Hackney Pension Fund Surpasses £2.48 Billion in Assets, Boosted by Strong Investment Returns
The Hackney Pension Fund has seen its assets grow to £2.48 billion, a significant increase from £2.12 billion at the end of March 2025. This robust growth, driven by an impressive investment return of 16.72% for the period between April 1, 2025, and June 30, 2026, has resulted in a substantial surplus of £0.71 billion. The fund's funding level now stands at a healthy 140%.
This positive financial position was highlighted at the Pensions Committee meeting on Tuesday, September 22, 2026, where the fund's actuarial and funding update was reviewed. The report revealed a strong financial outlook, with the fund's funding level at March 31, 2025, already standing at 138%, ranking it 18th among Local Government Pension Scheme (LGPS) funds in England and Wales. The latest figures show a further improvement to 140% as of June 30, 2026.
The required future investment return to achieve 100% funding has decreased to 3.9% per annum, down from 4.2% at March 31, 2025. This reduction is primarily attributed to changes in market conditions, specifically a decrease in the discount rate assumption from 6.4% to 6.0% per annum. The likelihood of achieving this return remains high, exceeding 95%, indicating a stable and compliant funding plan.
The fund's strong surplus of £0.71 billion has led to a reduction in employer contribution rates. The Council has been offered a phased reduction, starting with 3% in year 1 (2026/27), followed by 2% of pay in year 2 (2027/28), and a further 1% of pay in year 3 (2028/29). These reductions have been incorporated into the Council's Medium Term Financial Planning, offering significant assistance in mitigating the Council's budget gap over the coming years.
The actuarial update, calculated on an ongoing basis, also incorporated changes to key assumptions. Besides the reduced discount rate, pension increases are now assumed to be 2.5% per annum, up from 2.3%. Salary increases are projected at 0.5% per annum above pension increases, with an additional promotional salary scale. Life expectancy assumptions have also been updated, with male pensioners expected to live 21.4 years and female pensioners 24.0 years from age 65.
Despite the positive outlook, the fund faces potential risks and challenges. The Actuarial and Funding Update
acknowledges the volatile nature of both assets and liabilities, noting that results are particularly sensitive to the real discount rate and longevity assumptions. A 1.0% decrease in the real discount rate could increase liabilities by 17.1%, and a one-year increase in life expectancy could raise liabilities by 3-5%. Furthermore, the Quarterly Investment Performance and Oversight Update
indicates that certain funds, specifically the LCIV Global Alpha Growth Paris Aligned Fund and the LCIV Sustainable Equity Fund, are significantly underperforming their benchmarks.
The TCFD Report
highlights the fund's ambition to reach net-zero emissions by 2040, targeting a 2°C portfolio by 2030 and aiming for 1.5°C by 2040. However, the report also notes limitations in using proxies for calculating metrics due to data constraints and the inherent challenges of scenario analysis.
Further details on the fund's performance and financial position can be found in the Public reports pack for the Pensions Committee meeting on Tuesday, September 22, 2026 Public reports pack Tuesday 22 Sep 2026 18.30 Pensions Committee.pdf.