Enfield Council's Pension Policy & Investment Committee has agreed to align the Enfield Pension Fund's investment strategy with new government mandates aimed at improving sustainability, governance, and performance. The decision, made at a meeting on Wednesday 30 July 2025, follows the government's response to a consultation on the future of the Local Government Pension Scheme (LGPS). The move is part of a broader national effort to grow pooled investments to £1 trillion by 2040. The Enfield Council Pension Fund already participates in London CIV, which pools pension investments across 32 London Boroughs to improve returns, efficiency, and governance.
The government mandates several sustainability and governance improvements, including:
- Requiring all Administering Authorities (AAs) to delegate the implementation of their investment strategy and take principal investment advice from their pool, and transfer all assets to the management of their pool.
- Establishing pools as investment management companies authorized and regulated by the FCA, with the capability to carry out due diligence on local and regional investments and manage such investments.
- Implementing the LGPS Good Governance recommendations.
- Requiring AAs to set out their approach to local investment, including setting a target range in their Investment Strategy Statement, and reporting annually on the impact of their local investments.
- Requiring AAs and pools to work with strategic authorities to identify local and regional investment opportunities, with due diligence conducted by the pools.
- Having independent advisors, rather than voting members, on Pension Committees.
- Conducting triennial independent governance reviews, aligning with valuation cycles.
The government's proposals, outlined in the final report on the Pension Investment Review, include:
- Delegating investment strategy implementation and principal investment advice to the council's pool, London CIV.
- Transferring all assets to the management of London CIV.
- Establishing pools as FCA-authorised investment management companies.
- Setting a target range for local investment in the Investment Strategy Statement and reporting annually on the impact of local investments.
Council officers will collaborate with London CIV to transition private market assets to London CIV management by 31 March 2026. The transition of listed assets has already been completed. The specific private market assets being transitioned include details of assets can be found in the Public reports pack. Officers will also work with London CIV to clarify investment advice and develop processes for monitoring asset management. The process for selecting and monitoring local investments involves Administering Authorities (AAs) and pools working with strategic authorities to identify local and regional investment opportunities, with due diligence conducted by the pools. The pools will be required to report annually on the impact of their local investments.
The committee considered the impact of recent market volatility following the imposition of trade tariffs by the US in April 2025. The report, Assumptions for triennial valuation, included a chart showing how the expected future investment returns have changed between 31 March 2025 and 31 May 2025 for major asset classes. According to the Hymans Robertson report, there is very little difference in the expected future investment returns in our ESS model between March 2025 and May 2025.
The report attributes this to the model's allowance for market volatility and the long-term nature of the LGPS.
Despite the volatility, the committee concluded that the fund's assumptions reflect the long-term nature of the LGPS and include a margin of prudence within the discount rate to navigate periods of uncertainty. The fund decided to adopt a prudence level of 80% at the 2025 valuation. This level of prudence recognizes volatility in the markets and increased uncertainty in various other risks (such as climate risks). Based on market conditions at 31 March 2025, this results in a reported discount rate assumption of 5.9% pa.
The report stated that there was no clear consensus or agreement about what these tariffs will mean for the economy in the longer-term, including future investment returns and inflation.
The committee also noted reports on the impact of tariffs and the London CIV transition plan.
