The Pensions Committee of Lambeth Council met on Wednesday 25 March 2026 to review the performance of the Lambeth Pension Fund, discuss policy updates, and consider the fund's financial strategy. Key decisions included the approval of an updated Funding Strategy Statement and the noting of the Investment Strategy Statement.

Pensions Administration Performance Report (October - December 2025)

The committee received an update on the performance of the Lambeth Pensions Administration Service for the period October to December 2025. The total membership of the scheme cohort stood at 22,254 as of 31 December 2025. Key performance indicators showed that 1,821 cases were completed on the pensions software system (Altair) during the quarter, with 99.3% of cases completed within target times. Member engagement activities included monthly updates shared via Viva Engage and the Employee Hub, and retirement planning courses scheduled for employees. Employer engagement involved notifying academies of a Department for Education online session on the 2025 valuation. The 'Engage' self-service platform had 7,083 registered users, with ongoing efforts to encourage wider adoption. The report also detailed four breaches of the law reported during the quarter, all relating to the late submission of monthly contributions schedules and payments from three employers. These were subsequently closed. There was one complaint and two compliments received during the period. Two stage one appeals and one stage two appeal were processed under the Internal Dispute Resolution Procedure. The opt-out rate analysis showed higher opt-out totals in 2025/26, reflecting the automatic enrolment process. Progress on the McCloud Remedy implementation was reported, with approximately 60% of identified members with multiple records reviewed, confirming an additional 161 members eligible for protections. Work was also underway to examine the National Insurance Database to identify members with benefits in other LGPS funds. An update on the Pensions Dashboard indicated that the fund had connected to the live dashboard infrastructure and was regularly uploading member data. A data cleansing and enrichment project was initiated to address deferred members with gone away addresses. The report also referenced the LGPS 'Access and Protections' consultation launched by the Ministry of Housing, Communities and Local Government, with the Lambeth Pension Fund's response included in Appendix Two.

Overpayment and Underpayment Policy

The committee was presented with the proposed Overpayment and Underpayment Policy for the Lambeth Pension Fund. This policy aims to formalise the fund's approach to managing incorrect pension payments, aligning with LGPS Regulations, HM Revenue and Customs (HMRC) authorised payments rules, and sector best practice. The policy outlines procedures for preventing overpayments through robust pre-payment checks and prompt action on returned payments, as well as the responsibilities of scheme members to notify the fund of any suspected errors. It details the management and recovery of overpayments, including automatic write-offs for amounts under £250 post-death and tiered authorisation levels for writing off larger overpayments. Underpayments are to be corrected immediately, with arrears paid within ten working days. The policy was developed following benchmarking across LGPS authorities and aims to ensure fairness, consistency, and robust governance.

Funding Strategy Statement 2026

The committee reviewed the updated Funding Strategy Statement (FSS) for the Lambeth Pension Fund, effective from 1 April 2026. The FSS reflects the results of the 2025 actuarial valuation, which showed an improved funding level of 120% as at 31 March 2025, up from 96% at the 31 March 2022 valuation. The FSS sets out how contributions will be collected from fund employers and the assumptions underpinning these calculations. It was noted that the FSS had been issued for consultation with fund employers in early February 2026, with an Employers' Forum also held to discuss concerns. The committee was asked to approve the FSS and accompanying policies, which would then be published on the fund's website. The document details the fund's approach to calculating employer contributions, managing surpluses and deficits, and its links to the investment strategy. Specific policies appended to the FSS cover academy funding, bulk transfers, cessations, and pass-through arrangements for outsourced services.

Lambeth Pension Fund – Risk Register

An update on the Lambeth Pension Fund Risk Register was provided, detailing the arrangements in place to manage identified risks. The register categorises risks by inherent, current, and target ratings, using a Red, Amber, Green (RAG) system. There were no red-rated risks identified, with seven amber-rated risks. These included insufficient resources to support the Pension Committee and Board (PA1), insufficient knowledge and understanding of legislative requirements by committee and board members (PA2), the risk of pay and price inflation being higher than anticipated (PA12), investment risk (PA15), investment underperformance (PA16), climate change impact (PA19), and a qualified audit opinion on the fund's financial statements for 2023/24 and 2024/25 (PA22). Mitigation strategies for each risk were outlined, including structural reviews, training provisions, investment diversification, and close dialogue with auditors. The risk rating for PA22 was adjusted to 12 from 8 due to the qualified audit opinion.

Lambeth Pension Fund – General Update March 2026

The committee received a general update on several pensions-related matters. The London CIV (LCIV) reported assets under direct management of approximately £21.1bn as at 31 December 2025, with estimated net fee savings for the quarter ending 31 December 2025 of £519k. Updates were provided on the Pension Schemes Bill, expected to become law soon, and ongoing work with the LCIV regarding the transition of off-pool assets. Progress on private equity allocations to Future Planet Capital, Antler Funds, and Schroders was noted, with officers working to progress these investments before the 1 April 2026 pooling date. Regrettably, the external auditors issued a disclaimed opinion on the Pension Fund Accounts for 2024/25 due to unsupported balances in assets and liabilities, a continuation of issues from the previous year. Efforts are underway with auditors and external support to resolve these historic issues. The final Annual Report incorporating the statement of accounts was published on 27 February 2026. Upcoming training opportunities were highlighted, including the LGPS Pooling Symposium. The report also noted that resources in reporting, accounts, and investments had been stretched, leading to agreement for additional permanent resources and immediate external expert input.

Lambeth Pension Fund – Investment Performance Review – 31 December 2025

The committee reviewed the investment performance of the Lambeth Pension Fund for the quarter ending 31 December 2025. The market value of the fund's assets increased to approximately £1,972.8m. The fund underperformed its benchmark in the quarter, returning 2.1% against a benchmark of 3.0%, primarily due to the underperformance of global equity mandates. Performance over one, three, and five-year periods also fell short of benchmarks. The actuary's estimated funding level as at 30 September 2025 stood at 136%. The report detailed asset class performance, noting that while emerging markets equity and Churchill performed well, global equity, housing, Invesco, and M&G were significant detractors. Rebalancing and investment strategy updates were discussed, with notable overweights to global equities, multi-asset credit, cash, and emerging market equity, and underweights to private equity, private debt, property, and LDI. The fund's UK exposure was approximately 22.7% (£447.6m) as at 31 December 2025. Fund management fees for the quarter were estimated at £1.7m. Fossil fuel exposure was reported as at least 0.47% (£9.2m) as at 30 September 2025. The report also noted that the finalisation of the 2025 actuarial valuation was imminent, with an updated funding level to be provided at the next committee meeting.

Investment Strategy Statement 2026

The committee reviewed and approved the updated Investment Strategy Statement (ISS) for the fund. The ISS has been updated to reflect recent legislative changes and the delegation of future investment management to the London CIV. Key changes include an updated approach to climate change, with a commitment to a 2040 net zero target and interim targets for Weighted Average Carbon Intensity (WACI). The statement also covers the fund's approach to responsible investment and ESG factors. The document will be published on the fund's website following approval. The report noted that the ISS would need further review once the Secretary of State releases new guidance.