The Pensions Committee of Lambeth Council met on Wednesday 22 April 2026 to discuss the actuarial valuation results and funding strategy statement for the Lambeth Pension Fund. The committee also reviewed the fund's risk register and received an update on the annual accounts and audit plan.

Actuarial Valuation Results and Funding Strategy Statement 2025

The committee received the final results of the 2025 actuarial valuation for the Lambeth Pension Fund, carried out by Hymans Robertson. The valuation revealed a significant improvement in the fund's funding level, which increased to 120% from 96% at the previous valuation in 2022. This improvement is largely attributed to higher assumed future investment returns.

The primary contribution rate for employers has increased to 22.1% of pay, up from 20.7%. However, due to the fund's 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 the robust solvency of the fund.

The Funding Strategy Statement (FSS) for 2026 was also noted. This statement outlines the fund's approach to ensuring sufficient funds are available to pay member benefits, aiming for stable contribution rates and transparency in how employers are treated. The FSS was consulted on with employers in February 2026, with no concerns raised.

Lambeth Pension Fund Risk Register

The committee reviewed the latest version of the Lambeth Pension Fund Risk Register, which outlines the arrangements in place to manage risks within the fund. There were no 'red' rated risks identified, with seven 'amber' rated risks remaining. These include insufficient resource to support the Pension Committee and Board, insufficient knowledge and understanding among members, the risk of pay and price inflation being higher than anticipated, investment risk and underperformance, climate change impacts, and the qualified audit opinion received on the 2023/24 and 2024/25 financial statements. Mitigations for these risks are detailed in the report, including structural reviews, training provision, diversified investment strategies, and close liaison with auditors. No changes to the risk register had occurred since the previous meeting on 25 March 2026.

2025/26 Lambeth Pension Fund – The Annual Accounts and Audit Plan

The committee was provided with an update on the preparatory work for the 2025/26 Lambeth Pension Fund accounts and audit. Mazars LLP, the external auditors, will present their proposed audit scope in their annual audit plan, which will be shared with the Chair of the Pension Committee. Preparations for the financial year-end have been underway since April 2026, with extensive engagement between the Pensions Administration Team and Investment Team to ensure a smooth closedown process. The audit fee for 2025/26 is anticipated to increase substantially from the £112,000 reported for 2024/25. The committee noted the preparatory activity undertaken by officers.

Governance Review Outcome

The committee reviewed the findings and recommendations from an independent governance review of the Lambeth Pension Fund. The review, conducted by Hymans Robertson, focused on team structure, Board and Committee effectiveness, and compliance with The Pension Regulator's General Code of Practice. Key recommendations include the appointment of a Senior LGPS Officer, restructuring the pensions function under a single leadership, developing a comprehensive training strategy for governance members, preparing for the appointment of an Independent Person to the Committee, and planning for the first Independent Governance Review by March 2028. Officers confirmed that all recommendations are appropriate and will be implemented, with a detailed plan to follow.

The meeting also included a discussion on the Pensions Committee Work Plan, noting that the London CIV Update would be carried over to the next meeting. The Pension Fund Business Plan Tracker was also noted, with officers highlighting that progress against the tracker remains a priority.