The Pension Board of Westminster Council met on Monday 8th September 2025 to discuss the performance of the council's pension fund, updates on pension administration, and ongoing projects and governance. Key decisions included noting the fund's investment performance and risks, and approving the continuation of the McCloud project with a delayed publication of certain underpin calculations.

Update from the London CIV

The Board received an update from the London Collective Investment Vehicle (LCIV) regarding its business plan, staffing, and investment performance. Dean Bowden, CEO of London CIV, and Andrien Meyers, Chief Commercial Officer, presented on the organisation's history, its current strategic direction, and efforts to improve client relationships. The Board noted that staff turnover at LCIV is low, at approximately 5%, which is considered healthy within the industry. Discussions highlighted the LCIV's focus on client centricity and the importance of a positive organisational culture.

The Board was informed about the performance of two specific funds:

• Baillie Gifford Global Alpha Paris and Wine Fund: This fund, in which Westminster holds approximately £380 million, has experienced poor quarterly performance. The LCIV has conducted a review, and the fund is set to be downgraded. A move towards a multi-manager approach is planned, with a new strategy to be implemented by April 2026.
• Ruffer Absolute Return Fund: While this fund has shown strong recent quarterly performance, its long-term results have been less satisfactory. A strategic review is underway to determine its continued relevance, particularly as many Local Government Pension Scheme (LGPS) funds are now overfunded.

Concerns were raised by Mr Terry Neville OBE (Scheme Member Representative) regarding the continued holding of the Baillie Gifford fund, suggesting the LCIV should accept blame. However, Mr Phil Triggs, Tri-Borough Director of Treasury and Pensions, clarified that the decision to terminate a fund manager ultimately rests with the Westminster Pension Fund Committee, with recommendations from officers. He stated that officers had not recommended the termination of Baillie Gifford. Mr Triggs expressed his personal loss of faith in Baillie Gifford and indicated he would present a report to the next Pension Fund Committee outlining alternative approaches due to the fund's consistent underperformance since 2022.

The Board also discussed the potential implications of the government's aim to make asset pooling mandatory for the LGPS by March 2026. While the LCIV would become accountable for the funds, the Westminster Fund currently remains responsible for its own decisions. The LCIV expressed confidence in its preparedness for the increased assets and responsibilities that will arise from these reforms.

The Board resolved to note the presentation from the London CIV colleagues and agreed on several actions, including the LCIV circulating its purpose statement, providing information on credit funds, inviting Pension Board members to their AGM, and the Pension Board inviting the LCIV back for a follow-up discussion after the government's bill has been passed.

Pension Administration Update

The Board received an update on the performance of Hampshire Pension Services (HPS), which administers the council's pension fund. HPS reported 100% compliance with agreed Key Performance Indicators (KPIs) for the period March to July 2025, with the majority of cases completed within 15 days. The number of cases on hold has decreased from 349 at the end of February 2025 to 335 at the end of July 2025.

A significant focus has been on increasing member engagement with the member portal. The percentage of members signed up has risen to 53.07% as of July 2025, with a new target of 70% for active members. Efforts to encourage registration have included one-to-one sessions for Westminster City Council staff and outreach to other employers, including schools.

HPS received eight compliments during the reporting period, highlighting responsive, professional, and efficient service. One complaint was received concerning a member who had left employment in 2020 and was seeking a refund of contributions. The Fund advised the member that employer contributions are non-refundable, but a transfer to another scheme was possible, and that tax is payable on refunds due to the tax relief received on contributions.

The report also detailed the progress of the GMP reconciliation and rectification exercise, which resulted in five complaints proceeding to the formal Internal Dispute Resolution Procedure (IDRP).

Fund Valuation, End of Year Returns and Employer Benchmarking

The Board was updated on the end-of-year returns and fund valuation process. The triennial valuation data was submitted to the actuary on time in July. While most employers submitted their 2025 annual returns by the deadline, two academies within the Future Academies chain submitted late returns and were charged under the Pension Administration Strategy (PAS).

Employer benchmarking results showed a continued reduction in query numbers compared to previous years. However, the data quality scores for employers were mixed, with a decrease in the number of employers achieving a Green rating. The report highlighted that seven employers have failed data quality benchmarks for three consecutive years, and the Pension Committee supports the application of PAS fines in such cases. Westminster City Council itself received Green ratings for timeliness and financial control, but a Red rating for data quality.

LGPS Projects and Governance Update

The Board received an update on several ongoing projects and governance matters.

• McCloud Project: This project is back on track following a software update. However, where it has been impossible to calculate the underpin for certain member cohorts, the publication of these calculations will be delayed until the next annual benefit statement in August 2026. The Board was informed that this decision to delay was made in accordance with The Pension Regulator's guidance, which allows for discretion under specific conditions.
• Pension Dashboard Programme (PDP): Civica, the integrated service provider, is expected to connect to the pension dashboard by the end of September 2025. The Board noted that this connection date has been significantly delayed from the original October 2024 target.
• Pension Comms and Engagement: Efforts are underway to improve communication and engagement strategies, including the use of Eventbrite for event management, the development of a specific Pension Fund logo and branding for communications literature, and engagement with Westminster Adult Education Service (WAES) to develop a Roadshow for schools and other employers.
• Pension Governance and Compliance: A contract management framework, including software, is being set up for the Fund. Business Continuity exercises have been conducted with Hampshire Pension Services and Hampshire Integrated Business Centre.

Performance of the Council's Pension Fund

The Board reviewed the performance of the Pension Fund's investments up to 31 March 2025. The Fund returned -1.5% net of fees over the quarter, underperforming its benchmark by 0.2%. This underperformance was primarily attributed to the LCIV Global Alpha Growth Fund – Paris Aligned portfolio and the Fund's overweight equity exposure. Over one and three-year periods, the Fund delivered positive absolute returns but underperformed its benchmark.

The estimated funding level for the Westminster Pension Fund was reported as 181% at 31 March 2025.

The top five risks to the Pension Fund were highlighted:

1. Regulatory and Compliance Risk: Stemming from proposed reforms to the LGPS, including mandatory asset pooling, and the lack of ability for Funds to allocate listed equity between passive and active management.
2. Asset and Investment Risk: Driven by significant volatility and negative sentiment in global markets due to geopolitical and economic uncertainty.
3. Asset and Investment Risk: Related to London CIV's perceived inadequate resources to monitor investment strategy implementation and address underachieving fund managers.
4. Liability Risk: Arising from inflation being significantly higher than anticipated in actuarial assumptions.
5. Asset and Investment Risk: The risk of investment managers failing to achieve benchmark or outperform targets over the longer term.

The report also detailed the asset allocation of the Fund and noted changes over the quarter. The current target asset allocation is 55% in equities, 19% in fixed income, and the remainder in renewable infrastructure, infrastructure, property, and housing.

The value of Westminster Pension Fund investments directly managed by the London CIV as at 31 March 2025 was £947 million, representing 45% of the Fund's investment assets.