The Pension Board of Kingston upon Thames Council met on Wednesday 14 October 2026. The meeting included discussions on the performance of pension administration, ongoing projects, governance, and financial updates.

Pension Administration Performance Update

Tom Taylor, Head of Pensions Administration, provided an update on the performance of the Shared Pensions Service. He reported that outstanding processes had risen to 738, with 31.7% of these cases being overdue by more than 31 days. This increase was attributed to the annual year-end return exercise, the implementation of digital payslips, and a temporary suspension of transfer processing due to changes in SCAPE¹ rate factors. Despite these pressures, Taylor reassured the board that Priority One cases, specifically deaths and retirements, had been maintained at 100% SLA compliance throughout the period. He also confirmed that short-term staff sickness absence, which had impacted performance over the summer, had been resolved. Sam Burgess, Scheme Member Representative for Kingston Council, raised concerns about whether the team had sufficient resources to handle the anticipated increase in workload from the McCloud Remedy² and Access and Fairness³ projects. Taylor explained that the team structure, with dedicated benefits processing and data/systems teams, was designed to manage these peaks and troughs, and that internal SLA targets were not legal requirements.

Pension Administration Projects Update

Tom Taylor also presented an update on key projects. He confirmed that all 55 employers' annual data sets had been received on time and loaded onto the system. Annual benefit statements had been issued to 92.3% of active members and 100% of deferred members. A breach of law was reported concerning the McCloud Remedy, as the annual benefit statements issued were not fully compliant due to industry-wide software delays. Taylor explained that the decision was made to issue statements by the statutory deadline, accepting that they would need to be re-issued upon project completion. The McCloud Remedy project is in its final stages, with data collection, validation, and loading complete. The Fund is awaiting software releases, with a revised project completion date of 31 January 2027. The Access and Fairness reforms, aimed at addressing gender discrimination and removing age limits on death grants, are also progressing, with initial phases completed ahead of statutory deadlines. The project faces risks related to tracing historical beneficiaries. Councillor Mark Manners, a councillor for Kingston Gate and council representative on the board, inquired about the impact of these recalculations on the scheme's liabilities. Taylor stated that the McCloud Remedy was expected to have an immaterial impact due to assumptions already built into valuations, while Access and Fairness would also likely have an immaterial impact on the billion-pound pension fund.

Governance and Risk Update

Tom Taylor presented the Governance and Risk Update, highlighting that administration risks remained amber overall, with one red risk (Risk 21) concerning the software provider's failure to deliver compliant LGPS regulations software. This has directly impacted the ability to issue McCloud-compliant annual benefit statements. Amber risks included potential financial liability and resource strain from retrospective legislative changes (Risk 15), knowledge and skills of panel and board members (Risk 10), cyber security (Risk 3), climate change impact on assets (Risk 16), adverse market movements (Risk 4), and the implementation of Fit for the Future reforms (Risk 22). The report also noted that elected members became eligible for LGPS membership on an opt-in basis from 11 May 2026, with 11 councillors having opted in so far, having an immaterial impact on the fund. The contract for the pensions administration software is due for re-procurement, with the current contract expiring in August 2027.

Work Programme Update

Tom Taylor presented the proposed work programme for the Pension Board meetings for the 2026-27 municipal year. Key items included budget monitoring, audit findings, and updates on pension administration and governance. Training modules were discussed, with Pauline Lycett-Jones, a Scheme Member Representative, suggesting that modules should be dated and reviewed for saliency and navigation issues. Sam Burgess, Scheme Member Representative for Kingston Council, inquired about the possibility of hybrid in-person and online training sessions.

Annual Report and Statement of Accounts 2025-26

Katherine Gray, Head of Pensions Investments and Treasury, summarised the draft Annual Report and Statement of Accounts for 2025-26. The net assets of the fund increased to £1.41 billion, an increase of £116 million. The fund remained cash flow negative, with contributions lower than benefits paid out. Investment returns were 8.9%, exceeding the actuary's discount rate of 5.6%. The cost per member for administering the scheme continued to decline. Sam Burgess noted a discrepancy in the report stating the pension fund was cash flow positive on page 149 and requested it be investigated. Councillor Mark Manners inquired about plans to reverse the cash flow situation, to which Gray explained that as pension funds mature, they naturally become cash flow negative, and the focus is on managing this through investment strategy. Pauline Lycett-Jones suggested reorganising the investment background summary to start with UK market information, which Gray agreed to consider. Daniel Petey, Director of Finance and Deputy Section 151 Officer for Kingston, confirmed that the audit was on track for both the pension fund and the council, and that publishing the accounts in draft format was standard practice.

Update from the Pensions Panel Meeting

Katherine Gray provided an update on the investments related papers presented to the Pension Fund Panel in September 2026. The fund returned 7.6% over the quarter, outperforming its benchmark of 7.3%. Longer-term performance was also strong, though slightly behind the benchmark. The Panel was updated on the implementation of the Fit for the Future reforms, including the recruitment of a Senior LGPS Officer and an Independent Person for the fund. Sam Burgess raised concerns about the potential impact of a tech bubble bursting, given the 70% equity investment in the US, and the mitigations in place. Gray explained that diversification across asset classes and the reduction of equity weighting to 40% of the portfolio were key mitigations.

Urgent Items Authorised by the Chair

No urgent items were discussed, and the meeting closed at 11:04 am.