Issue - meetings

To present the Draft Annual Accounts 2025/26 for review and noting by the Sub-committee.

Manish Shah (Senior Finance Analyst) introduced the report from the Corporate Director Finance and Resources, presenting the draft Pension Fund Annual Accounts for the year ending 31^st March 2026.

In noting the indicative draft audit plan for the 2025/26 accounts (on which no significant issues had been identified to date), as detailed within Appendix 2 of the report and draft Pension Fund Annual Accounts for the year ended 31 March 2026, as detailed in Appendix 1 of the report, the following main issues were highlighted for members:

·            During 2025/26, the value of the Pension Fund’s investments increased to £1,482m (2024/25 £1,310m). Growth assets continued to be main driver of positive returns both in absolute and in relative terms over the past 12 months, with investments held within the Emerging Markets equities being the main performer and the overweight position in this asset class having benefited fund performance. The UK housing market had for the quarter remained flat but underperformed the bench over the same period as rising gilts yields triggered by the war in Iran continued to impact demand.

·            Total contributions received from employers and employees were £70m for the year, a decrease on the previous year’s £73m reflecting the reduction in the main employer contribution rate from 30.5% to 23% as the Fund's funding position had improved

·            Total benefits paid to scheme beneficiaries, in the form of pensions or other benefits, were £62m, an increase on the previous year’s £60m.

·            As in 2024/25, the pension fund remained in a positive cash-flow position as its contributions exceeded outgoings to members.

Following the update, the Chair invited members to raise any comments with the issues summarised below:

·            A question was raised over how the Fund had achieved such a strong position given the scale of the reduction in employer contributions. Sawan Shah responded by explaining that the employer contribution rate had in fact reduced only gradually over recent years, under the stabilisation strategy agreed as part of the previous valuation cycle, from 35% three years earlier to 30.5% for the year covered by these accounts. Pay increases over this period had largely been offsetting the cash effect of the rate reduction. It was noted that the more significant reduction to 23%, effective from 1 April 2026 following the latest triennial valuation, would be reflected in next year's accounts.

With no further issues raised and in thanking the Finance team for their work regarding the funds management, the Committee RESOLVED to note the Draft Brent Pension Fund Year End Accounts 2025-26.