The Pension Fund Committee of Barnet Council met on Monday 15 September 2025 to discuss the administration performance, external audit, risk management, asset pooling, investment performance, responsible investment, and the triennial valuation of the pension fund. Key discussions included noting the administration performance report, noting the progress on the asset pooling transition plan, and noting the updated risk registers.

Administration Performance Report

The committee received an update on the administration performance of the West Yorkshire Pension Fund (WYPF), which manages the Barnet Pension Fund's administration. WYPF processed 1,670 cases in July, with 90% meeting Key Performance Indicator (KPI) targets. The number of complaints received by WYPF remained low. Compensation payments were offered to two members, Mrs H (£1,000) and Mrs L (£500), for delays and inconvenience. The annual benefit statements were issued to 98.6% of members by the 15th August deadline. The data improvement plan showed significant progress, with approximately 6,000 data items remaining to be updated out of an initial 28,500. WYPF is also preparing to release a new, more user-friendly member portal. Updates were also provided on the Fit for the Future consultation and changes to the LGPS in England and Wales.

External Audit and Accounts

Hassan Shirwani, Interim Pensions Finance Manager, presented the external audit update from Grant Thornton, the Pension Fund's appointed auditors for the 2024/25 financial year. The audit fieldwork was underway, with draft financial statements received on 30 June 2025. The auditors noted some delays in receiving workpapers due to concurrent audit cycles and the contribution overpayment issue. The audit team aimed to complete remaining testing by the end of September 2025, with the Audit Findings Report scheduled for presentation to the Governance, Audit, Risk Management and Standards Committee (GARMS) in November 2025. The report highlighted ongoing discussions with management regarding discrepancies in IT system implementation, management override of controls, and actuarial valuation data.

Local Pension Board – Annual Report

The committee noted the annual report of the Local Pension Board for 2024/25. The Board's Chair, Professor Geoffrey Alderman, highlighted the need to review the remuneration for Board members, given the increased responsibilities and training requirements. The Board had approved its annual report, terms of reference, and forward work plan for 2025/26. A key recommendation from the Board was to review the fee for attendance and training and amend the Member's allowance scheme accordingly. The report will be referred to the next meeting of Full Council.

Risk Management Review

Mark Fox, Pensions Manager, presented the updated administration and non-administration risk registers. Following feedback from the committee, a thorough review had been undertaken, leading to the removal of several previously identified risks. Updates on administration risks included a reduced risk score for ADM05 (Employer's failing to pay contributions) due to improved monitoring processes, and a retitling of ADM07 to reflect new knowledge and training requirements. For non-administration risks, INV01 (Signatory Lists) had its risk score reduced due to updated signatory lists, and INV02 (Redemption Protocols) was deleted as it is determined by Investment Managers. The committee noted the updated risk registers.

Knowledge and Understanding Governance

This report summarised the actions to be taken by the LBB Pensions Team to maintain records of training for the Pension Fund Committee and Local Pension Board. Following the government's Fit for the Future consultation, statutory alignment of knowledge and understanding requirements between Pension Committee members and Local Pension Board members will be introduced. This will necessitate defining how knowledge requirements will be met within a reasonable period from appointment and including this in the governance and training strategy. A training plan for the Committee will be developed and presented at the next meeting. The Hymans Robertson online training platform, LGPS Online Learning Academy (LOLA), remains available to committee members.

Update on Asset Pooling: Draft Transition Plan & Governance Requirements

Anisa Darr, Executive Director of Resources, provided an update on the implementation of the Fit for the Future proposals, following the government's Pension Investment Review. The report confirmed that all LGPS investments must be transferred to their respective pools by 31 March 2026. As of 30 June 2025, approximately 78% of the Fund's assets were under pooled arrangements, with the remaining 22% invested in off-pool assets. Officers are working with London CIV to ensure all assets are pooled by the deadline, with an Investment Management Agreement (IMA) potentially required for some indirect investments. The report also outlined key governance proposals, including the appointment of a senior LGPS officer, preparation of a governance and training strategy, appointment of an independent advisor, and conducting independent governance reviews. The committee was asked to note the progress on the transition plan and consider the key governance arrangements.

Pension Fund Investment Performance Report

The committee received an update on the Pension Fund's investment performance for the quarter ending 30 June 2025. The Fund's investment portfolio was valued at £1.75bn, with a net positive return of 3.2% over the quarter. Hymans Robertson's report indicated that while the Fund has delivered consistent positive returns long-term, it has underperformed against the strategic benchmark over some periods. The report detailed the asset allocation, noting a relative underweight position in income assets due to direct lending mandates winding down, with capital being redirected to the LCIV Private Debt II fund. Updates were provided on the transition of Barings High Yield to the LCIV MAC Fund, the commitment to the LCIV Private Debt II Fund, and the signing up to the LCIV Fee Negotiation and Monitoring Service. The committee also noted the extension of the Fiera Real Estate Opportunities Fund V investment by one year.

Responsible Investment Update

This report provided an update on the progress of responsible investment within the Barnet Pension Fund. The Fund's responsible investment strategy, developed in 2022 and agreed in January 2023, focuses on being a leading voice in Net Zero strategy discussions, setting ambitious and measurable targets, maintaining focus on risk and return, and aligning with wider Council targets. As of 30 June 2025, approximately £0.45bn (25% of fund assets) was invested in sustainability-focused investments. The government's Pension Investment Review confirmed that Administering Authorities remain responsible for setting high-level strategy objectives, including responsible investment aims, while asset pools implement these strategies. London CIV is developing models to assist Partner Funds in implementing these goals. Hymans Robertson provided a detailed update in a confidential appendix, suggesting next steps for discussion.

2025 Triennial Valuation

The committee was presented with information regarding the 2025 triennial valuation of the pension scheme, which assesses the funding position and determines employer contribution rates for the next three years. The valuation as of 31 March 2025 had commenced, and the committee would need to agree on the assumptions to be used in the calculations with the Scheme Actuary. The report included a draft Funding Strategy Statement (FSS) and a draft Academies Funding Policy for discussion. The initial funding results indicated a significant improvement in the funding position, with a surplus of £385 million and a funding level of 129%, largely driven by an increase in asset return expectations. The committee was asked to approve the draft FSS and the draft Academies Funding Policy.

Pension Fund Committee Work Programme

The committee reviewed its work programme for September 2025 to June 2026, which outlines the key items to be discussed at future meetings. These include regular updates on administration performance, investment strategy and manager appointments, risk register reviews, pooling updates, admission agreements, knowledge and understanding, and responsible investment.