The Pension Board of Kensington and Chelsea Council met on Monday 13 July 2026 to review updates on pension administration, performance, and the implications of the Pensions Schemes Act 2026. The meeting also included discussions on the Fund's financial statements, investment performance, and a proposed update to the conflict of interest policy.

Pension Administration Update

Duncan Derbyshire, Pensions Manager, provided an update on the current state of pension administration. This included information on the new Altair licence, the application of the 3.8% pension increase in line with CPI, and the finalisation of employer contribution rates for 2026/27 to 2028/29 following the 2025 valuation. The report noted a late payment of April 2026 pension contributions by RBKC, which was attributed to a delay in the finance approval process. Measures have been put in place to prevent recurrence, and the matter has been recorded in the breaches register. Ongoing projects include the 2025/26 year-end updates for member records and annual benefit statements, work on the McCloud Judgement, and the implementation of i-Connect. Reforms related to 'Access & Fairness' and 'Fit for the Future' are also being reviewed, with new governance regulations coming into force on 30 June 2026. The report included a table of Key Performance Indicators (KPIs) for the RBKC Pension Team, showing a high percentage of tasks completed within target times.

Quarterly Performance Review

Phil Triggs, Tri-Borough Director of Treasury and Pensions, presented the Northern Trust quarterly performance review for the Fund as at 31 March 2026. The Fund's value had decreased by 1.63% to £2,024 million during the quarter. The report detailed the transition of active equity into a passive fund with BlackRock, completed by 31 March 2026, aimed at reducing concentration risk and broadening diversification. Performance figures for various fund managers were provided, including BlackRock, Adams Street, and CBRE. The report also highlighted the funding position, which had dropped to 164% from 175% at the previous valuation, with the discount rate falling from 5.3% to 4.8%. Peer group comparisons showed the Fund ranking first within the London CIV pool for both funding level and contribution rate.

Pensions Bill Update

This report outlined changes to the Local Government Pension Scheme (LGPS) pooling arrangements and governance arising from the Pensions Schemes Act 2026. The Act, which received Royal Assent on 29 April 2026, provides a statutory basis for strengthened LGPS pooling and governance. The report noted that the Pension Fund already operates within a robust governance framework, but enhancements will be required. The Investment Committee will retain responsibility for determining funding and investment strategy, with a greater focus on oversight and scrutiny, while investment implementation responsibilities will become increasingly concentrated within London CIV. The Fund will be required to establish and maintain several governance documents, including a Governance Strategy, Training Strategy, and Conflicts of Interest Policy. Priority actions identified include developing a Governance Strategy, updating the knowledge and skills policy into a Training Strategy, and developing a dedicated Pension Fund Conflicts of Interest Policy. Risks associated with these reforms were also detailed, including strategic alignment, governance and accountability, transition and implementation, regulatory compliance, skills and knowledge, local accountability, and the relationship with London CIV.

Conflict of Interest Policy

This report presented an updated Conflicts of Interest Policy for the Royal Borough of Kensington and Chelsea Pension Fund, designed to meet new statutory requirements under the Fit for the Future reforms and the Local Government Pension Scheme (Amendment) Regulations 2026. The policy applies to all individuals involved in the governance, management, and operation of the Fund, including Investment Committee members, Pension Board members, officers, advisers, and contractors. It defines actual, potential, and perceived conflicts and includes LGPS-specific examples. Key elements include strengthened arrangements for declaration and registration of interests, proportionate mitigation measures, and clear responsibilities for the Tri-Borough Director. The policy will be reviewed at least every three years and will be published on the Fund's website.

Draft Pension Fund Financial Statements 2025/26

This report presented the draft Financial Statements for the Pension Fund for the year ending 31 March 2026. The statements were prepared in accordance with the Code of Practice on Local Authority Accounting and are ready for submission to the external auditor. The report detailed the Fund's income and expenditure, including contributions from members and employers, benefits paid, and investment returns. It also provided an analysis of the Fund's assets and liabilities, including investment property valuations and financial instrument classifications. The report highlighted the Fund's strong funding position, with a surplus of £942 million as at 31 March 2026. It also noted contractual commitments for investment property acquisitions and temporary accommodation, as well as the implications of the Pension Schemes Act 2026 and the Access and Fairness reforms.

Judicial Review and Direct Property Update

These items were scheduled to be discussed in Part B of the meeting, with the press and public excluded due to the confidential nature of the information. The reports related to judicial review proceedings and an update on direct property investments.

Any Other Oral or Written Items That the Chairman Considers Urgent

This agenda item allowed for the discussion of any urgent matters not otherwise listed on the agenda.