The Pension Board of Croydon Council met on Thursday 13 November 2025 to discuss several key updates regarding the Local Government Pension Scheme (LGPS). The Board received updates on the Collective Investment Vehicle for London Local Authorities Pension Funds, the performance of the Croydon Pensions Administration Team, and the status of the Pension Fund's annual reports and financial statements. Significant discussions also took place regarding the initial results of the 2025 valuation and an update to the Funding Strategy Statement, alongside a review of the Fund's Risk Register and any breaches of the law.

The Collective Investment Vehicle for London Local Authorities Pension Funds: Update

The Board was updated on the ongoing developments within the Local Government Pension Scheme (LGPS) reform, specifically concerning the Fit for the future consultation and its impact on the London Collective Investment Vehicle (London CIV). The report detailed government decisions that require Local Authorities (AAs) to delegate investment strategy implementation to their pools and to take principal investment advice from their pool. Pools are to be established as FCA-authorised investment management companies, and all assets must be transferred to pool management. Proposals for local investment were also outlined, requiring AAs to set out their approach in their Investment Strategy Statement and work with strategic authorities to identify opportunities. Pools will be responsible for due diligence and investment decisions. Governance reforms include the appointment of a senior LGPS officer with delegated responsibility, the preparation of an administration strategy, and requirements for pension committee members and officers to have appropriate knowledge and understanding. AAs will also be required to participate in independent governance reviews. The report also detailed developments within the London CIV, including progress on Investment Management Agreements (IMAs) and advisory readiness. Challenges such as harmonising Responsible Investment policies and developing a coherent local investment strategy were acknowledged. The London CIV is focusing on pooling talent as well as assets, and balancing convergence with local identity. Mercer has been appointed to support the SAA Advice provision for Partner Funds, with the service expected to be operational by January 2026. The report also noted Buckinghamshire Pension Fund's decision to join the London CIV following the dissolution of Brunel Pension Partnership. Parliamentary procedures concerning the Pensions Scheme Bill were also mentioned. Fund preparations include the transfer of UK Property Funds from Schroders to CBRE, and the development of a matrix to match the Responsible Investment (RI) approaches of Partner Funds. The Board was invited to note the report.

Croydon Pensions Administration Team Key Performance Indicators and Pensions Dashboard Reporting for the Period June to August 2025

The Board received an update on the Key Performance Indicators (KPIs) for the Croydon Pensions Administration Team for the period June to August 2025. The report indicated that the team had generally met their targets for most indicators, with a few exceptions. Deferred benefit calculations were noted as falling below expected levels, although there had been a significant decrease in the average number of days to process these. The team had conducted Blitz days to target cases in preparation for the Triennial Valuation and the McCloud remedy. Annual Benefit Statements (ABS) were generated and released on the online portal before the statutory deadline, with a significant increase in the production of deferred benefit ABS compared to the previous year. Plans are in place to further reduce the number of deferred benefit ABS not produced next year. Records in scope for the McCloud remedy were prepared for the ABS, with data cleansing completed. The team had exercised discretion to delay the publishing of McCloud remedy service information for certain members. Initial errors on the Triennial Valuation report had been cleared and data sent to Hymans Robertson. The new Member self-service portal, active since October 2024, had seen a steady rise in registrations, with a notable increase of 3,548 members following the ABS release. The report also introduced a new section on the Pensions Dashboard, with figures expected once the Dashboard goes live to the public. User acceptance testing of the Integrated Service Provider (ISP) for the Dashboard had been completed, and the team had connected to the ISP on 31 October 2025. The Dashboard data is updated overnight. The Board was asked to note the KPIs and performance against them.

Update on Pension Fund Annual Report and Financial Statements for years 2019/20 to 2023/24 and Annual Report and Financial Statements for 2024/25

The Board was advised of the updated position regarding the Fund's audited accounts for the years 2019/20 to 2023/24 and the draft Annual Report and Financial Statements for 2024/25. The report detailed the ongoing issues with the auditing of accounts for several years, with disclaimers of opinion issued for 2020/21, 2021/22, 2022/23, and 2023/24 due to insufficient audit evidence. The 2019/20 accounts had been published with an unqualified opinion. For the 2024/25 financial year, the draft accounts were published on 31 July 2025, and the draft annual report and financial statements were presented to the Pension Committee on 16 September 2025. The external auditors presented their plan, indicating that this would be the first full audit since 2019/20, and an unqualified opinion would not be possible for the 2024/25 accounts. Significant risk areas identified for the audit include management override of controls, valuation of Level 3 Investments, and the actuarial present value of promised retirement benefits. The audit was scheduled to begin in January 2026, with sign-off targeted for late February 2026. The Board was asked to note the updated position on the audited accounts and the draft annual report and financial statements.

Croydon Pension Fund -2025 Valuation Initial Results and Funding Strategy Statement Update

The Board received an update on the progress of the triennial valuation effective 31 March 2025. The draft Funding Strategy Statement (FSS) had been approved by the Pension Committee on 16 September 2025 and would be issued to participating employers for consultation alongside their individual valuation results. Initial results for the whole Fund indicated a significant improvement in the funding position, with the funding level rising from 97% at the 2022 valuation to 132% as at 31 March 2025. This improvement was attributed to changes in the economic environment, including an increase in interest rates and higher inflation, which have impacted the valuation of liabilities and expected future investment returns. The report detailed proposed changes to the actuarial assumptions, including an increase in the prudence level for the discount rate from 75% to 80% to reflect market uncertainty. The discount rate assumption for the ongoing participation basis was set at 5.9% pa, leading to an estimated funding level of 134% for the whole Fund. The report also outlined proposed contribution rates for Croydon Council, with a recommended immediate reduction from 23.2% to 20.2% of pay per annum. The outlook for other employer contributions was also discussed, with expectations of improvements and downward pressure on rates for the majority of employers, while caution would be applied in recognising these improvements. The next steps for the valuation include calculating individual employer funding positions, setting contribution rates, and consulting with employers. The final FSS and valuation report are expected to be approved in March 2026, with new contribution rates coming into effect from 1 April 2026. The Board was asked to note the draft FSS, the initial valuation results, and the timetable for completion.

Review of Risk Register

The Board reviewed the current Risk Register for the Pension Fund, noting that no new risks had been added, no risks had been updated, and no risks had been removed since the last review. The report indicated that there were 15 risks on the main register, with 8 identified as significant risks (scoring 10 or higher). It was noted that with the implementation of planned future controls, the number of significant risks could be reduced to 3. The Board was invited to comment on the exhaustiveness of the list and the assessment of risks and controls.

Review of Breaches of the Law

The Board reviewed the Pension Fund Breaches of the Law Log Extract, which detailed 18 items. Since the last review, three new entries had been added concerning the August 2025 Annual Benefit Statements and delays in refund payments. One entry regarding the 2023/2024 accounts had been updated to reflect the audit opinions issued, and one entry concerning the August 2022 Annual Benefit Statements had been removed as it was over three years old. The report detailed specific breaches related to the failure to publish audited Fund Accounts for 2019/20, 2020/21, 2021/22, and 2022/23 by statutory deadlines, primarily due to issues with the Council's main accounts and the audit process. Updates indicated that the 2019/20 accounts had been signed off by the Council, and the Fund's accounts were expected to be published with a disclaimer of opinion. Similar delays and disclaimers were noted for subsequent years. Breaches related to refunds were attributed to difficulties in tracing members and regulatory timelines, with ongoing efforts to address these. The Board was asked to review and note the contents of the log extract.

Review of Representation Policy

The Board considered the reviewed Representation Policy, which aims to ensure compliance with the government's Fit for the Future proposals and The Pensions Regulator's guidance on Equality, Diversity, and Inclusion (EDI). The updated policy reflects the current composition of the Pension Committee and Pension Board, including changes such as designating the Staff Side Representative as a voting member of the Committee and introducing a Voting Non-Council Employer Representative. The policy acknowledges the absence of a representative for deferred benefit members due to tracking difficulties, and a vacancy for an employer representative on the Board, with efforts to address representation from admitted bodies. A recruitment process is underway for the independent Chair position. The Board was invited to comment on the revised policy.

Local Government Pension Scheme Advisory Board / The Pensions Regulator Update

The Board received an update on matters being considered by the Local Government Pension Scheme Advisory Board (SAB) and The Pensions Regulator (TPR). Key points included the SAB's response to CIPFA's Code of Practice on Local Authority Financial Reporting, its statements on fiduciary duty in relation to the situation in Gaza, and a report on diversity of representation within the LGPS. Updates were also provided on legal advice regarding pooling governance and conflicts of interest, and the LGPS Fit for the Future consultation. The Board was informed about the launch of a consultation on proposed changes to the LGPS Code of Transparency and the Government's response to the Fit for the Future consultation, which includes reforms to asset pooling and governance. The report also detailed the SAB's response to the Local Audit Reform Strategy, advocating for the separation of pension fund accounts from administering authority main accounts. Updates on the 2025 Actuarial Valuation process, the publication of the Scheme Annual Report, and revised guidance for preparing Funding Strategy Statements were also provided. The Board was recommended to note the contents of the report.

The meeting concluded with the exclusion of the press and public for discussions on cyber security and other exempt information.