The Pension Fund Committee met to discuss upcoming legislative changes affecting the Local Government Pension Scheme (LGPS) and to review the fund's risk management and investment performance. Key decisions included noting the implications of new LGPS regulations and approving the administration and governance risk registers.

Fit for the Future Update

The committee received an update on significant legislative and regulatory changes impacting the LGPS, primarily stemming from the Pension Schemes Act 2026, which were due to come into effect on 30 June 2026. These changes, which have been under government consultation for approximately two years, aim to enhance fund governance and investment strategies.

Key requirements include:

• Assets under pooled management: Barnet Council has already entered into an investment management agreement with London CIV, meeting this requirement ahead of the 30 September 2026 deadline.
• Appointment of LGPS Senior Officer and Independent Person: These appointments must be made by 31 December 2026. The committee was informed that a plan for recruitment to these roles would be presented at the next meeting.
• Publication of Investment Strategy: The updated investment strategy, based on draft guidance, was approved at a previous meeting and is due to be published by 31 March 2027. Final guidance will be reviewed for any necessary amendments.
• Governance and Training Strategies: A training strategy was approved at the last meeting, and a knowledge and skills assessment will be circulated to members to inform future training plans. The governance strategy is yet to be developed.
• Independent Governance Reviews: These reviews are required within two years, with no immediate action needed.

Councillor Nick Mearing-Smith raised concerns about the increasing financial pressures on councils due to government legislation, suggesting that new regulatory requirements add complexity and cost without clear benefits. Tim Foucault, Head of Partner Fund Solutions at London CIV, explained that the regulations aim to balance the roles of the Section 151 officer and member interests, and that the council is seeking cost-effective solutions, such as assigning the new senior officer role to an existing member of staff rather than creating a new post. Guidance on the seniority and outsourcing possibilities for these roles is still awaited.

Risk Management Review

Mark Fox, Pensions Manager for London Borough of Barnet, presented the fund's updated administration and governance risk registers. The registers are reviewed quarterly and are being considered for merging into a single document for clarity.

Key administration risks identified include:

• Data quality and administration: Incomplete or inaccurate member data remains a material risk, actively managed by officers and West Yorkshire Pension Fund (WYPF).
• Cyber security and fraud: This is a high-impact risk due to the volume of sensitive data held, with tight controls in place by WYPF.
• Failure to collect contributions and financial failure of admitted bodies: These are typical risks for local government pension funds, with employers being chased for timely payments and reported to the Pensions Regulator if necessary.

The governance risk register, previously the non-admin risk register, has been comprehensively reviewed. The committee noted the updated registers and will receive further assurance on risk management.

Administration, Legislative and Exit Credit Updates

Mark Fox provided updates on administration performance, legislative developments, and an exit credit payment.

• Administration Performance: WYPF, the fund's administrator, is performing strongly, achieving over 95% of cases within target. Progress has been made on backlog cases, with historic leavers now completed. Data quality for common member information is above the Pensions Regulator's target, though scheme-specific data is being focused on for improvement, particularly in light of the upcoming Pension Dashboard.
• Membership and Funding: The fund has over 30,000 members and is considered a maturing fund, with more deferred and pensioner members than active members. Contributions received in 2025-26 were just under £73 million.
• Compensation Payments: A £1,000 compensation payment was made to Member D following a complaint upheld by the Pensions Ombudsman, relating to issues with the previous administrator.
• Legislative Updates: The normal minimum pension age will increase to 57 in April 2028. New regulations allow councillors and mayors to opt into the LGPS, with approximately 60% having done so. Wider reforms, including fair deal changes for outsourced staff, are also progressing.
• Audit Report: Auditors are aiming for a standard audit opinion for the 2025-26 accounts, focusing on complex investments, actuarial liabilities, and management override controls.
• Councillor Access to LGPS: New regulations allow councillors and mayors to opt into the LGPS, effective from 11 May 2026. Around 60% of councillors have opted in. Training and individual advice are being offered to members regarding their personal circumstances.
• Exit Credit Payment: The committee approved a recommendation for an exit credit payment to be made to an exiting employer, as detailed in an exempt appendix.

Pension Fund Investment Performance Report

The committee received a quarterly report on the fund's investment performance for the quarter ending 31 March 2026.

• Fund Value: The fund value was £1.86 billion, with a net negative return of -0.8% over the quarter, slightly underperforming the benchmark.
• Asset Allocation: The asset allocation table has been updated to reflect the investment strategy approved in March 2026.
• Investment Strategy Decisions: Decisions made regarding investment strategy for employers and the transition of a secure finance manager allocation have been completed. Proceeds from the secured finance manager transaction are expected by the end of June 2026 and will be reinvested by London CIV.
• Exempt Items: Discussions on private credit market developments and the London CIV pool monitoring report were held in the exempt session.

The committee noted the pension fund's investment performance and activities for the quarter.