The Pensions Committee of Cardiff Council was scheduled to meet on Monday 16 March 2026 to review and approve the 2026/27 Business Plans for the Wales Pension Partnership (WPP) and the WPP Investment Management Company (IMCo). The committee was also scheduled to review and approve the Funding Strategy Statement (FSS) for the Cardiff & Vale of Glamorgan Pension Fund.

Wales Pension Partnership and WPP Investment Management Company Business Plans 2026/27

The meeting was scheduled to consider the 2026/27 Business Plans for the Wales Pension Partnership (WPP) and its investment management arm, WPP Investment Management Company (IMCo). These plans had previously been presented to and approved by the WPP Joint Governance Committee (JGC).

The WPP Business Plan for 2026/27 outlines the partnership's operational plans, its governance structure, priorities, objectives, and financial budget. It notes a significant decrease in WPP's activity specifically with external advisors compared to previous years.

The WPP IMCo Business Plan details the company's strategic objectives, governance, financial summary, investment management approach, operations, staffing, risk management, and responsible investment strategy. IMCo, established in August 2025, is on track to obtain Financial Conduct Authority (FCA) authorisation by 31 March 2026 and will manage investment assets for eight Welsh Local Government Pension Scheme administering authorities, with combined assets exceeding £25 billion. The plan highlights that 2026/27 will be a year of transition and capacity building for IMCo, with a target of recruiting 24 employees by the end of the year, in addition to its six company directors. A more comprehensive five-year business plan is scheduled for production before April 2027.

The report pack also detailed the legal implications, including the Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016, the Council's public sector equality duties under the Equality Act 2010, and the requirements of the Well-Being of Future Generations (Wales) Act 2015. Financial implications noted that WPP costs are recharged as an eighth share to the Cardiff and Vale of Glamorgan Pension Fund, and IMCo costs will be charged through a combination of fixed fees and fees related to assets under management (AUM).

The committee was recommended to approve both the WPP Business Plan for 2026/27 and the WPP Investment Management Company Business Plan 2026-27.

Funding Strategy Statement (FSS) and 2025 Valuation Update

The committee was also scheduled to review and approve the Funding Strategy Statement (FSS) for the Cardiff & Vale of Glamorgan Pension Fund. The FSS outlines how the administering authority aims to meet its fiduciary duty to ensure funds are available to meet pension liabilities while keeping employer contributions as constant as possible.

The report highlighted that the 31 March 2025 actuarial valuation indicated a significant increase in the funding level to 111%, up from 98% in the 2022 valuation. The probability of funding success had also increased to 82%. Unlike the 2022 valuation, no additional short-term inflation allowance was included in the 2025 valuation. For employers in surplus, a buffer of at least 110% funding level is retained before any reduction in secondary contributions is calculated. The consistently high gilt yields over the past three years have resulted in a significant reduction in proposed contribution rates for orphan bodies, with nearly all having a 0% employer contribution rate for the three years starting April 2026.

The FSS itself is a technical document that details the processes by which the administering authority establishes a clear and transparent funding strategy, aims to maintain constant primary contribution rates, ensures solvency and long-term cost efficiency, and takes a prudent long-term view of funding liabilities. Appendices to the FSS include descriptions of key risks impacting the Fund, the process for employer exits, employer grouping, roles and responsibilities, and a glossary of terms.

The committee was recommended to note the progress with the 2025 Valuation and approve the attached Funding Strategy Statement.