The Pension Fund Committee of Harrow Council met on Monday 22 June 2026 to discuss the fund's work plan, actuarial funding position, administration updates, investment vehicle performance, risk register, compliance with regulatory codes, and fund valuation and performance monitoring. Key decisions included noting the fund's estimated funding position of 100% as of 31 March 2026 and approving the work plan for the upcoming year.

Harrow Pension Fund Committee Work Plan 2026-2027

The committee reviewed the proposed work plan for the 2026-2027 municipal year. The plan outlines a schedule of quarterly meetings and key agenda items, with a focus on monitoring investment and risk, and agreeing updates to policies and strategies in line with the Fit for the Future reforms. A change was noted to the November meeting date, moving it to the 30th of November to allow sufficient time for report preparation following the end-of-September quarter end. The committee also discussed the need for robust minute-taking in future meetings.

Quarterly Actuarial Funding Position Update

The committee received an update on the estimated funding position of the Harrow Pension Fund as of 31 March 2026. The report indicated a funding level of 100%, a decrease from 108% at the 31 March 2025 valuation. This change was attributed to a reduction in the discount rate assumption from 5.6% to 5.3% and an increase in pension increase assumptions from 2.6% to 2.9%. While the assets increased to £1.15bn, the liabilities also rose to £1.15bn, resulting in a surplus of £0.00bn. The required return to achieve 100% funding increased to 5.3%, with the likelihood of achieving this return decreasing from 85% to 80%. The committee noted the report, acknowledging the estimated nature of the figures and the need for caution in their interpretation.

Pensions Administration Update with Key Performances

Yvette Saltas, Head of Payroll and Pensions, presented an update on the administration of the Pension Fund for the quarter ending 31 March 2026. The report detailed membership statistics, showing a slight increase in active members and pensioners. Key performance indicators (KPIs) for task completion were reviewed, with an overall completion rate within KPI targets of 72.95% for the quarter, an improvement from the previous quarter. The committee discussed areas where KPIs were not being met, and it was noted that a reorganisation of the pensions administration team was underway, with implementation planned for 1 July, aimed at improving resource allocation and performance. The report also highlighted legislative changes, including Access and Fairness legislation impacting survivor pensions and death grants, and the introduction of new rules allowing councillors to join the Local Government Pension Scheme (LGPS).

London Collective Investment Vehicle (LCIV) and Local Government Pension Scheme (LGPS) Update

This report provided an update on the Fit for the Future reforms and developments within the LGPS. Key deadlines were highlighted, including the appointment of an Independent Person and LGPS senior officer by 31 December 2026, and the production of an Investment Strategy, including local investment preferences, by 31 March 2027. The report also referenced the 2025 triennial valuation analysis for LGPS funds in England and Wales, noting a general strengthening of funding levels and a reduction in average employer contribution rates. Harrow's figures were presented as being in line with national trends, with a funding level of 108% in 2025 and a reduced employer contribution rate. The committee noted the report and the appendix detailing the LGPS valuation analysis.

Review of Pension Fund Risk Register

The committee reviewed the updated Pension Fund Risk Register for Q1 2026/27. Two new risks were added due to the Fit for the Future reforms: risk number five, concerning potential adverse financial consequences from the pooling of assets, and risk number thirteen, relating to the long-term investment strategy not being a good fit for the scheme's liabilities. Risk number five was assigned a D3 score (moderate impact, low likelihood), while risk number thirteen saw its rating increase from E2 to D2 (very low impact, low likelihood to moderate impact, low likelihood) due to the shift in responsibility for investment strategy implementation from Mercer to London CIV. The committee discussed the significance of these changes and the importance of ongoing monitoring.

The Pensions Regulator (TPR) Code of Practice Compliance Update

This report provided an update on the fund's compliance with the Pensions Regulator's (TPR) new General Code of Practice (GCOP), which came into effect in March 2024. An initial assessment in November 2025 identified areas of partial or non-compliance, particularly in Knowledge and Understanding, Risk Management, and Scheme Administration. Table 2 outlined specific actions required to achieve full compliance, including updating policies, conducting training, and refining risk management procedures. The goal is to achieve full compliance by the end of the 2026-27 municipal year. The committee was asked to review and comment on the progress made.

Fund Valuation and Performance Monitoring Report March 2026

The committee received a report on the Pension Fund's investment performance for the quarter ending 31 March 2026. The fund returned -3.0% net of fees over the quarter, underperforming its benchmark by 2.9%. The market value of investments decreased by £36.4m to £1.15bn. Over a 12-month period, the fund underperformed its benchmark by 5.1%, returning 8.7%. The report also noted a three-year underperformance against benchmarks. The asset allocation showed an underweight position in alternative assets, attributed to ongoing drawdowns from commitments to the LCIV Renewables Infrastructure Fund and distributions from the LaSalle Property Fund of Funds. The committee was asked to note and comment on the performance reports, including those from the independent advisor and Mercer.

Attendees:

• Councillor Norman Stevenson (Chair, Adults and Public Health Portfolio Holder)
• Councillor Ajay Agrawal
• Councillor John Baxter
• Councillor David Perry (Leader of the Labour Group)
• Varsha Patel (UNISON Observer)
• Funmi Nwagagbo (GMB Observer)
• Colin Robertson (Independent Adviser)
• Honorary Alderman Richard Romain (Independent Adviser)

Key Documents:

• Agenda frontsheet Monday 22 June 2026 Pension Fund Committee
• Public reports pack Monday 22 June 2026 Pension Fund Committee