Tower Hamlets Pension Fund Nears Audit Deadline with £2.38 Billion in Net Assets
The final audited Pension Fund accounts for the year ended 31 March 2026 are on track for publication by the statutory deadline of 1 December 2026, with the external audit by EY nearing completion.
The Pensions Committee of Tower Hamlets Council met on Thursday, 1 October 2026, to review the progress of the audit and the closure of the Pension Fund accounts. The committee was presented with the draft Pension Fund Annual Report and Accounts for 2025/26, which will be approved subject to final audit adjustments.
Authority has been delegated to the Corporate Director, Resources, and the Head of Pensions and Treasury to approve any non-material amendments. Significant audit findings or changes to the auditor's opinion would be reported to the committee.
Fund Performance and Financial Health
The net assets of the Fund reached £2.384 billion as at 31 March 2026, an increase of £192 million from the previous year. This growth was primarily driven by strong performance from the Fund's holdings in global equities and diversified growth assets. The results of the 2025 actuarial valuation also reflected the Fund's healthy financial position, leading to a reduction in employer contribution rates from April 2026. Contributions receivable rose to £101,776,000 in 2025/26 from £90,620,000 in 2024/25, while benefits payable increased from £97,268,000 to £102,252,000.
Despite a negative change in market value of £179,753,000 in 2025/26, the overall net increase in the fund value was £192.2 million. The actuarial present value of promised retirement benefits (liabilities) was estimated at £1,681 million as of March 31, 2026. This indicates a healthy surplus, as the net assets of £2,384 million significantly exceed the estimated liabilities. The latest statutory valuation at 31 March 2025 showed a funding level of 129%.
In terms of performance, the Tower Hamlets Pension Fund delivered a positive return of 8.6% in the 2025/26 fiscal year, against a universe average of 9.6%. This placed the Fund's overall performance in the 62nd percentile for the year, ranking it in the second quartile compared to its peers. While the Fund underperformed its benchmark in 2025/26, it was on par with the Local Authority average over the 3 and 10-year periods, demonstrating long-term resilience. The Fund's benchmark return for one year was 11.6%, for three years was 10.2%, and for five years was 7.6%.
Future Investment Strategy
The Fund's strategic asset allocation was pooled as of 1 April 2026, primarily via London CIV sub-funds. The Investment Strategy Statement (ISS), which will outline the future strategy, is currently being developed and consulted upon, with a deadline for publication no later than 31 March 2027. The ISS will address key areas including investment objectives, funding considerations, risk management, asset allocation, liquidity management, local investment, responsible investment, stewardship, pooling arrangements, and implementation through the pool.
The final audited Pension Fund Annual Report and Accounts, along with the external auditor's report, will be published on the council's website and circulated to relevant stakeholders. The report on Pension Fund Closing 2025/26 and External Audit was presented by Paul Audu, Interim Head of Pensions and Treasury.