The Lambeth Pensions Board met on Wednesday 15 April 2026 to discuss the fund's actuarial valuation results, governance review, and investment performance. Key outcomes included noting the significant improvement in the fund's funding level to 120%, a positive development from the previous valuation's deficit. The board also reviewed recommendations from an independent governance review, which will lead to structural changes and the appointment of a Senior LGPS Officer to enhance oversight and compliance with upcoming regulatory reforms.

Actuarial Valuation Results and Funding Strategy Statement

The Pensions Board received the results of the 2025 actuarial valuation, which showed a substantial improvement in the Lambeth Pension Fund's funding level. As of 31 March 2025, the fund stood at 120% funded, a significant increase from 96% at the previous valuation in 2022. This surplus of £297 million was attributed primarily to higher assumed future investment returns, with the discount rate increasing from 3.4% to 5.5% per annum.

Despite the improved funding level, the primary contribution rate for employers has increased slightly to 22.1% of pay, from 20.7%. However, due to the strong surplus, a negative secondary rate is being applied, meaning that most employers will see a reduction in their overall contribution rates by around 5% over the next three years. This approach aims to balance financial stability for employers with robust solvency for the fund. The Funding Strategy Statement, which outlines how the fund aims to meet its long-term obligations, was also noted.

Governance Review Outcome

An independent governance review of the Lambeth Pension Fund, conducted by Hymans Robertson, presented findings and recommendations aimed at ensuring compliance with best practice and preparing for forthcoming regulatory changes under the Fit for the Future programme. Key recommendations include:

• Appointment of a Senior LGPS Officer: By October 2026, a dedicated Senior LGPS Officer will be appointed, responsible for the fund's finance, governance, and administration. This role will operate at a senior leadership level and cannot be combined with the Section 151 Officer function.
• Restructuring the Pensions Function: To align with the new Senior LGPS Officer role, the pensions function will be restructured into a single, integrated team.
• Developing a Comprehensive Training Strategy: A new training strategy will replace the current policy, addressing enhanced knowledge and understanding requirements for committee members, board members, and the Senior LGPS Officer. This will include evidence of effective monitoring of training.
• Preparation for an Independent Person: By October 2026, an Independent Person will be appointed to the Pensions Committee. This role, similar to a non-executive director, will provide professional scrutiny and challenge on investment strategy, governance, and administration.
• Planning for Independent Governance Reviews: From 2028, the fund will be required to undergo an Independent Governance Review every three years, assessing various aspects of its operations.

Officers agreed to implement all recommendations, with a detailed plan to follow.

Investment Performance Report - Quarter 4 2025

The investment performance report for the quarter ending 31 December 2025 indicated that the fund's assets grew to approximately £1,972.8 million. However, the fund's performance slightly underperformed its benchmark, returning 2.1% against a benchmark of 3.0%. This underperformance was primarily attributed to the active Global Equity managers. Performance over the one-, three-, and five-year periods also fell short of their respective benchmarks.

The report highlighted that the fund's actual asset allocation was overweight in global equities, Multi-Asset Credit, cash, and emerging market equity, while underweight in property, private debt, private equity, and the Liability Driven Investment (LDI) portfolio. Rebalancing actions will be undertaken as part of the updated Investment Strategy.

The indicative funding level as at 30 September 2025 was estimated at 136%, a further increase from the 120% recorded at 31 March 2025. The finalisation of the 2025 actuarial valuation was noted as imminent.

General Update

The board received an update on several key areas:

• London CIV (LCIV): Assets under management by the LCIV were reported at approximately £21.1 billion, with total pooled assets reaching £37.5 billion. Estimated net fee savings for the quarter ending 31 December 2025 were £519,000. Work was ongoing to transition off-pool assets to the LCIV by the 1 April 2026 deadline, with Investment Management Agreements (IMAs) being finalised.
• Private Equity Funds: Following committee approval, allocations to Antler Funds, Schroders, and Future Planet Capital (FPC) were progressing, with documentation being finalised.
• Pension Fund Accounts 2024/25: It was reported with regret that the external auditors issued a disclaimed opinion on the 2024/25 accounts due to unsupported balances in assets and liabilities, a continuation of issues from the previous year. Efforts were underway with auditors and external support to rectify these for the 2025/26 accounts.
• Training: A list of suggested external training opportunities for board members was provided, with the LGPS Pooling Symposium in early May 2026 highlighted as particularly recommended.
• Resources: The team had experienced stretched resources, particularly in relation to reporting and accounts. Additional permanent resources had been agreed, and external expert input was being sought to enhance capacity and resilience.

Annual Accounts and Audit Plan

The board was informed about the timeline for the 2025/26 Lambeth Pension Fund accounts and audit. Mazars LLP, the external auditors, would provide their audit plan separately. The estimated audit fee for 2025/26 is anticipated to be significantly higher than the £112,000 reported for 2024/25. Preparatory work for the financial year-end was underway, with a detailed timetable outlining activities through to January 2027.

Investment Strategy Statement 2026

The board noted the updated Investment Strategy Statement (ISS), which incorporates changes due to recent legislative updates and the delegation of investment management to the London CIV. The updated ISS includes a commitment to a 2040 net zero target for climate change and outlines interim targets for Weighted Average Carbon Intensity (WACI). The full details of the updated ISS were contained within an exempt Part II report.

The meeting concluded with the exclusion of the press and public for the remainder of the session to discuss exempt information.