The Pension Fund Committee of Barnet Council met on Monday 16 March 2026 to discuss a range of important financial and strategic matters concerning the pension fund. Key decisions included the approval of an updated training strategy and policy to enhance governance, and the noting of the 2024/25 annual accounts, which were issued with a disclaimer of opinion by the auditors due to ongoing data and opening balance issues. The committee also received an update on the Fit for the Future reforms impacting the Local Government Pension Scheme and approved the draft investment strategy statement.

Training Strategy and Policy Approved

The committee approved an updated Training Strategy and Policy, designed to strengthen governance and clarify training responsibilities for all stakeholders involved in the fund. This policy aligns with government reforms aimed at making training for committee members and officers a statutory obligation. Mandatory training will be required for all roles involved in fund governance, including committee members, local pension board members, officers, the senior LGPS member, and the independent advisor. Induction training must be completed within three to six months of appointment, with new members needing to start specific modules before attending their first meeting. An annual training needs analysis will support personalised training plans. Failure to complete mandatory training will result in an escalation route, potentially leading to removal from a role. The policy introduces an estimated annual cost of £4,400 for the Hymans Lola platform, funded by the pension fund. Authority was delegated to the Executive Director of Finance, and subsequently the Senior Local Government Pension Service Officer, to implement the policy, maintain training records, and report compliance annually.

Annual Accounts Issued with Disclaimer of Opinion

The committee noted the signed Annual Report and Accounts for 2024/25 and the contents of Grant Thornton's Audit Findings Report. The auditors, Grant Thornton, issued a disclaimer of opinion on the accounts for two primary reasons: an inability to form an opinion on the opening balances due to previous years' audits being substantially incomplete, and an inability to conclude work on membership data relating to the 2022 triennial valuation before the backstop date. Grant Thornton also noted that employer contributions are not sufficiently classified between normal and deficit contributions, and management is working with administrators to rectify this. The auditors' report highlighted that the pension fund's net assets increased by £74.2 million to £1.7 billion during the year. Management is taking steps to address the identified issues, with the aim of moving away from a disclaimer of opinion in future years.

Fit for the Future Reforms and Asset Transition

An update was provided on the Fit for the Future reforms, which are progressing through Parliament. A key legislative change is the deadline for all assets to be transitioned to the pool by 31 March 2026. The London CIV pool has been working with partner funds, including Barnet Pension Fund, to ensure compliance. The report highlighted that a core Intermediary Management Agreement (IMA) document has been negotiated and finalised with all 33 partner funds. However, for the IMA to be signed, each partner fund must complete four schedules: client information, investment strategy, fees, and asset holdings at the point of transition. Once signed, oversight control will transfer to the London CIV, which will assume investment responsibility. The committee retains a role in setting the strategic direction of the pension fund, with the implementation of the investment strategy transferring to the London CIV. The report also noted the upcoming requirements for the appointment of a Senior LGPS Officer and an Independent Person by 30 September 2026.

Exit Credit Payment Approved

The committee approved a recommendation for an exit credit payment to be made to an exiting employer, NSL Limited, as set out in Appendix B of the report. This decision followed an actuarial cessation evaluation which calculated an exit credit. The payment is subject to the fund's discretion and aligns with the new cessation policy approved at the previous committee meeting. The decision avoids transferring risk to other employers and takes into account representations from the exiting employer as required by LGPS regulations.

Investment Performance Report Noted

The Pension Fund's investment performance for the quarter ending 31 December 2025 was noted. The fund's assets were valued at £1.86 billion, showing an increase of 3.1% over the quarter. The portfolio outperformed its benchmark by 2.7%. The report detailed the performance of various asset classes and managers, noting that while the portfolio has generated positive long-term returns, it has lagged behind the strategic benchmark over certain longer-term periods. The committee also reviewed the progress on implementing recent investment strategy decisions, including changes to asset allocation and commitments to private markets.

2025 Triennial Valuation and Funding Strategy Statement Approved

The committee noted the final results of the 2025 Triennial Valuation, which confirmed the fund's financial position as of 31 March 2025. The valuation showed a significant improvement in the funding level to 130%, from 95% at the 2022 valuation, primarily due to higher assumed future investment returns. This improvement has led to a reduction in average employer contribution rates for the next three years, from approximately 28% to 18-19%. The committee also approved the updated Funding Strategy Statement (FSS) for the period 1 April 2026 to 31 March 2029. The FSS sets out the fund's approach to meeting pension liabilities and has been updated to include new reporting requirements on the gender pensions gap.

Updated Investment Strategy Statement Approved

The committee approved the updated draft Investment Strategy Statement (ISS) for Barnet Pension Fund, following the 2025 Investment Strategy Review. This updated ISS aligns with draft regulations requiring explicit high-level investment objectives, pooling-aligned strategic allocations with tolerance ranges, the fund's approach to local investment, and its approach to responsible investment. A key change includes a 4% increase in index-linked gilts, which is a new allocation intended to be in place by the end of the financial year. The ISS also defines local investment as within the geographical area of the pool, including Barnet, with a long-term target range of 3% of total fund assets. Authority was delegated to the Executive Director of Resources to finalise the ISS following consultation and publish it on the pension fund website.

Pension Fund Committee Work Programme

The committee noted the Pension Fund Committee Work Programme for June 2026 – May 2027, which outlines planned reports and discussions for future meetings, including administration reports, investment updates from London CIV, risk register reviews, and updates on Fit for the Future reforms.

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