The Pension Fund Committee of Hammersmith and Fulham Council met on Wednesday 24 June 2026 to discuss the implications of the Pensions Schemes Act 2026 and receive an update from the London Collective Investment Vehicle (LCIV). The committee also reviewed the fund's investment strategy, performance indicators, and responsible investment policies.

Pensions Act 2026 and Update from LCIV

The committee received an update on the significant changes arising from the Pensions Schemes Act 2026, which strengthens LGPS pooling and governance arrangements. Sean Cogley, Pension Fund Manager, explained that the Act mandates participation in approved LGPS asset pools, with the London CIV being the designated pool for Hammersmith and Fulham. This reform aims to improve consistency, accountability, and governance standards across the LGPS by separating strategic decision-making by administering authorities from operational investment implementation by asset pools.

Adrian Mayers, Chief Commercial Officer at the London CIV, and Charlie Sheridan, dedicated client relations manager for Hammersmith and Fulham, presented an overview of the London CIV's role. They highlighted that the London CIV is owned by its partner funds and aims to manage assets at scale with stronger governance and lower fees. The presentation detailed how the London CIV had collaborated with its 33 partner funds to develop a Fit for the Future plan, which was approved by the government. This plan addresses five key criteria, including taking primary strategic asset allocation advice from the pool, investment transition and implementation, governance, and local investment.

A key discussion point was the requirement for local investments. While the Pension Schemes Act 2026 mandates an allocation to local investments, the precise definition and implementation are still subject to government guidance. The London CIV is working with partner funds to develop a collaborative approach, with housing and infrastructure identified as key priorities.

The committee also discussed the London CIV's approach to responsible investment, noting that while partner funds set their own RI strategies, the pool is responsible for implementation. A proposed RI Matrix, developed with partner funds, aims to balance differing local priorities with government expectations.

Key Performance Indicators

Eleanor Dennis, Head of Pensions, presented the Key Performance Indicators (KPIs) for the period January to March 2026. She reported that the Local Pension Partnership Administration (LPPA) had processed a lower number of cases in Quarter 4 compared to previous quarters, but performance across all case types remained above the 95% target. Retirements and bereavements saw slight dips in performance but remained strong. However, there were ongoing issues regarding the quality of processing from the bereavement team. Dennis also informed the committee of a recent decision by HM Treasury to change factors used in calculating pension benefits, which would necessitate a temporary suspension of processing for early retirements and transfers out until the software could be updated.

Pension Administration Update

Eleanor Dennis also provided an update on pension administration activities. She noted a decrease in calls to the LPPA helpdesk, but an increase in average wait times and abandonment rates, which LPPA is monitoring closely. Member engagement surveys for those retiring showed satisfaction, but dissatisfaction was higher among deferred members. The annual overseas pensioner exercise had been delayed until July due to resource constraints. Complaints continued to fall, though the Pension Ombudsman had seen a significant increase in complaints nationally. Dennis also highlighted the need for legacy data maintenance costs, requesting committee agreement for an additional £1,271 to move pre-2015 payroll and HR data to a secure universe.

Pension Administration Budget

The committee was presented with the 2026/2027 budget proposal for pension administration services provided by LPPA. The estimated expenditure for the next scheme year was £621,400 (excluding VAT), with an additional £20,000 contingency recommended. Discussions on the exempt appendices detailing these costs were deferred to the closed session.

Conflict of Interest Policy

Eleanor Dennis introduced the draft conflict of interest policy, which is now mandatory for all LGPS funds. The policy has been developed in collaboration with consultants and officers to ensure compliance with the Fit for the Future initiatives. Further clarification on the policy's content is expected from the government. Discussions on the exempt appendix were deferred to the closed session.

Draft Pension Fund Statement of Accounts 2025/26

Siân Cogley, Pension Fund Manager, presented the draft Pension Fund Statement of Accounts for the year ended 31 March 2026. The report indicated an increase in the Pension Fund's net assets by £49 million, primarily due to strong investment returns. Investment management expenses remained stable. The committee was asked to approve the draft accounts and delegate the approval of the final version to the Director of Treasury and Pensions in consultation with the Chair.

Investment Strategy Review: Step 2 - Strategic Asset Allocation

This report reviewed the Fund's strategic asset allocation, liquidity position, funding status, and future investment options. Andrew Singh from Isio Investment Advisory presented the findings, noting the Fund's strong funding position (113% funded with a £161 million surplus as at March 2025). Three alternative strategies were proposed, with Option 3, focusing on higher diversification, recommended. Key themes included managing inflation risk, increasing income generation, diversifying growth drivers, and aligning with LCIV pooling requirements. Discussions covered the performance of equities, the rationale for divesting from the LCIV Morgan Stanley Global Equity Quality Fund, and the implications of the cashflow deficit. The committee decided to defer a decision on the specific strategic asset allocation to a future meeting to allow for further consideration and consultation with independent advisors.

Responsible Investment Policy

The committee discussed the implications of the Fit for the Future reforms on responsible investment. Sean Cogley explained that while administering authorities retain responsibility for setting RI strategies, implementation will shift to asset pools like the London CIV. The committee reviewed the current classification framework for conflict and defence-related investments, noting an increase in the estimated exposure to defence-related investments to 3.9% of total Fund assets as at 31 March 2026. The committee noted the report and delegated authority to officers to incorporate their views into proposed amendments to the Responsible Investment Statement.

Draft Local Investment Policy

Sean Cogley presented the draft Local Investment Policy, which outlines the Fund's approach to local investment within the context of its primary objective of securing long-term pension payments. The policy defines local investment as delivering measurable economic benefit within the UK, with a strategic target range of 5% to 10% of total Fund assets. The committee discussed the importance of ensuring local investments deliver appropriate risk-adjusted returns and agreed to approve the policy, delegating final approval of any amendments to the Director of Treasury and Pensions in consultation with the Chair.

Pension Fund Quarterly Update Q1 2026

Siân Cogley presented the quarterly update for the period ending 31 March 2026. The report indicated that the Fund's market value decreased by £34 million to £1.457 billion over the quarter, with an overall underperformance against its benchmark. The committee noted the report, including the completion of the transition from the LCIV Global Equity Quality Fund to passive equity funds managed by BlackRock and L&G. The report also detailed the Fund's cashflow position and a review of key risks on the risk register.

The meeting concluded with the exclusion of the public and press to discuss exempt items.