The Pensions Committee of Hillingdon Council was scheduled to discuss the fund's administration report, investment strategy, and responsible investment policies. The meeting's agenda also included a review of the risk register and governance matters.

Administration Report

The committee was scheduled to receive an update on the administration of the Hillingdon Pension Fund, which is delivered in partnership with Hampshire Pension Service. The report was expected to detail performance against agreed Key Performance Indicators (KPIs), including Service Level Agreement (SLA) compliance, membership growth, and casework processing times. It was noted that as of 31 March 2026, there were 30,541 total members, with a slight reduction in active and deferred members since April 2025. All casework was reported as completed within SLAs, though 659 cases remained outstanding, with a significant backlog in interfunds and transfers. The report also highlighted progress on the McCloud remedy implementation, with most categories complete, and provided an update on the Pensions Dashboard Programme, indicating steady progress towards compliance.

Investment Strategy and Fund Manager Performance

A significant portion of the meeting was dedicated to the fund's investment strategy and the performance of its fund managers. The report pack included an update on the fund's funding position, which had decreased to 114% from 118% at the previous valuation, resulting in a reduced surplus of £190 million. The fund's assets had decreased to £1.56 billion, primarily due to market losses of £30 million. The overall fund return for the quarter ending 31 March 2026 was -1.4%, underperforming its benchmark by 1.5%.

Market conditions were described as volatile, influenced by geopolitical tensions, rising inflation, and a rotation from growth to value stocks. Specific asset classes like global equities experienced negative returns, with the Global Alpha Growth Paris Aligned Fund underperforming its benchmark due to concerns over AI disruption and geopolitical events. Conversely, the Absolute Return fund provided positive performance in a challenging quarter.

The committee was also scheduled to review the Investment Strategy Statement (ISS), which reflected draft 2025 guidance and the planned transition of all assets to the London CIV. This included adjustments to asset allocation, with an increased allocation to global equities and property, and a decrease in multi-asset credit and infrastructure.

Responsible Investment

The committee was set to review the Responsible Investment Policy and receive an update on fund managers' Environmental, Social, and Governance (ESG) activities. The report detailed proxy voting statistics for LGIM and London CIV managers, showing a commitment to active ownership through voting on shareholder resolutions. LGIM voted against proposed management resolutions on approximately 19% of occasions, while London CIV managers backed management resolutions on 79% of opportunities. The report also highlighted engagement activities by LGIM and the Local Authority Pension Fund Forum (LAPFF) on themes such as climate change adaptation, resilience, and employment rights. LAPFF's engagements included discussions with Sainsbury's, M&S, and Nestlé regarding supply chain resilience and climate risks, and with InterContinental Hotels Group (IHG) and Mitie Group regarding employment rights and preparedness for forthcoming changes under the UK Employment Rights Act.

Risk Register Report

The committee was scheduled to consider the Pension Fund Risk Register, which categorised risks as either open or closed. Seven risks remained open and actively managed, including cyber security, liquidity risks, failure of the pool in fund management, governance compliance, key officer risk, and employer administration information failures. The report noted an increase in the rating for Key Officer Risk due to uncertainty surrounding the Fit for the Future 2026 regulations and the appointment of a Senior Responsible Officer (SRO). Six risks were closed and managed as business as usual or tolerated, including those related to fund asset returns, investment strategy, manager underperformance, inflation, longevity, and outsourced administrator performance.

Governance

The committee was scheduled to review its workplan, governance updates, and the approval of various policy updates. This included noting the dates for future Pensions Committee meetings, the Committee Work Plan, and the Continuous Professional Development (CPD) update for committee members. The report highlighted that under the Fit for the Future reforms, training for Pension Committee members would become formalised, compulsory, and evidence-based. A training policy and implementation plan were to be developed, with a CPD log to be presented at each meeting from September 2026. The report also confirmed compliance with the General Code of Practice, with updates to the Cyber Policy and Equality, Diversity, and Inclusion (EDI) Policy approved in December 2025.

The agenda also included items for private discussion, concerning restricted minutes from previous meetings and further details on investment strategy and governance.