The Pensions Committee of Barking and Dagenham Council met on Thursday 26 March 2026 to discuss the council's investment strategy, actuarial valuation, and fund governance. Key decisions included approving the London CIV Investment Management Agreement and the Pension Administration Strategy, and noting the London CIV's response on responsible investment.

Investment Strategy

The committee discussed the proposed Strategic Asset Allocation (SAA) for the Pension Fund, which has been developed by the London CIV. Following the latest actuarial valuation, which showed an improved funding position, the strategy aims to reduce risk by decreasing the allocation to Listed Equities from 60% to 48% and increasing the allocation to UK Government Bonds from 3% to 10%. An allocation to Multi Asset Credit is also being introduced. The proposed SAA forecasts a return of 6.5% per annum, with an 8% reduction in Value at Risk compared to the current SAA. The committee agreed to proceed with these changes and to commission the London CIV to prepare an updated Investment Strategy Statement, which will be consulted on and reported back to the committee in June.

Actuarial Valuation

Nick Vickers, Interim Head of Pensions, Treasury and Capital, presented the 2025 actuarial valuation report and the revised Funding Strategy Statement. The valuation, carried out by Barnett Waddingham, showed an improved funding position for the Fund, with the funding level increasing from 101% to 108% as at 31 March 2025. This has resulted in a reduction in the employer contribution primary rate from 18.1% to 21.5% of payroll. For the largest employer, the London Borough of Barking and Dagenham, the employer contribution rate will reduce from 22% to 18% from 1 April 2026. The committee noted the actuary's final report and approved the Funding Strategy Statement.

Pension Fund Accounts Update and Annual Report 2024/25

The committee received an update on the Pension Fund accounts for 2024/25. Grant Thornton, the council's external auditors, issued disclaimed opinions on the financial statements for 2023/24 and 2024/25 due to issues with member data reconciliation and the inability to obtain assurance over opening balances from the prior year's disclaimed audit. Despite these challenges, the auditors noted that significant progress had been made in auditing the current year's transactions and closing balances, which could pave the way for a proper audit opinion in 2025/26. The committee noted the update on the accounts and agreed to the Pension Fund Annual Report 2024/25.

Fund Governance

The committee addressed several governance issues. They approved the London CIV Investment Management Agreement, which is necessary to comply with the Fit for the Future legislation requiring all assets to be managed through the chosen pool by 31 March 2026. This agreement will involve additional costs of approximately £194,465 per year. The committee also noted the London CIV's response to a letter regarding responsible investment, which outlined their RI Matrix approach and welcomed early engagement on Barking and Dagenham's consideration of a Human Rights overlay. Finally, the committee approved a revised Pensions Administration Strategy, which had not been reviewed for several years.

Investment Managers' Performance

The quarterly monitoring report for Q3 (1 October to 31 December 2025) showed that the Fund returned +1.81% during the quarter, underperforming its benchmark of 2.53%. However, over the 12 months to 31 December 2025, the Fund returned +11.9%, outperforming its benchmark of 11.58%. There were contrasting fortunes for the active global equity managers, with Kempen performing strongly over the 12-month period, while Baillie Gifford performed poorly in the quarter and over the 12-month period. The London CIV is reviewing next steps regarding Baillie Gifford's performance.

Investment Strategy and Asset Allocation

The committee agreed to the new Strategic Asset Allocation (SAA) and tolerance ranges. Key changes include a reduction in Listed Equities from 60% to 48% and an increase in UK Government Bonds from 3% to 10%. An allocation to Multi Asset Credit is also being introduced. The proposed SAA forecasts a return of 6.5% per annum, with an 8% reduction in Value at Risk. The committee agreed to proceed with these changes and to commission the London CIV to prepare an updated Investment Strategy Statement.

Other Matters

Apologies were received from Councillor Mia and Councillor Lumsden. No declarations of interest were made. The minutes of the previous meeting held on 17 December 2025 were confirmed as a correct record. The meeting concluded with the Chair thanking members and officers, and noting that it was the last meeting before the local elections in May. Councillor Tony Dempsey was paid tribute for his service to the committee.