The Pensions Committee of Islington Council met on Tuesday 21 July 2026 to review the performance of the Pension Fund, discuss investment strategy updates, and consider the fund's financial statements. Key topics included the fund's performance from January to March 2026, updates on the London Collective Investment Vehicle (CIV), and the implementation of new governance regulations.

Pension Fund Performance (January - March 2026)

The committee was scheduled to review the performance of the Pension Fund for the first quarter of 2026. The report detailed the market value of the total fund, which stood at £2,181.8 million. It provided a breakdown of performance by individual fund managers across various asset classes, including equities, property, private debt, and infrastructure. The report noted that several managers, including LCIV RBC Sustainability Exclusion Fund and LCIV Newton Investment Management, had underperformed their respective benchmarks during the quarter. For instance, the LCIV Newton Global Equity Fund returned -6.1% against a benchmark of -1.1%. The report also highlighted the performance of specific asset classes, such as UK commercial property managed by Columbia Threadneedle Investments, which returned 0.2% against a benchmark of 0.7% for the quarter.

Investment Strategy Update and ISS Guidance Regulations

A significant portion of the meeting was dedicated to discussing the Investment Strategy Statement (ISS) and its alignment with new guidance from the Department for Levelling Up, Housing and Communities. The committee was asked to note the statutory ISS guidance issued on 29 June, which outlines requirements for preparing and maintaining an Investment Strategy Statement under the Local Government Pension Scheme (Pooling, Management and Investment of Funds) Regulations 2026. A presentation from Mercer, attached as an exempt appendix, was scheduled to cover asset allocation tolerance ranges, fund performance return objectives, and risk considerations. The committee was expected to consider and agree on these proposals to inform the updated ISS. Furthermore, the committee was to discuss proposed options for local investment themes, with a view to developing more detailed proposals for future consideration.

London CIV Update

The committee received an update on the progress of the London Collective Investment Vehicle (CIV). The report detailed the establishment of the London CIV as an FCA-regulated UK Authorised Contractual Scheme (ACS) and its progress in launching funds and managing portfolios. It noted that Islington is one of 33 London local authorities participating in the London CIV programme. The update included information on the development of the LCIV Core Global Equity Fund, designed as a multi-manager solution combining complementary investment styles. The committee was also informed about the timeline for agreeing and signing off the Investment Management Agreement (IMA) and its associated schedules, with a target completion date of 30 September. The June 2026 newsletter from London CIV was attached for information, highlighting progress on the Fit for the Future pooling initiative and the introduction of new services.

LGPS Fit for the Future - Statutory Governance Implementation Workplan

The committee was scheduled to review the workplan for implementing the new Fit for the Future reforms for the Local Government Pension Scheme (LGPS). This included noting the statutory Fund Governance Guidance issued on 29 June, which introduces a strengthened governance framework focusing on accountability, capability, and independent oversight. The guidance mandates enhanced knowledge and understanding requirements for all individuals involved in fund decision-making, the appointment of an LGPS Senior Officer, and the requirement for an Independent Person and periodic Independent Governance Reviews. The committee was asked to consider the proposed workplan, timelines, and responsible persons for implementing these new regulations.

Decarbonisation Policy Monitoring - Carbon Footprint Results and Review of Targets

The committee was to receive an update on the monitoring of the fund's decarbonisation policy, including the carbon footprint results for its equity and credit holdings. The report indicated that Mercer had conducted a carbon footprinting assessment, and the results, along with progress towards the fund's net-zero target by 2050, were detailed in an exempt appendix. The committee was asked to note the carbon footprint of public equities and credit, covering 58.3% of the total fund, and the fund's progress in reducing exposure to carbon-intensive companies since 2016. The report also highlighted the adoption of new metrics, such as Implied Temperature Rise and the percentage of the portfolio with Science Based Targets initiative (SBTi) targets, to align with the Paris Agreement's 1.5 degrees Celsius warming scenario.

Pension Fund - Draft 2025/26 Year-End Accounts

The committee was presented with the draft 2025/26 Pension Fund accounts for review and comment. The unaudited accounts showed an increase in net assets of £173 million to £2,211 million. Key highlights included an increase in both employer and employee contributions, an increase in pensions paid, and a rise in investment management fees, attributed to the increase in asset values. The report detailed the fund's income and expenditure, noting that the shortfall between income and expenditure did not necessitate the sale of investments due to investment income. The actuarial valuation as at 31 March 2025 indicated a surplus, with a funding level of 112% and a projected recovery period of 13 years for any deficits.

Pensions Committee 2026/27 Forward Work Programme

The committee was asked to note and agree amendments to the Forward Work Programme for the Pensions Committee for the period July 2026 to June 2027. The programme included standing items on performance reports and CIV updates at each meeting. A new item was added regarding the development of a training strategy for committee members, in line with new statutory governance guidance. The forward plan also outlined upcoming reports on topics such as the actuarial valuation, the Investment Strategy Statement, carbon monitoring, and the implementation of the Fit for the Future reforms.