The Joint Pensions Committee meeting scheduled for 10 March 2026 was set to discuss the outcome of the 2025 Pension Fund Valuation, the council's approach to Responsible Investment, and the Pension Fund Budget for 2026-2029. The committee was also scheduled to review quarterly investment performance and receive updates on general pensions matters, including the Fit for the Future regulations and the pooling of assets with London CIV.

Pension Fund Valuation

A key item on the agenda was the report by the Director of Finance on the outcome of the 2025 Pension Fund Valuation (Item 4: Pension Fund Valuation - Paper No. 26-92). This statutory triennial valuation assesses the financial health of the Pension Fund. The report was expected to summarise the financial position, including the funding level, asset value, and liabilities, with the aim of determining employer contribution rates from April 2026. The valuation results indicated a surplus of £0.50 billion, with a funding level of 121%, an improvement from the 2022 valuation. The report recommended agreeing to new contribution rates from April 2026, setting the deficit recovery period at 6 years for employers in deficit, and noting the revised Funding Strategy Statement.

Responsible Investment Policy

The committee was scheduled to consider the council's approach to Responsible Investment (RI) in a report by the Executive Director of Finance (Item 5: Responsible Investment Policy - Paper No. 26-93). This report was prepared in response to deputation requests concerning ethical divestment, particularly in relation to companies linked to violations of international law. The report considered legal advice regarding the Fund's investment powers, emphasising the primacy of financial return and prudent risk management, while acknowledging the constrained use of non-financial factors. It proposed a risk-based, evidence-led approach to any exclusions or reallocations, alongside a consultation process. The report recommended agreeing to the officer work programme and timelines, and authorising the Director of Financial Services to issue a joint letter to London CIV and conduct an exposure-mapping exercise across all holdings.

Pension Fund Budget

The Pension Fund Cash Budget for 2025-2029 was presented by the Director of Finance (Item 6: Pension Fund Budget - Paper No. 26-94). This report aimed to summarise Pension Fund income and expenditure for 2025/26, compare it to the approved budget, and set a budget for 2026/27 based on valuation outcomes and market information. The recommendations included noting the estimated outturn for 2025/26, approving the budget for 2026/27, and noting the projected budget for 2027/28 and 2028/29 for medium-term cash flow planning. The budget indicated a projected increase in the net cash outflow from dealings with members, necessitating reliance on investment returns to fund benefit payments.

General Pensions Matters

Updates on various general pensions matters were provided by the Executive Director of Finance (Item 7: General Pensions Matters - Paper No. 26-95). This included information on the Fit for the Future regulations, which mandate the transfer of all investment assets to pooled vehicles by 31 March 2026, and the progress on the Investment Management Agreement with London CIV. The report also detailed the temporary suspension of dealing in the Schroders Capital UK Real Estate Fund (SCREF) due to redemption pressures, and the subsequent announcement of a merger between Schroders and Nuveen. Additionally, the report outlined proposals for implementing the revised Strategic Asset Allocation, including an allocation to index-linked gilts and the designation of certain investments as Private Equity.

Quarterly Investment Performance

The committee was presented with a summary of the Pension Fund's investment performance for the quarter ending 31 December 2025 (Item 8: Quarterly Investment Performance - Paper No. 26-96). The report provided comparisons of whole Fund performance against the LGPS peer group and the Fund's benchmark, as well as individual manager performance against their respective benchmarks. The overall Fund performance for the quarter was +1.6%, which was below the customised benchmark of +2.8%. However, longer-term performance over one and three years was noted as being in line with funding requirements. The report highlighted underperformance from some active equity managers and the commercial property manager, Schroders, whose fund was suspended. The report also detailed the Fund's asset allocation and cashflow management, noting that the current equity allocation was slightly above the permitted range and that cash balances were also outside the upper limit.

Deputation Request

A supplementary agenda item concerned a request for a deputation from UNISON and Wandsworth GMB (Item 5: Deputation Request). The deputation wished to speak on the Responsible Investment Policy, specifically regarding the involvement of trade union representatives in ethical disinvestment and steps taken since the December meeting. The committee was asked to determine whether to receive this deputation.