The Barking and Dagenham pension fund has seen its value rise to £1.527 billion for the year ending March 31, 2025, marking a 5% increase from the previous year. This growth places the fund in the top 10% of Local Government Pension Scheme (LGPS) funds in England and Wales for investment returns over one, three, and five-year periods, according to independent analysis by the PIRC service, which compares performance against 62 of 86 administering authorities.

A bar chart showing the performance of the LBBD Fund and its benchmark over several financial years, from 2014/15 to 2024/25.
LBBD Fund Performance vs Benchmark

The positive performance was driven by a diversified investment strategy. Beyond equities, the fund's strategy includes allocations to private equity (9%), property (6%), infrastructure (10%), credit (17%), and UK Government Bonds (10%), with a 0-3% tolerance for cash. However, individual performance contributions for these asset classes are not detailed.

Following the latest actuarial valuation, key changes have been made to the strategic asset allocation. The allocation to listed equities has been reduced from 60% to 48%, while UK Government Bonds have increased from 3% to 10%. This adjustment aims to reduce overall risk while maintaining forecast returns, a move supported by the fund's improved funding position. The proposed strategic asset allocation gives a forecast return of 6.5% per annum. The actuarial valuation as at 31 March 2025 shows a funding level of 108%, an improvement from 101% in 2022. The projected funding position by 31 March 2028 is estimated to remain at 108%.

A bar chart comparing the pension fund's assets and liabilities for 2025 and 2022, showing a funding level of 108% in 2025 with a surplus of £0.11bn, and 101% in 2022 with a surplus of £0.01bn. The liabilities are broken down by 'Pensioners', 'Deferreds', and 'Actives'.
Pension Fund Assets and Liabilities Comparison

The improved funding level, now at 108% compared to 101% in 2022, has led to a reduction in the employer contribution primary rate from 21.5% to 18.1% of payroll. This reduction is a direct implication of the improved funding status and aligns with the Funding Strategy Statement's emphasis on maintaining stable employer contribution rates and ensuring the long-term solvency and cost-efficiency of the fund.

A bar chart illustrating the changes in the primary rate of pay for the pension fund, from an average of 21.5% in 2022 to 18.1% in 2025, detailing the contributing factors.
Changes in Primary Contribution Rate

Regarding the strong performance of the fund's equity holdings, while investment returns in recent years have been concentrated in US technology stocks, making it harder for active managers to outperform, the report notes that passive equity holdings tracked the market. The value manager Kempen's strong performance is attributed to its style of investing, which has seen a significant resurgence.

More details on the fund's performance and strategy can be found in the Pension Fund Accounts 2024-25-26 and the Investment Strategy covering report.