The Pension Fund Committee met on 16 March 2026 to discuss the triennial valuation of the Harrow Pension Fund, the LGPS update, and the next steps for the Investment Strategy Statement. Key decisions included approving the draft Funding Strategy Statement and noting the triennial valuation report, which showed an improved funding position and reduced contribution rates for many employers.

Triennial Valuation 2025 Final Report

The committee received the final report on the 2025 triennial valuation of the Harrow Pension Fund. The valuation, conducted by Hymans Robertson LLP, assessed the fund's financial health as of 31 March 2025.

Key findings from the valuation include:

• Improved Funding Position: The fund's funding level has increased to 108%, up from 96% at the previous valuation in 2022. This improvement is primarily attributed to higher assumed future investment returns.
• Reduced Contribution Rates: As a result of the stronger funding position, employer contribution rates are set to decrease. The average employer contribution rate will fall from approximately 23% of pay to around 17.5% of pay for the period 1 April 2026 to 31 March 2029.
• Gender Pension Gap Reporting: The report included an analysis of the gender pension gap, which highlights disparities in pension benefits received by men and women. For active members, the gender pension gap was reported as 36%, with a 33% gap for CARE pensions and a 42% gap for Final Salary pensions. For pensioner members, the gap was 48%. The report noted that rectifying this gap is a long-term endeavour, largely linked to addressing the gender pay gap and evolving working patterns.

Decisions Made:

• The committee noted the actuary's final report on the valuation.
• The committee approved the Draft Funding Strategy Statement and associated policies. This statement outlines how the fund will ensure liabilities are met over the long term and includes policies on cessations, contribution reviews, and pass-through arrangements.

LCIV and LGPS Update

The committee received an update on developments within the Local Government Pension Scheme (LGPS) and the London Collective Investment Vehicle (LCIV).

Key points discussed:

• Pensions Schemes Bill: The bill, which aims to legislate for government-mandated pooling of LGPS assets, was nearing the final stages of scrutiny in the House of Lords. The government clarified its backstop powers which allow intervention in pools only in extreme circumstances to safeguard the scheme, and not to mandate specific investments.
• Investment Advice: Funds will be required to take their principal investment strategy advice from their asset pool company, with supplementary external advice permitted only in exceptional cases.
• LGPS: Access & Fairness Reforms: The government confirmed that reforms aimed at addressing inequalities, pension adequacy, and access barriers will proceed. These include equalising survivor benefits, removing the age-75 death grant cap, and changes to pensionability of unpaid leave. Mandatory reporting on the gender pension gap will also be implemented.
• Elected Member Access and MAT Consolidation: The government is prioritising reinstating LGPS access for elected members from the 2026-27 financial year. Further proposals regarding multi-academy trust (MAT) consolidation and the implementation of New Fair Deal for outsourced staff will be addressed in a future government response.

Decision Made:

• The committee noted the report and its appendix.

Investment Strategy Statement Next Steps

The committee was updated on the upcoming requirements for Investment Strategy Statements (ISS) under new government regulations, expected to come into force on 1 April 2026.

Key information:

• Revised ISS Deadline: Funds are required to publish a revised ISS by 30 September 2026.
• Content Requirements: The guidance outlines key content for ISSs, including financial objectives, responsible investment policies, local investment beliefs, and a strategic asset allocation. The government expects funds to map their existing asset classes to nine specified categories.
• Next Steps for Harrow Pension Fund:
  • A draft ISS will be presented to the committee in June 2026.
  • Following scrutiny, the draft ISS will be shared with employers and unions for consultation.
  • The final ISS will be presented for approval in September 2026.
  • A training session on setting an ISS will be held before the June meeting.

Decision Made:

• The committee noted the report and the next steps for the drafting and finalisation of the Investment Strategy Statement.

Buckinghamshire Pension Fund Admission to the LCIV

The committee discussed the proposal for Buckinghamshire Pension Fund to join the London Collective Investment Vehicle (LCIV).

Key points:

• Reason for Admission: Buckinghamshire Pension Fund, previously part of the Brunel pool, needed to find a new home following the government's consolidation of LGPS pools. They approached the LCIV after assessing various options.
• Financial Neutrality: Admitting Buckinghamshire Pension Fund is considered financially neutral to existing LCIV shareholders and aligns with the LCIV's long-term growth objectives.
• Shareholder Costs: Buckinghamshire will pay the same shareholder costs as existing members. While they are a larger fund, they will have an equal voice in shareholder committee matters.
• Set-up Costs: It was confirmed that Buckinghamshire Pension Fund will contribute £331,000 towards the set-up costs of joining the LCIV.

Decision Made:

• The committee noted the proposal, subject to clarification on the set-up costs. Authority was delegated to the Strategic Director of Finance to review and agree the necessary documentation.

Investment Manager Performance December 2025

The committee received a report on the portfolio valuation as of 31 December 2025. The report provided the latest valuation of the fund's assets. Further performance matters were to be discussed in Part II of the meeting.

Decision Made:

• The committee noted the report.

Other Discussions

During the meeting, there was a discussion regarding the gender pension gap, with councillors seeking to understand its implications and potential short-term actions. It was explained that while the gap is a long-term issue, efforts are being made to improve understanding and address it through future working patterns and policy changes.

There was also a discussion about the removal of the age-75 death grant cap within the LGPS. It was clarified that this change, backdated to April 2014, is a rare event and is not expected to have a significant financial impact on the fund, although it will have some impact and an administrative burden.

The committee also discussed the strategic asset allocation for the Investment Strategy Statement, with a particular focus on the government's requirement for funds to invest across nine specified asset classes. Concerns were raised about the clarity of the other categories and the need for active versus passive investment decisions to be clearly defined.

Finally, the committee noted that a report regarding the Buckinghamshire Pension Fund's admission to the LCIV was missing from the agenda pack, but the matter was discussed based on the information available and in Part II of the meeting. The report confirmed that Buckinghamshire would contribute £331,000 towards set-up costs.