publishing underpin information for the 2026 Annual Benefit Statement, and the Pension Dashboard Programme was progressing towards its statutory deadline. The Pension Gaps Research Project was on track for publication and engagement in September 2026. A Power BI Dashboard had been developed to move from static reporting to a dynamic model for better data interrogation and governance. A draft Cyber Security Policy for the Fund had been created, requiring internal review before formal adoption. A coordinated Pensions Awareness Week campaign was being developed for September 2026 to improve member understanding and participation.

Fund Financial Management

The committee was to review the Pension Fund's risk register, which is divided into investment and pensions administration sections. The top five risks were highlighted, including significant volatility in global investment markets due to geopolitical events, potential underperformance by investment managers, and the impact of legislative reforms to the Local Government Pension Scheme (LGPS). The report also provided an update on the cashflow forecast for the Pension Fund's bank account and cash held at custody, indicating a stable position.

Quarterly Performance Report

This report was scheduled to present the performance of the Pension Fund's investments up to 31 March 2026. It detailed the total value of the Fund's invested assets, which stood at approximately £2.23 billion, a decrease from the previous quarter due to negative investment returns. The Fund delivered a negative absolute return of -2.95% on a net of fees basis over the quarter, underperforming its fixed weight benchmark. However, over the longer one-year and three-year periods, the Fund delivered positive absolute returns, though it underperformed its benchmark over these periods as well. The underperformance was primarily attributed to the LCIV Global Equity Quality Fund, from which the committee had previously agreed to disinvest. The report also provided an update on the Fund's funding level, which had reduced from 140% at 31 March 2025 to 126% at 31 March 2026, mainly due to a reassessment of liabilities and a reduced discount rate. An update on the London Collective Investment Vehicle (LCIV) was also included, detailing its assets under management and future plans.

Investment Strategy Review

This item was scheduled to present a comprehensive review of the current Investment Strategy Statement, assessing the asset allocation and liquidity position. It highlighted key considerations and presented three alternative strategic options for the Fund, following the results of the March 2025 actuarial valuation. These options ranged from a Risk On strategy focused on maximising long-term returns to a Liquidity and Inflation Protection Focus strategy, with a Cashflow Focus option offering a balance between return, risk, and income generation. The report noted that from 31 March 2026, investment implementation decisions would be managed by the London CIV, requiring the Fund to invest exclusively in LCIV products, with limited exceptions.

Private Markets Considerations

The committee was to consider the merits of the Fund's private markets investments, including allocations to infrastructure, private debt, housing, and renewables. The report highlighted the benefits of private markets for diversification, potential illiquidity premiums, inflation protection, and long-term income generation. However, it also noted challenges such as higher fees, complexity, reinvestment requirements, and illiquidity. Isio's overall view was that the Fund should maintain its existing level of private markets exposure rather than materially increase it, preserving flexibility. The report also discussed the increasing reliance on the LCIV for future private markets investments and recommended honouring existing drawdown commitments while moving future capital into LCIV's pooled funds.

LCIV Global Equity Quality Fund to Blackrock Transition Outcome

This paper was to provide an update on the outcome of the transition of global equity assets from the LCIV Morgan Stanley Global Equity Quality Fund to BlackRock's ACS World ESG Equity Tracker Fund. The transition involved an in-specie transfer of assets and subsequent restructuring. The report indicated that the total costs of the transition were significantly lower than initially estimated, largely due to favourable market conditions and a positive Opportunity Cost .

Conflict of Interest Policy

The committee was presented with the Pension Fund's Conflict of Interest Policy for comment and approval. This policy is a requirement under the Pension Schemes Act 2026 and operates alongside the Council's existing governance framework. It outlines responsibilities for identifying, declaring, and managing actual, potential, or perceived conflicts of interest for all individuals involved in the Fund's governance, management, and operation. The policy details procedures for declaration and registration of interests, managing conflicts, and reporting breaches.