The Pensions Committee of Islington Council met on 8 December 2025 to review the performance of the Pension Fund, discuss the 2025 actuarial valuation and its draft Funding Strategy Statement, and receive an update on the London CIV. Key decisions included noting the fund's performance, agreeing to proceed with employer consultation on the Funding Strategy Statement, and authorising officers to review and agree the London CIV's Articles of Association and Shareholders Agreement.

Pension Fund Performance - July to September 2025

The committee received a report detailing the performance of the Pension Fund for the period of July to September 2025. The report included a breakdown of fund manager performance, showing varied results across different asset classes. For instance, the LCIV Sustainable EQ- RBC Exclu fund returned 8.1% against a benchmark of 9.2%, while the Legal & General-Paris Aligned fund achieved 9.4% against a benchmark of 9.3%. Property investments showed mixed performance, with Aviva's UK property fund returning 0.5% against a benchmark of -1.4%, while Hearthstone's UK residential property fund experienced a significant -19.9% return against a benchmark of 1.7%. The overall combined fund performance for the quarter was 4.7%, slightly below the benchmark of 4.6%. The report also detailed the total fund position, showing a strategic allocation of 45% to equities and 20% to property, with current allocations of 51.3% and 16.3% respectively.

2025 Actuarial Valuation - Draft Funding Strategy Statement Consultation

The committee discussed the 2025 actuarial valuation and the draft Funding Strategy Statement (FSS). The Fund Actuary presented the initial whole fund results, indicating a positive overall position. Key actuarial assumptions were proposed, including a discount rate of CPI+2.8% for past service and CPI+2.25% for future service, with an assumed long-term inflation rate of 2.6% per annum. Life expectancy assumptions were also updated. The proposed funding strategy recommendations included reducing deficit recovery periods for ongoing employers by a maximum of three years, subject to a minimum of 12 years. A contribution sustainability reserve was to be maintained at the same level as the 2022 valuation. The committee agreed to the proposed funding strategy assumptions and parameters for employer consultation, which was scheduled to take place between December 2025 and January 2026. Officers were authorised to update the draft FSS for this consultation and to finalise it for committee sign-off in March 2026. The overall funding level for the whole fund was projected to be 112%, representing a surplus of £215 million, an improvement from the previous valuation.

London CIV Update

An update was provided on the London Collective Investment Vehicle (CIV), a pooled investment vehicle established by 33 London local authorities. The committee noted the October 2025 newsletter, which detailed progress on responsible investment discussions and the proposed model for service provision post-March 2026. A significant development reported was Buckinghamshire Pension Fund's official preference to join the London CIV as its pooling partner. The committee agreed to delegate authority to the Corporate Director of Resources and the Monitoring Officer to review and agree the London CIV's Articles of Association and Shareholders Agreement, in preparation for Buckinghamshire's inclusion. The financial implications of the CIV, including setup and running costs, were also outlined, with Islington having contributed £75,000 towards its establishment and an annual running cost of £25,000.

Pension Fund Forward Work Programme

The committee reviewed the forward work programme for 2025/26. Key agenda items for forthcoming meetings included the draft Funding Strategy Statement for consultation, the Investment Strategy Statement review, and updates on passive equity investment and the London CIV. The committee also discussed training requirements for members, noting the need for enhanced knowledge and skills in overseeing investments, governance, and administration, in line with proposed government changes. The existing training policy requires new members to undertake a three-day fundamental training course organised by the Local Government Association. The committee agreed to note the forward plan and make amendments as priorities changed, and to review training requirements.