Pensions Committee

Minutes PENSIONS COMMITTEE 9 December 2025 Meeting held at Committee Room 5 - Civic Centre Committee Members Present: Councillors Reeta Chamdal (Chair), Stuart Mathers, Labina Basit and Peter Smallwood (left during agenda item 12) Also Present: Jenny Buck – LCIV Sian Kunert – LCIV Zahra Rumani – LCIV Tony Noakes – Pension Board Member Roger Hackett – Chair of Pensions Board Member Johnny Moore – ISIO Emily McGuire – ISIO Catherine Edgecombe - Hampshire County Council Marian George – Independent Advisor LBH Officers Present: Karl Periera – Trainee Pension Fund Accountant Pete Carpenter – Director, Pensions, Treasury & Statutory Accounts Anisha Teji – Senior Democratic Services Officer Tunde Adekoya – Finance Manager - Pensions & Governance 143. APOLOGIES FOR ABSENCE (Agenda Item 1) Apologies for absence were received from Councillor Kaushik Banerjee. 144. DECLARATIONS OF INTEREST IN MATTERS COMING BEFORE THIS MEETING (Agenda Item 2) None. 145. MINUTES OF THE MEETING DATED 24 SEPTEMBER 2025 (Agenda Item 3) RESOLVED: It was agreed that the minutes of the meeting on 24 September 2025 be confirmed as an accurate record. 146. TO CONFIRM THAT ITEMS MARKED PART I WILL BE CONSIDERED IN PUBLIC AND THOSE MARKED PART II WILL BE CONSIDERED IN PRIVATE (Agenda Item 4) It was confirmed that agenda items 5 – 10 would be heard in Part I and agenda items 11 – 13 would be heard in Part II. 147. PETITION ON LGPS DIVESTMENT (Agenda Item 5) With the Chair’s permission, the Committee considered a petition by local residents and members of the Hillingdon Palestine Solidarity Campaign, requesting that Hillingdon Council’s pension fund i nvestments be divested from companies alleged to have been complicit in violations of Palestinian rights. The lead petitioner addressed the Committee, noting over 40 years of residence and work in Hillingdon and membership in the pension scheme. It was reported that over 1000 residents had signed the petition, supported by local groups and trade unions. The petitioner requested a special meeting to review the legal notice, as the current agenda was considered insufficient and called for the Council to end investments in companies complicit in human rights abuses in Gaza. It was urged that influence be used within the London Collective Investment Vehicle to lobby for divestment and that policies be introduced to prevent future investments and terminat e contracts with such companies. The petitioner highlighted that over £6 million had been invested in these companies, with details publicly available and referenced a legal notice outlining obligations to divest. It was noted that 26 councils had already commit ted to ending ties with such companies. Strong moral and legal arguments were presented, stressing that continued investment rendered the Council complicit in breaches of international law and war crimes. The humanitarian impact, including civilian casualties and violations of the Geneva Convention was emphasised and a clear commitment for action was requested. The Committee reiterated its fiduciary duty to meet liabilities while considering ESG factors, noting that the Investment Strategy Statement was b eing updated for approval by the Pensions Committee in March 2026. Members acknowledged numerous resident letters, stressed the importance of responsible investment and confirmed further discussion in Part 2, with decisions to be made public. RESOLVED: Th at the Pensions Committee noted the petition and submissions made by the petition organiser. 148. ADMINISTRATION REPORT (Agenda Item 6) The Pensions Administration & Performance report was introduced by the Director of Pensions, Treasury & Statutory Accounts. It was reported that membership had increased to 32,546 (+18.5% since onboarding on 27 September 2021), with Active members representing only 29%, reflecting that payments out had exceeded contributions. In October, 100% SLA complian ce was achieved, with 242 cases processed within SLA and 502 cases outstanding, mainly awaiting third -party information. Member Portal registrations had re ached 16,838 (55% of membership). There were 114 active employers, with one exit recorded in October and pending changes including two exits, ten admitted bodies and one academy conversion. The McCloud Remedy deadline was confirmed as extended to August 2026 and Civica onboarding for the Pensions Dashboard was completed. Members’ queries were raised reg arding the average time outstanding administrative cases remained unresolved, the expected completion date for the historic backlog of 243 cases and whether the original compliance deadline under the McCloud requirements had been met. It was confirmed that the remaining cases were complex and could only be resolved upon individuals’ retirement due to missing or inaccessible historic payroll data. Significant progress had been noted from an initial 4000 cases, and the remainin g issues were being managed as p art of risk assessment. Previous non-compliance was noted as resulting from national technical issues rather than local failures. Members suggested that consideration be given to whether continued reporting of these cases was necessary or whether they shou ld be monitored through risk management processes. RESOLVED: That the Pensions Committee note the administration update. 149. INVESTMENT STRATEGY AND FUND MANAGER PERFORMANCE - PART I (Agenda Item 7) The Investments Strategy and Fund Man ager Performance report was introduced by the Director of Pensions, Treasury & Statutory Accounts, and the dashboard produced collaboratively by officers was highlighted. The actuary’s quarterly update was reported, confirming a Funding Level of 146%, up f rom 136% in Q2. Assets were stated as £1.54bn, an i ncrease of £100m, while Liabilities had fallen by £20m, improving the surplus. Key assumptions were noted as a 6.9% discount rate and 2.1% pension increases. Investment performance, as outlined in the join t report with London CIV, was reported as a quarterly return of +5.7%, exceeding the benchmark by 0.3%. Year-to-date returns were +8.4%, with a three -year annualised rate of +9.6%. Top contributors were identified as LGIM Future World Fund (+2.33%), LGIM W orld Developed Equity (+2.16%) and LCIV Global Alph a Growth Paris Aligned (+0.43%), while underperformance was noted in Opportunistic Dislocation and certain Private Debt allocations. A concern was raised by Members regarding how the fund would protect it self in the event of a significant downturn in equities, given their current position as the largest growth factor. It was confirmed that this matter would be addressed in detail during Part 2 of the meeting as part of the investment strategy discussion. RESOLVED: That the Committee not the funding and performance update. 150. RESPONSIBLE INVESTMENT (Agenda Item 8) The Responsible Investments Update was introduced by the Finance Manager – Pensions & Governance. The report provided inform ation on how managers entrusted with investing Pension Fund assets had implemented ESG policies and demonstrated commitment to integrating them into the investment process. A voting breakdown was summarised: LGIM was recorded as having opposed proposed man agement resolutions on 27% of occasions, supported approximately 72%, and abstained on 1.26%. The London CIV, through three equity p ortfolio managers and the absolute return manager Ruffer, was noted as having supported management resolutions on 88% of vot ing opportunities, opposed around 10%, with abstentions at 1.79%. As requested at the previous Committee meeting, detailed lower -level voting tables were included on pages 41 –44. During the quarter, LAPFF was reported to have engaged with various companies worldwide on ESG issues, with three examples of engagement activities in Q2 2025 (Environmental, Social, and Executive Remuneration) provided. The fund managers’ engagement activities and compliance efforts, along with LAPFF engagement, were noted by the Committee. The importance of balancing governance - focused resolutions with social and environmental issues was highlighted, with LAPFF’s role in promoting ESG priorities stressed. It was observed that most shareholder resolutions related to remuneration a nd governance rather than environmental or social factors, reinforcing the need for continued engagement on these themes. Questions were raised a bout whether recent voting patterns indicated a significant behavioural shift or remained consistent with previ ous trends. Officers confirmed that resolutions were largely standard and shareholder -proposed, with some variation reflecting current issues. It was further noted that environmental resolutions appeared to have decreased, particularly among US -based compa nies, though this was not taken to imply reduced corporate focus. Cybersecurity was identified as an area with limited shareholder resolutions. RESOLVED: That the Pensions Committee: 1. Noted the fund managers’ ESG activities and compliance efforts 2. Noted LCIV & LAPFF activities 151. RISK REGISTER REPORT (Agenda Item 9) The Risk Register Report was introduced by the Finance Manager – Pensions & Governance and key risks were outlined along with mitigation measures. Risks were categorised as either tolerated, managed as business as usual, or open, actively monitored and addressed. Members were advised that forthcoming “Fit for Futur e” legislation would require a full review of the register and risk management approach. It was noted that new r ules had recently been issued, creating tight timescales for compliance ahead of the 1 April 2026 go -live date, with consultation still to be completed. Queries were raised regarding liquidity for member dealings and whether late publication of national g uidance should be considered a risk. It was confirmed that liquidity had been well managed, with strong cash balances and no need to sell assets for pensions in the past 20 –30 years. Private equity and debt investments were reported as currently providing cash flow and strategies such as redirecting investment income were available to address future gaps. A review of cash flow risks was scheduled to follow the valuation results, and a graph illustrating asset maturity and cash flow trajectory was requested. These considerations were noted as forming part of the investment strategy discussion in Part II. Further questions confirmed that the risk r egister included non -investment risks such as cyber security, tax, compliance, and administrative errors. Member s highlighted the importance of ensuring risk 11 (failure of the pool) reflected the significant work required to meet “Fit for Future” requirements by March. Given tight timescales and new rules, it was agreed that additional touch -base meetings before Ma rch would be necessary to monitor progress and mitigate risks. RESOLVED: That the Pensions Committee: 1. Considered and agreed the Risk Register in terms of the approach, the specific risks identified, and the measures being taken to mitigate those current risks. 2. Noted the revised format and agreed the retired risks and those which remained open. 152. GOVERNANCE (Agenda Item 10) The Committee reviewed the work plan and noted that some policies, including the Conflicts of Interest, Training Policy and Responsible Investment Policy, will be deferred to March 2026 to align with the annual valuation. Continuous professional development was highlighted, with a training log provided for members. The Committee noted progress towards compliance wit h the General Code of Practice, with two policies scheduled for approval in Part 2 to achieve full compliance. The draft Funding Strategy Statement was presented and approved for consultation, aiming to maintain stable employer contribution rates and ensur e long -term solvency. Revised Internal Dispute Resolution Procedure guidance was agreed, clarifying Stage 1 responsibilities for academies and updates to the Administration Strategy Statement were approved to reflect pensions dashboard requirements. Member s discussed governance standards compared to other London funds, welcomed ongoing training and requested a review of any outstanding internal audit recommendations. RESOLVED: That the Committee: 1. Noted the dates for Pensions Committee meetings. 2. Noted Committee Work Plan. 3. Noted Committee’s Continuous Professional Development update. 4. Noted GCoP Update. 5. Noted and Approved Draft Funding Strategy Statement for Consultation. 6. Noted and Approved Revised Internal Dispute Resolution Procedure Guide. 7. Noted and Approved Revised Pensions Administration Strategy Statement. 153. APPROVE RESTRICTED MINUTES FROM MEETING ON 24 SEPTEMBER 2025 (Agenda Item 11) RESOLVED: That the Committee approved the restricted minutes from the meeting on 24 September 2025. 154. GOVERNANCE PART II (Agenda Item 12) This item was discussed as a Part II item without the press or public present as the information under discussion contained confidential or exempt information as defined by law in the Local Government (Access to Information) Act 1985. This was because it discussed ‘information relating to the financial or business affairs of any particular person (including the authority holding that information)’ (paragraph 3 of the schedule to the Act). RESOLVED: That the Committee noted the recommendation as detailed in the confidential report. 155. INVESTMENT PART II - STRATEGY REVIEW AND FIT FOR THE FUTURE UPDATE (Agenda Item 13) This item was discussed as a Part II item without the press or public present as the information under discussion contained confidential or exempt information as defined by law in the Local Government (Access to Information) Act 1985. This was because it discussed ‘information relating to the financial o r business affairs of any particular person (including the authority holding that information)’ (p aragraph 3 of the schedule to the Act). RESOLVED: That the Committee noted the recommendation as detailed in the confidential report. The meeting, which commenced at 5pm, closed at 8.32 pm. These are the minutes of the above meeting. For more information on any of the resolutions please contact Anisha Teji on ateji@hillingdon.gov.uk. Circulation of these minutes is to Councillors, Officers, the Press and Members of the Public.

Classification: Public Pensions Committee 24 March 2026 Pensions Administration & Performance Item 5 Committee Pensions Committee Contact Officers Pete Carpenter - Finance Tunde Adekoya – Finance Papers with this report None REASON FOR ITEM The provision of administration services for the Hillingdon Pension Fund is delivered in partnership with Hampshire County Council (HCC) through Hampshire Pension Service (HPS) under a section 101 agreement. The agreement includes Key Performance Indicators (KPIs) which are generally consistent with national standards. The purpose of this report is to update the Pension s Committee on pensions administration activities and the performance of the administration provider against the agreed indicators. RECOMMENDATIONS 1. That the Pensions Committee note the administration update INFORMATION This report provides a comprehensive overview of the administration of the London Borough of Hillingdon Local Government Pension Scheme (LBH LGPS) for December 2025. Hampshire Pension Services (HPS) continues to deliver high performance across key metrics, with 100% SLA compliance and significant growth in scheme membership. Key developments include progress on McCloud remedy implementation, dashboard connectivity delays, and enhanced employer services. Key Takeaways - Membership has grown by nearly 18.37% since onboarding, indicating strong scheme engagement. Classification: Public Pensions Committee 24 March 2026 - 55% of members are registered on the portal, showing good digital adoption. - 100% of administration cases were completed within SLA timelines, reflecting operational efficiency. 227 cases were processed in the month. - Only 239 historic leaver cases remain unprocessed, down from over 4,161. - Member communication volumes are high, with over 123 calls received and 118 answered within 5 minutes in September. - McCloud main deadline was extended to 31August 2026. - Audit results show substantial assurance in two key areas, member deaths and transfer audits. - Communications: One member communication: ID verification for overseas pensioners - Feedback: 3 compliments, 0 complaint received. Membership Membership in the Local Government Pension Scheme has grown by 18.37% since the start of the partnership, with notable increases in deferred and pensioner categories. Membership Growth What it shows Registration penetration: Active 64.72%, Deferred 50.12%, Pensioner 52.30%. Opportunity to target Deferred members for higher digital engagement. Classification: Public Pensions Committee 24 March 2026 Administration Administration performance remains strong, with 100% of cases completed within service level agreements. The table below shows performance from 1st December – 31st December 2025. The service level agreement (SLA) for all casework is 15 working days, except for deferred benefits which are processed in 30 working days, and re-joiners which are processed in 20 working days. Time to Complete Case Type Total Cases % Completed on Time Avg Days Active Retirement 12 100% 5 Deferred Retirement 16 100% 7 Estimates 33 100% 7 Refunds 18 100% 9 Deferred Benefits 61 100% 24 Transfers In 11 100% 4 Transfers Out 31 100% 9 Divorce Quotes 3 100% 6 Re-joiners/Aggregation 26 100% 11 Deaths 16 100% 6 Grand Total 227 100% Classification: Public Pensions Committee 24 March 2026 What it shows All case types completed within SLA in December (100% on time). Average completion times are well inside thresholds—e.g., Deferred Benefits averaged 24 days vs 30-day SLA, Re-joiners 11 days vs 20-day SLA The table below shows outstanding work as of 31st December 2025. The time outstanding reflects the time from date of receipt of the initiating request, and includes time whilst cases are on hold pending further information. Work which has been pended is monitored by the team and is also pushed for review by the system at pre-determined intervals. This means that all pending casework is regularly reviewed, and actions taken to ensure it can be moved and processed. Case Type Total Outstanding Active Retirement 4 Deferred Retirement 16 Estimates 80 Refunds 4 Deferred Benefits 88 Transfers In 139 Transfers Out 14 Divorce Quotes 0 Divorce Actuals 3 Rejoiners/Aggregation 71 Deaths 42 Grand Total 461 *Estimates include all ‘quote’ calculations for retirement, transfers, divorce, refunds, dependants quotes and interfund. Total outstanding cases: 461. The largest backlogs are Transfers In (139), Deferred Benefits (88), and Estimates (80) Classification: Public Pensions Committee 24 March 2026 2025 End of Year timetable The timetable of 2025 year-end processes have been completed. Active Benefit Statements – The production of active benefit statements has been ongoing, throughout December, and the 31 December position is as follows. We have included a comparison to the number of statements produced by the deadline of 31 August 2025. Date Total Number of Statements Required Total Number of Statements Produced Total Number of Statements Missing Percentage of Statements Produced 31/12/2025 9,256 9,229 27 99.71% 31/08/2025 9,256 9,214 42 99.55% The numbers above include all members – those that are in scope for the McCloud Remedy, and those out of scope. For those in scope, a guaranteed amount (the underpin) has been calculated and is included in the information provided. As of 31 December 2025, the unprocessed leavers position is as follows. Unprocessed Leavers transferred from Surrey, at point of onboarding. 3,840 Additional unprocessed leavers identified since onboarding 321 Total unprocessed leavers 4,161 Leavers processed, and records finalised by HPS 3,922 Leavers processed in the last month* 2 Outstanding leavers to be processed 239 *Included in the ‘Leavers processed, and records finalised by HPS’. Classification: Public Pensions Committee 24 March 2026 McCloud Update The main deadline for the implementation of the McCloud remedy was 31 August 2025. The Fund decided to extend the deadline to 31 August 2026 for the work which could not be completed by 31 August 2025. The current position on the outstanding work is shown below. Area of work Cases Update Club transfer in 0 LBH did not have any of these cases Pensioners 260 We are commencing the recalculation of these records Pension sharing orders 0 LBH did not have any of these cases Pensions Dashboard Programme (PDP) All schemes administered by Hampshire Pension Services were connected to the central architecture of the Pensions Dashboard on 12th December, as confirmed by email to all key contacts. We haven’t experienced and aren’t expecting any impact from this, as the Dashboard is not available to the public, but we will continue to prepare for when that time comes. Audit The Southern Internal Audit Partnership (SIAP) provides the internal audit function for Hampshire. The position of our 2025/26 pension audits are as follows. Audit Area Timing Member deaths Provide assurance that any payments related to deceased members are calculated correctly and paid promptly to the correct recipient with the risk of overpayments minimised. Substantial rating confirmed. Pension transfers Provide assurance that the processes and controls in place support the accuracy and timeliness of transfers in and out of the schemes administered by HPS. Substantial rating confirmed. Audit Area Timing Classification: Public Pensions Committee 24 March 2026 Pensions payroll and benefit calculations Annual review to provide assurance that HPS’ systems and controls ensure that: • Lump sum and on-going pension payments are calculated correctly, are valid and paid to the correct recipients. • All changes to on-going pensions are accurate and timely. • Pension payroll runs are accurate, complete, timely and secure with all appropriate deductions made and paid over to the relevant bodies. Quarter 3/4 Cyber Security Provide assurance over the cyber security arrangements within HPS and the UPM application. Precise scope to be determined by the outcomes of the 2024/25 audit, cyber security and UPM developments during the year. Quarter 4 FINANCIAL IMPLICATIONS Financial implications are included in the body of the report. LEGAL IMPLICATIONS Legal implications have been included in the body of the report.

Classification: Public Pension Committee 24 March 2026 VALUATION REPORT AND FUNDING STRATEGY ITEM 6 Committee Pensions Committee Officer Reporting Tunde Adekoya, Finance Pete Carpenter, Finance Papers with report 1. Draft Valuation Report 2. Funding Strategy Statement BACKGROUND Hillingdon Council as the administering authority of the Hillingdon Pension Fund is required under Regulation 62 (1) of LGPS Regulations 2013 to carry out a triennial valuation to review the current funding strategy and ensure that there is an effective contribution plan and investment strategy to pay benefits to members as they fall due. The triennial valuation assumptions for March 2025 were approved at the September 2025 Committee. The draft Funding Strategy Statement was also approved by the Committee for consultation. The triennial valuation is now complete, and the results attached. Craig Alexander from Hymans Robertson, the Pension Fund Actuary will present the final results to the Committee. RECOMMENDATION It is recommended that pensions Committee: 1. Agree the draft Triennial Valuation Report. 2. Approve the Funding Strategy Statement for the London Borough of Hillingdon Pension Fund. SUMMARY OF THE VALUATION RESULTS Funding position The table below summarises the funding position as of 31 March 2025 in respect of benefits earned by members up to this date (along with a comparison at the last formal valuation on 31 March 2022). Past Service Position 31 March 2022 31 March 2025 Classification: Public Pension Committee 24 March 2026 (£m) (£m) Past Service Liabilities 1,430 1,199 Market Value of Assets 1,263 1,410 Surplus / (Deficit) (167) 211 Funding Level 88% 118% There has been an improvement in the funding level since the last valuation in March 2022 from 88% to 118%, moving from a deficit of (£167m) to a surplus of £211m.The improvement in funding position between 2022 and 2025 is mainly due to expectations of higher investment returns, thus reducing the liabilities and investment performance over the period resulting in an increased asset value of £ 147m. The liabilities have also decreased over the period by £231m. The likelihood of the Fund achieving the required return has improved from 62% in 2022 to 84% in 2025. Contribution rates The table below shows the contribution rate for the whole fund of March 2025. The Primary rate is the payroll weighted average of each individual employer primary rate. The secondary rate is the total of each individual employer rate expressed in monetary terms, calculated in accordance with the Regulations and CIPFA guidance. Valuation 31 March 2025 Valuation 31 March 2022 Primary rate (% of pay) 19.5% of pay 19.6% of pay Year £ Year £ Secondary Rate £ 2026/27 -1,028,000 2023/24 6,682,000 2027/28 -1,057,000 2024/25 6,897,000 2028/29 -1,087,000 2025/26 7,120,000 The average % rate overall has reduced from 23.7 % ( Primary 19.6%, Secondary 4.1%) to 19.0% ((Primary 19.5%, Secondary –0.5%). The Primary rate above includes an allowance for administration expenses of 0.8% of pensionable pay (also 0.8% at 2022 valuation). The average employee contribution rate is 6.6% of pensionable pay (6.7% at 2022 valuation). Broadly, contributions required to be made by employers in respect of new benefits earned by members (the primary contribution rate) have decreased as future expected investment returns have improved. Changes to employer contributions targeted to fund the deficit have been variable across employers. The schedule of contributions to be paid by each employer, commencing 1 April 2026 to 31 March 2029 are set out in the Rates and Adjustment Certificate included in the valuation report. Missing Information There is missing information in this final draft document. The information is on the Gender Pension Gap analysis (the results of which will also form its own Appendix 9 of the final document). The Gender Pensions Gap (GPeG) guidance has only recently Classification: Public Pension Committee 24 March 2026 been released by (Government Actuaries Department) GAD and Hymans are working through the analysis and requirements for all their LGPS Funds now. This must and will be completed and included in the final valuation report by 31 March 2026. FUNDING STRATEGY STATEMENT The Local Government Pension Scheme Regulations 2013 (58)(1) require the administering authority to prepare, maintain and publish a statement setting out its funding strategy (FSS). The regulations also require the authority to keep the statement under review and, make such revisions as are appropriate following any material change in its policy after consultation with appropriate stakeholders. The revised FSS should then be published. The FSS sets out the processes the Council, in its role as Administering Authority uses to: • establish a clear and transparent fund -specific strategy identifying how employers’ pension liabilities are best met going forward • support the desirability of maintaining as constant and stable primary contribution rate as possible, as defined in Regulation 62(5) of the LGPS Regulations 2013 • ensure that the regulatory requirements to set contributions to ensure the solvency and long-term cost efficiency of the fund are met • explain how the fund balances the interests of different employers • explain how the fund deals with conflicts of interest and references other policies/strategies. The Funding Strategy Statement for the Hillingdon Pension Fund has been reviewed and updated following the 20 25 triennial valuation. The draft was approved for consultation at the Pensions Committee of 24 September 202 5 and was sent to employers on 20 November 2025. The consultation period ended on 12 December 2025. There were no changes arising from the consultation. The FSS is now being presented back to Committee for final approval. FINANCIAL IMPLICATIONS The financial implications are included in the body of the report. LEGAL IMPLICATIONS The legal implications are included in the body of the report.

London Borough of Hillingdon Pension Fund Report on the actuarial valuation as at 31 March 2025 March 2026 Craig Alexander FFA C.Act Fellow of the Institute and Faculty of Actuaries For and on behalf of Hymans Robertson LLP London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Contents London Borough of Hillingdon Pension Fund Page 1. Executive summary 4 2. Valuation approach 5 3. Valuation results 8 4. Risks and sensitivities 13 5. Final comments 17 Appendices Appendix 1: Data Appendix 2: Assumptions Appendix 3: Governance audit trail Appendix 4: Climate change scenario analysis Appendix 5: Section 13 dashboard Appendix 6: Reliances & limitations Appendix 7: Glossary Appendix 8: Rates and Adjustments Certificate Appendix 9: Gender pensions gap London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 003 Executive summary London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 004 1. Executive summary We have been commissioned by London Borough of Hillingdon (“the Administering Authority”) to carry out a valuation of the London Borough of Hillingdon Pension Fund (“the Fund”) as at 31 March 2025. This fulfils Regulation 62 of the Local Government Pension Scheme Regulations 2013. This re port is a summary of the valuation. Contribution rates The contribution rates for individual employers set at the 31 March 2025 valuation can be found in the Rates and Adjustments certificate. Table 1 shows the combined individual employer rates, compared to the last valuation in 2022. Table 1: Combined employer contribution rates compared with previous valuation On average, contribution rates have reduced due to higher assumed future returns at 2025, reducing the estimated cost of funding future benefit payments. Funding position At 31 March 2025, the funding position on the Fund’s assumptions has improved from the last valuation at 31 March 2022. Table 2 shows the reported funding position, compared to the last valuation in 2022. Valuation Date 31 March 2025 31 March 2022 Assets (£m) 1,410 1,263 Liabilities (£m) 1,199 1,430 Surplus / (Deficit) (£m) 211 (167) Funding Level 118% 88% Table 2: Reported funding position compared with previous valuation Similar to contribution rates, the improvement in funding level is primarily due to higher assumed future investment returns at 2025. 31 March 2025 31 March 2022 Primary rate 19.5% of pay 19.6% of pay Secondary rate 2026/27 -0.5% 2023/24 4.1% 2027/28 -0.5% 2024/25 4.1% 2028/29 -0.5% 2025/26 4.1% Comparison with other LGPS funds The funding position and contribution rates are based on assumptions about future factors such as investment returns, inflati on and life expectancy. As these are uncertain, different assumptions are used by each LGPS fund to reflect their own views, circum stances and strategic objectives. These differences (amongst other factors, including crucially the previous funding level and employer affordability and long -term contribution stability) will lead to differences in funding positions and contribution rates across the LGPS. To support comparison, LGPS funds are required to report a funding position on a consistent set of assumptions (called the “S AB funding level”). The Fund’s SAB funding level at 31 March 2025 is 94%. SAB assumptions are to allow comparison only and are not intended to be appropriate for funding or setting contribution rates. As such, this result has no impact on the Fund’s funding strategy or employer contribution rates. West Sussex Pension Fund | Hymans Robertson LLP March 2026 005 2. Valuation approach 2.1 Valuation purpose The triennial actuarial valuation is an important part of the Fund’s risk management framework. Its main purpose is to ensure the Fund continues to have a funding strategy that is likely to achieve the objectives set out in the Funding Strategy Statement. This report contains the valuation’s two key outcomes: Employer contribution rates for the period 1 April 2026 to 31 March 2029 The funding position of the whole Fund at 31 March 2025. Further information on the process, methodology and strategy has been communicated to relevant stakeholders throughout the valuation. There is also further information publicly available in the Funding Strategy Statement and Hymans Robertson’s LGPS 2025 valuation toolkit. 2.2 Setting employer contribution rates Employer contributions need to be set at a level which ensures the Fund has a reasonable likelihood of having enough money to pay members’ benefits. Identifying the amount of benefits that may be paid is complex, as benefits earned today may not be paid until 50+ years has passed. Over that period, there is significant uncertainty over factors which affect the cost of benefits e.g. inflation and investment returns. These uncertainties are considered within the risk-based approach to setting employer contribution rates. This approach is built around three key funding decisions. Key funding decisions Decision 1: What is the target funding level (how much money the Fund aims to hold) and funding basis (the set of actuarial assumptions used to value the past and future liabilities)? Decision 2: What is the funding time horizon (the time given to employers to meet the target funding level)? Decision 3: What is the likelihood of success (how likely it is that employers will meet the target funding level at the end of the funding time horizon) ? The funding decisions will vary between employers within the Fund and are documented in the Funding Strategy Statement. Valuation approach London Borough of Hillingdon | Hymans Robertson LLP March 2026 006 2. Valuation approach 2.1 Valuation purpose The triennial actuarial valuation is an important part of the Fund’s risk management framework. Its main purpose is to ensure the Fund continues to have a funding strategy that is likely to achieve the objectives set out in the Funding Strategy Statement. This report contains the valuation’s two key outcomes: Employer contribution rates for the period 1 April 2026 to 31 March 2029 The funding position of the whole Fund at 31 March 2025. Further information on the process, methodology and strategy has been communicated to relevant stakeholders throughout the valuation. There is also further information publicly available in the Funding Strategy Statement and Hymans Robertson’s LGPS 2025 valuation toolkit. 2.2 Setting employer contribution rates Employer contributions need to be set at a level which ensures the Fund has a reasonable likelihood of having enough money to pay members’ benefits. Identifying the amount of benefits that may be paid is complex, as benefits earned today may not be paid until 50+ years has passed. Over that period, there is significant uncertainty over factors which affect the cost of benefits e.g. inflation and investment returns. These uncertainties are considered within the risk-based approach to setting employer contribution rates. This approach is built around three key funding decisions. Key funding decisions Decision 1: What is the target funding level (how much money the Fund aims to hold) and funding basis (the set of actuarial assumptions used to value the past and future liabilities)? Decision 2: What is the funding time horizon (the time given to employers to meet the target funding level)? Decision 3: What is the likelihood of success (how likely it is that employers will meet the target funding level at the end of the funding time horizon)? The funding decisions will vary between employers within the Fund and are documented in the Funding Strategy Statement. Risk-based approach Asset-liability modelling is used to project each employer’s assets and benefit payments into the future under 5,000 different economic simulations. The resulting 5,000 projections of the employer’s assets and benefits are used to quantify the likelihood of success. The simulations are generated using Hymans Robertson’s Economic Scenario Service (ESS). Further information on this can be found in Appendix 2. Contribution rates are then set for each employer which acheive each employer’s minimum likelihood of meeting their target funding level on their funding basis at the end of their funding time horizon. London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 007 2.3 Measuring the funding position The funding position is measured as at the valuation date. While it is limited in providing insight into the future health of the Fund, it is a useful high-level summary statistic. A market-related approach is taken to calculate both the assets and the liabilities to ensure they are consistent with one another: The market value of the Fund’s assets at the valuation date has been used. The liabilities have been valued using assumptions based on market indicators at the valuation date (these are detailed in Appendix 2). Calculating the liabilities The liabilities are the value of all future payments to members based on all benefits earned up to, or in payment at, the valuation date, expressed in today’s money. Chart 1 shows the annual split of projected benefit payments for all members in the Fund at the valuation date. The projections are based on the membership data provided for the valuation (Appendix 1), the assumptions (Appendix 2) and our understanding of the LGPS benefit structure as at 31 March 2025 (details at www.lgpsregs.org). There are currently sources of uncertainty and potential change related to the LGPS benefit structure and Appendix 2 sets out how these have been considered. The “spike” in year 2 reflects the anticipated retirement of a tranche of active and deferred members who are currently older than their assumed retirement age, whilst the “dip” around year 20 reflects the planned increase in State Pension Age to 68. Chart 1: Projected benefit payments for all service earned up to 31 March 2025 To express the future payments in today’s money, each projected payment is discounted back to the valuation date in line with an assumed rate of future investment return (known as the ‘discount rate’). - 10 20 30 40 50 60 70 80 90 100 1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 Benefits (£m) Years from Valuation Date London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 008 3. Valuation results 3.1 Employer contribution rates The primary objective of the funding strategy is to set employer contribution rates that will enable it to have enough assets to pay members’ benefits as they fall due. A secondary objective is to ensure the rates are as stable and affordable as possible. The risk-based approach detailed earlier is used to meet these objectives. The employer contribution rate is made up of two components: Primary rate: the level of contributions sufficient to fund benefits that will be accrued in the future. Secondary rate: the difference between the primary rate and the total contribution rate. This may be in respect of costs associated with accrued benefits or adjustments to achieve the Fund’s stability and affordability objectives. Table 3 shows the combined individual employer contribution rates to be paid into the Fund over the period 1 April 2026 to 31 March 2029. There is also a comparison with the contributions set at the last valuation in 2022. 31 March 2025 31 March 2022 Primary rate 19.5% of pay 19.6% of pay Secondary rate 2026/27 -0.5% 2023/24 4.1% 2027/28 -0.5% 2024/25 4.1% 2028/29 -0.5% 2025/26 4.1% Table 3: Combined employer contribution rates compared with previous valuation Valuation results London Borough of Hillingdon | Hymans Robertson LLP March 2026 009 3. Valuation results 3.1 Employer contribution rates The primary objective of the funding strategy is to set employer contribution rates that will enable it to have enough assets to pay members’ benefits as they fall due. A secondary objective is to ensure the rates are as stable and affordable as possible. The risk-based approach detailed earlier is used to meet these objectives. The employer contribution rate is made up of two components: Primary rate: the level of contributions sufficient to fund benefits that will be accrued in the future. Secondary rate: the difference between the primary rate and the total contribution rate. This may be in respect of costs associated with accrued benefits or adjustments to achieve the Fund’s stability and affordability objectives. Table 3 shows the combined individual employer contribution rates to be paid into the Fund over the period 1 April 2026 to 31 March 2029. There is also a comparison with the contributions set at the last valuation in 2022. 31 March 2025 31 March 2022 Primary rate 19.5% of pay 19.6% of pay Secondary rate 2026/27 -0.5% 2023/24 4.1% 2027/28 -0.5% 2024/25 4.1% 2028/29 -0.5% 2025/26 4.1% Table 3: Combined employer contribution rates compared with previous valuation The primary rate includes an allowance of 0.8% of pensionable pay for the Fund’s administration and governance expenses (0.8% of pay at the last valuation). Employees pay contributions to the Fund in addition to these rates. The employee contribution rates are set by the LGPS Regulations. On average, employer total contribution rates (ie Primary plus Secondary) have reduced mainly due to higher assumed future investment returns at 2025 compared to 2022. This reduces the estimated cost of funding future benefit payments. Each employer has a contribution rate which is appropriate to their circumstances, and these can be found in the Rates & Adjustments Certificate (Appendix 8). London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 010 3.2 Funding position as at 31 March 2025 Table 4 sets out the assets and liabilities at the valuation date. The results at the 2022 valuation are shown for comparison. The funding position provides a high-level snapshot as at 31 March 2025, but there are limitations: The liabilities are very sensitive to the choice of assumptions about the future The market value of assets held by the Fund will change daily. Employer contribution rates are not set using the reported funding position above. The contribution rates take into consideration how assets and liabilities will evolve over time in different economic scenarios. They also reflect each employer’s funding profile and covenant. The funding position and contribution rates are based on assumptions about future factors such as investment returns, inflation and life expectancy. As these are uncertain, different assumptions are used by each LGPS fund to reflect their own views, circumstances and strategic objectives. These differences (amongst other factors, including crucially the previous funding level and employer affordability and long-term contribution stability) will lead to differences in funding positions and contribution rates across the LGPS. To support comparison, LGPS funds are required to report a funding position on a consistent set of assumptions (called the “SAB funding level”). The Fund’s SAB funding level at 31 March 2025 is 94%. SAB assumptions are to allow comparison only and are not intended to be appropriate for funding or setting contribution rates. As such, this result has no impact on the Fund’s funding strategy or employer contribution rates. Table 4: Single reported funding position compared with the previous valuation The improvement in funding level is primarily due to higher assumed future investment returns at 2025. Chart 2 on the next page provides further information on what’s caused the funding position to change since 2022. 3.3 Other funding metrics The future investment return required to be 100% funded at this valuation is 5.4% p.a. which has increased from the previous valuation (4.9% p.a.). This means, at 31 March 2025, the Fund needed to earn 5.4% p.a. to have enough money to meet accrued benefits at that date. The estimated likelihood of the Fund’s investment strategy achieving the required return is 84% at 31 March 2025 (62% at 2022). Valuation date 31 March 2025 31 March 2022 Assets 1,410 1,263 Liabilities Actives (£m) 282 387 Deferreds (£m) 278 375 Pensioners (£m) 639 668 Surplus / (Deficit) (£m) 211 (167) Funding Level 118% 88% London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 011 Changes since the last valuation – funding position The factors that have caused the funding position to change since the last valuation are split between: actual experience being different from expectations at the last valuation ( known events) changes in assumptions about the future (future expectations). Chart 2 details these factors and their magnitude. Chart 2: Change in funding position since last valuation Surplus at 2022 valuation Expected surplus/deficit at 2025 valuation Surplus/deficit at 2025 valuation Interest on surplus/deficit Benefit increases Contributions net of benefit accrual Investment performance Membership and expense Inflation outlook Other assumptions Investment outlook Known events Future expectations Increase surplus / reduce deficit Reduce surplus / increase deficit Surplus / (Deficit) (£m) West Sussex Pension Fund | Hymans Robertson LLP March 2026 012 Risks and sensitivities London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 013 4. Risks and sensitivities 4.1 Background If all future experience is in line with expectations and there are no changes in the financial or demographic environment, it’s projected that the funding level at the next valuation (31 March 2028) would increase to around 120%. However, the funding position, and the Fund’s funding strategy, are sensitive to various sources of risks. These funding risks broadly fall into categories of economic, demographic, regulatory and other. Identifying and specifying these risks, including analysis of their potential impact, is an important part of the risk management cycle. 4.2 Economic risks Impact of known events The main economic risks are in relation to investment returns, benefit increases (ie Consumer Price Index inflation) and salary increases. For all three sources of risk, the table below details the actual experience since the last valuation compared to 2022 expectations, and the impact on funding. Source Expected Actual Funding impact Investment returns 4.1% p.a. 2.9% p.a. (£53m) Benefit increases 2.7% p.a. 6.1% p.a. (£167m) Salary increases 3.2% p.a. 6.5% p.a. (£15m) Table 5: Impact of known economic events since 2022 Impact of changes in future outcomes The results in this report are based on a set of assumptions about the future outcomes for these economic risks. If the future differs from the assumptions used at this valuation, the Fund’s liabilities may be higher (or lower) than the current estimate. London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 014 Investment returns: Chart 3 below shows how the funding level at 31 March 2025 changes depending on the level of assumed future investment returns. Each point on the line denotes the estimated likelihood of achieving the level of future return at the valuation date. This indicates that the best estimate (return with an estimated 50% likelihood) funding level at 31 March 2025 is around 150%. The Fund’s assumption at this valuation is summarised in Appendix 2 and is illustrated by the solid blue diamond. Benefit increases: if future inflation was 0.1% pa higher than assumed at this valuation, then the funding level would reduce by around 2% (with a c£16m fall in the surplus). Salary increases: if salary increases were 0.5% pa higher than assumed at this valuation then the funding level would reduce by around 1% (with a c£4m fall in the surplus). Chart 3: Impact of future return assumption on funding level Prudence within assumptions Reflecting the sharp change in the economic environment since the last valuation in 2022, the Fund has made allowance for higher assumed future investment returns (compared to the 2022 valuation). However, there is also increased uncertainty within the wider environment due to ongoing geo-political tensions and financial market volatility, alongside additional uncertainty about future long-term UK inflation levels and global financial markets. Therefore, the Fund has increased the level of prudence within funding strategies and contribution rates at the 2025 valuation*. The overall outcome of higher assumed future investment returns, even when combined with higher prudence is, on average, a reduction in employer total contribution rates (ie Primary plus Secondary) at the 2025 valuation. The Fund believes this approach balances the key objectives of affordability and stability of employer contribution rates, whilst ensuring the Fund is solvent over the long-term. Affordability: the Fund has taken into account, and given credit for, higher expected future investment returns which reduces the cost to employers of providing LGPS benefits (all other things being equal). Stability: if the Fund doesn’t achieve the higher level of assumed returns, or future returns expectations reduce, then it doesn’t necessarily mean immediate increases in employer contribution rates in the future. Prudence levels will remain under review and part of the Fund’s wider governance and risk management framework and, given different economic or funding conditions, it may be appropriate to reduce prudence at future valuations to support the Fund’s longer-term aims of stable (and affordable) contributions for employers. * Prudence levels are set out in the Fund’s Funding Strategy Statement and the governance audit trail of these key decisions is documented in Appendix 3. 50%55% 60% 70% 75% 80% 85% 90% 95% 70% 80% 90% 100% 110% 120% 130% 140% 150% 160% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% Funding level Assumed future investment return (% p.a.) London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 015 4.3 Demographic risks Impact of known events The main demographic risk is in relation to life expectancy. The Fund’s mortality experience between the 2022 and 2025 valuations has resulted in the following impact on the funding position, as shown in Table 6. Mortality experience Actual amount of annual pension ceased £3.8m Expected amount of annual pension ceased £3.9m Difference £0.1m Impact on liabilities (£1.2m) Table 6: Impact of member mortality experience since 2022 Impact of changes in future outcomes The results in this report are based on an assumption that in the long-term, the rate of mortality reduces at a rate of 1.5% p.a. If this rate of reduction turned out to be stronger (1.75% p.a. instead of 1.5% p.a.), then members would live longer than expected. In this scenario, the funding level would fall by 1% (with a c£6m fall in the surplus). 4.4 Other risks Regulatory Changes in central government legislation may affect the future cost of the LGPS. For example, the cost to rectify the McCloud discrimination is estimated to be an increase in liabilities of £1m at this valuation. Appendix 2 sets out potential regulatory changes which may impact future pension costs. Climate change Climate change has the potential to make extreme outcomes more likely which could in turn have a significant impact on the funding position. The Fund has carried out separate modelling to assess the potential impact of extreme outcomes on longer term funding. Further details on this are presented in Appendix 4. Post-valuation events The results in this report are as at 31 March 2025. Since this date, asset performance has been positive and the funding position is likely to have improved as a result. However, short-term volatility in the funding position is to be expected due to the Fund’s growth-orientated investment strategy. Given that the Fund aims to set long-term, stable funding strategies and contribution rates, and experience since 31 March 2025 is not abnormal, no allowance has been made for post-valuation events in setting employer contribution rates or the funding position at this valuation. The Fund will continue to monitor the environment in which it participates to understand and manage the impact of any changes. London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 016 Final comments London Borough of Hillingdon Pension Fund | Hymans Robertson LLP London | Birmingham | Glasgow | Edinburgh T 020 7082 6000 | www.hymans.co.uk Hymans Robertson LLP is a limited liability partnership registered in England and Wales with registered number OC310282. Auth orised and regulated by the Financial Conduct Authority and licensed by the Institute and Faculty of Actuaries for a range of inves tment business activities. © Hymans Robertson LLP 2026. All rights reserved. 5. Final comments The Fund’s valuation operates within a broader framework, and this document should be considered alongside the following: The Funding Strategy Statement which (in particular) highlights how different employers in different circumstances have their contributions calculated. The Investment Strategy Statement, which sets out the investment strategy for the Fund. The Fund’s risk register. The general governance of the Fund, including meetings of the Pensions Committee and Local Pensions Board, decisions delegated to officers, the Fund’s business plan, etc. Throughout the valuation, relevant stakeholders in the Fund have been engaged, consulted and communicated with as appropriate . Details of the governance process followed during the valuation are set out in Appendix 3. Under the LGPS regulations, the next formal valuation of the Fund is due to be carried out as at 31 March 2028 where contribution rates payable from 1 April 2029 will be set. March 26 For and on behalf of Hymans Robertson Craig Alexander FFA C.Act London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Appendices London Borough of Hillingdon Pension Fund Appendices Appendix 1: Data Appendix 2: Assumptions Appendix 3: Governance audit trail Appendix 4: Climate change scenario analysis Appendix 5: Section 13 dashboard Appendix 6: Reliances & limitations Appendix 7: Glossary Appendix 8: Rates and Adjustments Certificate Appendix 9: Gender pensions gap London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Appendix 1: Data Membership data The membership data used for the purposes of this valuation was provided by the Administering Authority on 09 July 2025. A summary of the membership data used for this valuation is set out in Table 7, alongside corresponding data from the previous valuation for comparison. The membership numbers in the table relate to the total number of records. The results of this valuation are dependent on the quality of the underlying data used. We have relied on information supplied by the Administering Authority and their administrator as being accurate. We have carried out a series of reasonableness validation checks on the supplied membership data and compared against the Fund’s (unaudited) accounts to confirm its suitability for the purposes of this valuation. More information on how we verify the quality of the data used in the valuation has been shared with the Administering Authority in our report ‘Data Report for the 2025 Valuation’. Whole Fund Membership Data This Valuation 31 March 2025 Last Valuation 31 March 2022 Employee members Number 8,454 8,691 Total actual pay (£000) 198,053 152,450 Total accrued pension (£000) 29,976 23,167 Average age (liability weighted) 56 53 Deferred pensioners (including undecideds) Number 15,172 12,903 Total accrued pension (£000) 27,092 20,151 Average age (liability weighted) 55 53 Pensioners and dependants Number 8,641 7,675 Total pensions in payment (£000) 54,260 42,417 Average age (liability weighted) 71 70 Table 7: Membership data summary London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Investment strategy A summary of the investment strategy allocation used to derive the future assumed investment return is set out in Table 8. This strategy was confirmed by the Administering Authority on 20 January 2025 as appropriate for the purposes of the valuation. Asset data To check the membership data and derive employer asset values, we have used asset and accounting data and employer-level cash flow data provided by the Fund Asset class Allocation Global equities (hedged) 10.1% Global equities (unhedged) 41.2% Emerging market equity 3.2% Private equity 0.3% DGF Low Beta 4.5% Index-linked gilts 7.5% Multi-asset credit 9.4% Infrastructure debt 5.0% Property 13.4% Private lending 4.9% Cash 0.6% Total 100% Table 8: Investment strategy allocation used for the calculation of employer contribution rates. London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Appendix 2: Assumptions To set and agree assumptions for the valuation, the Fund carried out an in-depth analysis and review in April 2025 with the final set noted by the Pensions Committee in July 2025. Summary of assumptions . 31 March 2025 31 March 2022 Financial assumptions Discount rate 6.3% p.a. (75% likelihood of success) 4.1% p.a. (71% likelihood of success) Benefit increases (CPI inflation) 2.3% p.a. 2.7% p.a. Salary increases 2.8% p.a. 3.2% p.a. Demographic assumptions Baseline longevity VitaCurves VitaCurves Longevity future improvements CMI 2024 model with core parameterisation except Initial addition = 0.25% (Male & Female) Long-term rate of improvement 1.5% p.a. CMI 2021 model Initial addition, A = 0.25% (both Male and Female) Smoothing factor, Sk = 7.0 Long-term rate of improvement = 1.5% p.a. Commutation 50% of maximum under HMRC limits 55% of maximum under HMRC limits 50:50 scheme 0% of members elect to change scheme 0.6% of members Retirement age Earliest age at which members can retire with unreduced benefits Family statistics Varying proportion have dependant at death Dependant of a male is 3.5 years younger than him Dependant of a female is 0.6 year older than her Varying proportion have dependant at death Dependant of a male is 3 years younger than him Dependant of a female is 3 year older than her Table 9: Summary of assumptions London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Deriving future investment return likelihoods To derive the distribution of future investment returns and obtain associated estimated likelihoods, we use the Fund’s long -term investment strategy and our Economic Scenario Service (ESS) model. The ESS uses statistical models to generate a future distrib ution of year-on-year returns for each asset class, eg UK equities. The ESS reflects correlations between asset classes and wider economic variables (eg inflation). In the short -term (first few years), the models are fitted with current financial market expectations. Over the longer-term, models are built around our views of fundamental economic parameters, for example equity risk premium, credit -spreads and long-term inflation. Table 10 sets out the individual asset class return distribution of the ESS mod el at 31 March 2025. Annualised total returns Inflation/Yields Time period Percentile Cash Property Index Linked Gilts (medium) UK Equity Developed World ex UK Equity Private Equity Corp Medium A Inflation (CPI) 17 year real yield (CPI) 17 year yield 5 16th 3.5% 0.2% 1.7% 0.1% -0.5% -2.5% 2.5% 1.2% 1.5% 4.8% years 50th 4.3% 6.8% 4.5% 8.2% 8.2% 10.0% 4.9% 2.8% 2.4% 5.8% 84th 5.1% 14.1% 7.5% 16.4% 16.9% 22.8% 7.1% 4.3% 3.3% 7.1% 10 16th 3.6% 2.3% 2.7% 2.5% 2.1% 1.2% 4.5% 0.8% 0.8% 3.9% years 50th 4.6% 7.3% 4.7% 8.6% 8.5% 10.2% 6.0% 2.5% 2.1% 5.3% 84th 5.8% 12.7% 6.9% 14.6% 14.8% 19.6% 7.3% 4.1% 3.3% 7.1% 20 16th 3.1% 3.5% 2.9% 3.8% 3.7% 3.4% 5.5% 0.7% -0.5% 1.6% years 50th 4.5% 7.3% 4.6% 8.4% 8.3% 9.9% 6.5% 2.3% 1.3% 3.6% 84th 6.3% 11.3% 6.4% 12.9% 13.1% 17.0% 7.4% 3.9% 3.0% 6.2% Volatility (1 yr) 0% 15% 7% 16% 19% 27% 7% 1.4% - - Table 10: ESS individual asset class return distributions at 31 March 2025 London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Demographic assumptions The tables below set out sample rates for demographic assumptions at 5-year age intervals. All figures are incidence rates per 1,000 members except salary scale. FT and PT denote full-time and part-time active membership respectively. Males Females Age Salary Scale Death Before Retirement Withdrawals Ill Health Tier 1 Il l Health Tier 2 FT & PT FT PT FT PT FT PT 20 105 0.17 420.48 609.76 0.00 0.00 0.00 0.00 25 117 0.17 277.74 402.77 0.00 0.00 0.00 0.00 30 131 0.20 197.07 285.73 0.00 0.00 0.00 0.00 35 144 0.24 153.97 223.22 0.10 0.07 0.02 0.01 40 151 0.41 123.96 179.66 0.16 0.12 0.03 0.02 45 159 0.68 116.44 168.72 0.35 0.27 0.07 0.05 50 167 1.09 95.98 138.92 0.90 0.68 0.23 0.17 55 173 1.70 75.58 109.45 3.54 2.65 0.51 0.38 60 174 3.06 67.37 97.51 6.23 4.67 0.44 0.33 65 174 5.10 41.35 59.85 11.83 8.87 0.00 0.00 Table 11: Sample rates for demographic assumptions – Males Age Salary Scale Death Before Retirement Withdrawals Ill Health Tier 1 Il l Health Tier 2 FT & PT FT PT FT PT FT PT 20 105 0.10 422.91 411.29 0.00 0.00 0.00 0.00 25 117 0.10 284.56 276.71 0.10 0.07 0.02 0.01 30 131 0.14 238.54 231.92 0.13 0.10 0.03 0.02 35 144 0.24 205.88 200.09 0.26 0.19 0.05 0.04 40 151 0.38 171.35 166.48 0.39 0.29 0.08 0.06 45 159 0.62 159.90 155.33 0.52 0.39 0.10 0.08 50 167 0.90 134.81 130.81 0.97 0.73 0.24 0.18 55 173 1.19 100.59 97.71 3.59 2.69 0.52 0.39 60 174 1.52 81.07 78.65 5.71 4.28 0.54 0.40 65 174 1.95 38.64 37.47 10.26 7.69 0.00 0.00 Table 12: Sample rates for demographic assumptions - Females London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Average life expectancies Based on the longevity assumptions used for the 2025 valuation, Table 13 details the average life expectancy for the Fund’s membership. Average life expectancy 31 March 2025 31 March 2022 Male pensioner 22.2 years 22.3 years Male non-pensioner 22.8 years 23.0 years Female pensioner 24.8 years 24.8 years Female non-pensioner 25.8 years 26.0 years Table 13: Average life expectancies The average life expectancies are from the age of 65. They assume that pensioners are aged 65 at the respective valuation date and non-pensioners are aged 45. Benefit structure Results are based on our understanding of the benefit structure of the LGPS in England and Wales on 31 March 2025 – see www.lgpsregs.org. However, there are areas of uncertainty and potential change. McCloud: in line with the 2022 valuation, we have made an allowance for the cost of these potential improvements, including McCloud data (where available). Further detail on the assumption is available on request. Cost sharing mechanism: we have assumed that there will be no changes required to the LGPS benefit structure due to this mechanism. Guaranteed Minimum Pension equalisation and revaluation: in line with the 2022 valuation, we have assumed that all increases on GMP for members with a State Pension Age after 5 April 2016 will be funded by the Fund. Virgin Media case: we have made no allowance for any impact that the Virgin Media case may have on the LGPS benefit structure. Other benefit changes: there may be benefit changes due to the current “Access and Fairness” consultation. We have not made any allowance for any changes to the benefit structure proposed in this consultation as we would not expect them to be material if implemented. Local Government re-organisation: there may be a change in administering authority and participating employers due to Local-Government re-organisation. Consideration has been given to this potential transition when setting contribution rates for councils, however, final proposals for re-organisation are still under consideration. London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Appendix 3: Governance audit trail The triennial actuarial valuation is a significant exercise carried out by the Fund. This report is a summary of the main outputs from the triennial actuarial valuation. The outputs are the result of funding strategy analysis, discussions and Fund decisions throughout the valuation process. A high-level audit trail of the key funding strategy decisions is set out below. Funding strategy The actuarial assumptions were reviewed by the Fund in April 2025, supported by analytics and other information from the Fund Actuary. The assumptions were agreed by the Fund at the Pensions Committee meeting in May 2025. The funding strategy parametrers, which feed into the setting of employer contribution rates, were considered in stages. Local authorities and academies: review carried out in Q1 2025, including consideration of funding target, funding time horizon, likelihood of success, contribution stability mechanism and interaction with the Fund’s investment strategy. The outcomes were discussed at the June 2025 Pensions Committee meeting. Academies: a full in-depth review of the funding strategy for academy schools was carried out in July 2025. Other employers: the funding strategy for the remaining employers in the Fund was reviewed by the Fund’s Officers in July 2025. Other aspects of the funding strategy, including the approach to cessation valuations, exit credits, bulk transfers and new employers, were reviewed in Q3 2025. The outcomes of these decisions were collated and documented in the Funding Strategy Statement and discussed at the September 2025 Pensions Committee meeting. The final version of the FSS is effective from 1 April 2026. Stakeholder engagement In addition, the Fund has engaged with employers and the Local Pensions Board throughout the valuation exercise. A summary of the engagement is detailed below. Employer forums: the employers forum on 13 November 2025 discussed the key themes of the 2025 valuation. Employer results: a results schedule setting out their 2025 valuation funding position and contribution rate was issued to relevant employers in November 2025. Employers were then offered the opportunity to engage with the Fund to discuss their results. Funding Strategy Statement consultation: the FSS was issued to employers in November 2025 with the opportunity to feed back comments or ask questions to the Fund by 31 January 2026. London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Appendix 4: Climate change scenario analysis Climate change is now widely regarded as one of the main sources of risk for pension funds, with potential implications for future inflation, investment returns and longevity. LGPS funds, given their long-term horizons, may face greater exposure to climate risks – and many stakeholders are asking what more can be done to understand the possible impact of these risks. We have used two sets of scenario analysis to test the resilience of the funding strategy under potential climate-related risks. Scenario analysis helps assess risks and tests the resilience of current and long- term strategies under various scenarios. This helps to identify vulnerabilities across both assets and liabilities. Identification of these vulnerabilities can inform risk management processes helping to ensure that appropriate controls and mitigations are in place. Scenario analysis can therefore also support informed decision making, as well as ensuring compliance with regulations, including TCFD. Scenario approach 1 – Stress testing We take our usual 5000 simulations to see how an LGPS fund could evolve over 20 years. We then consider how quickly the world responds to climate risk in three scenarios (broadly speaking now, later or even later), with the simple assumption that in every case the response leads to intense disruption and a period of heightened market volatility. The scenarios are not explicitly designed to be “good” or “bad”, and we tend to see a modest impact on high level risk metrics. Scenario approach 2 – Narrative driven The new, narrative analysis complements the stress tests by imagining a specific climate-related trigger event and considering how that plays out under three different pathways. We take a specific, extreme, downside risk event (in this instance a shock to the planet’s food supply) that could occur in the coming years. We then map out distinctive potential reactions to the event, considering things like market changes and policy responses and how these may evolve differently over time. This results in three distinct pathways. Challenges and limitations When interpreting the results, users should be aware of the following challenges and limitations in addition to the usual limitations of asset-liability modelling: All of the modelling results are ultimately based on the original 5,000 projections from our core model, so we are implicitly assuming that markets continue to function and that the assumed correlations, risk premia, volatilities etc are still valid. Neither set of climate scenarios is intended to be exhaustive, and other outcomes beyond what the scenarios cover are of course possible Full details and results are included in the 2025 Climate Scenario Analysis results from the Fund’s contribution rate modelling exercise, and further detail on the scenario methodology is included in the 2025 valuation toolkit . London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Climate scenario stress test analysis – output summary Below we set out the quantitative outputs from the ‘stressed’ climate scenarios. These reflect how the Fund may be impacted over the coming years should the world’s response to climate change reflect the one of our three qualitative scenario descriptions. The base case reflects the market having already priced in climate change, but not any one specific climate scenario. Modelling results at 20-year time horizon Metric Base case Green revolution Delayed transition Head in the sand Likelihood of success 79% 78% 75% 76% Worst 5% of outcomes 52% 54% 48% 48% Table 14: Summary modelling results in the base case and stress test scenarios Overall, the impact on likelihood of success is modest over the 20-year horizon, suggesting that the level of prudence in the funding strategy has not been drastically underestimated due to climate risk. There is generally a greater impact on downside risk which is to be expected given that higher volatility will lead to a broader range of outcomes and this means that the worst outcomes get even worse. The stress test scenarios are designed to test the entire range of funding outcomes. The above impact on downside risk suggests that the extremes merit further, dedicated investigation, particularly as climate change has the potential to make “extreme” outcomes more likely. The narrative-driven scenario approach was introduced at the 2025 valuation to complement the stress tests by digging further into potential downside risks. Narrative-driven scenario analysis – output summary The chart below shows the likelihood of success in each of the three narrative scenarios. All of them begin with the same initial shock, and then the results diverge based on different imagined responses. Chart 4: Likelihood of success in the base case and narrative-driven scenarios Over medium time horizons of 5-10 years, we see improvement in the likelihood of success under each of the three scenarios, although all remain below both the base case and the level of success that is required by the Fund. Over longer time horizons of 10+ years we begin to see a divergence in the likelihood of success, with rapid response and technology investment supporting regrowth under the Green Growth and Technological Triumph pathways, but delayed action under Climate Catastrophe, instead leading to prolonged economic and social disruption and a likelihood of success below the Fund’s desired threshold. There is therefore a plausible downside scenario prompted by a climate-related event that would put the Fund’s funding strategy at risk London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Appendix 5: Section 13 dashboard Metric Unit 2025 valuation 2025 funding position – local funding basis Funding level (assets/liabilities) % 118% Funding level (change since previous valuation) % 30% increase Asset value used at the valuation £m 1,410 Value of liabilities (including McCloud liability) £m 1,199 Surplus (deficit) £m 211 Discount rate – past service % p.a. 6.3% Discount rate – future service % p.a. Past service and future service are consistently valued with the same underlying assumptions, methodologies and models regarding future expected levels of inflation, interest rates and investment returns. Assumed pension increase (CPI) % p.a. 2.3% Method of derivation of discount rate, plus any changes since previous valuation There is a 75% likelihood that the Fund's assets will return at least 6.3% over the following the 2025 valuation date.This is the same methodology used for the 2022 valuation but with a higher likelihood (71% at 2022). London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Metric Unit 2025 valuation Assumed life expectancy at age 65 Life expectancy for current pensioners – men age 65 years 22.2 Life expectancy for current pensioners – women age 65 years 24.8 Life expectancy for future pensioners – men age 45 years 22.8 Life expectancy for future pensioners – women age 45 years 25.8 Past service funding position – SAB basis (for comparison purposes only) Market value of asset £m 1,410 Value of liabilities £m 1,507 Funding level on SAB basis (assets/liabilities) % 94% Funding level on SAB basis (change since last valuation) % 4% decrease London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Metric Unit 2025 valuation 2022 valuation Contribution rates payable Primary contribution rate % of pay 19.5% 19.6% Secondary contribution rate (cash amounts in each year) Secondary contribution rate - 1st year of rates and adjustments certificate £m (1.028) 6.682 Secondary contribution rate - 2nd year of rates and adjustments certificate £m (1.057) 6.897 Secondary contribution rate - 3rd year of rates and adjustments certificate £m (1.087) 7.120 Giving total expected contributions Total expected contributions - 1st year of rates and adjustments certificate (£ figure based on assumed payroll) £m 39.778 38.741 Total expected contributions - 2nd year of rates and adjustments certificate (£ figure based on assumed payroll) £m 40.896 39.990 Total expected contributions - 3rd year of rates and adjustments certificate (£ figure based on assumed payroll) £m 42.046 41.279 Assumed payroll (cash amounts in each year) Total assumed payroll - 1st year of rates and adjustments certificate £m 209.647 163.257 Total assumed payroll - 2nd year of rates and adjustments certificate £m 215.541 168.520 Total assumed payroll - 3rd year of rates and adjustments certificate £m 221.601 173.952 3 year average total employer contribution rate % of pay 19.0% 23.7% Average employee contribution % of pay 6.6% 6.7% Employee contribution rate (£ figure based on assumed payroll of £210m) £m p.a. 13.8 10.9 London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Metric Unit 2025 valuation 2022 valuation Deficit recovery and surplus spreading plan Latest deficit recovery period end date, where this methodology is used by the fund’s actuarial advisor Year 0% 0% Earliest surplus spreading period end date, where this methodology is used by the fund’s actuarial advisor Year 0% 0% The time horizon end date, where this methodology is used by the fund’s actuarial advisor Year 2045 2042 The funding plan’s likelihood of success, where this methodology is used by the fund’s actuarial advisor % Minimum 75% Minimum 70% Surplus Methodology Explicit contribution stabilisation mechanism Explicit contribution stabilisation mechanism Surplus methodology & parameters explanation (including changes since previous valuation) Employer contributions are limited to increase/decrease at most by 1% of pay pa to support long-term stability. The Fund has allowed a one-off immediate reduction (outwith the stabilisation parameters) in 2026/27 to support affordability. Employer contributions are limited to increase/decrease at most by 1% of pay pa to support long-term stability.. Additional information Percentage of liabilities relating to employers with deficit recovery periods of longer than 20 years % 0% 0% Percentage of total liabilities that are in respect of Tier 3 employers % 1% 7% Included climate change analysis/comments in the 2025 valuation report Yes Yes London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Gender pension gap statistic - Fund active mean CARE pension GPG % TBC N/A Gender pension gap statistic - Fund active mean combined Final Salary and CARE pension GPG % TBC N/A Gender pension gap statistic - Fund pensioner mean pension GPG % TBC N/A London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Appendix 6: Reliances & limitations We have been commissioned by London Borough of Hillingdon (‘the Administering Authority’) to carry out a full actuarial valuation of London Borough of Hillingdon Pension Fund (‘the Fund’) at 31 March 2025, as required under Regulation 62 of the Local Government Pension Scheme Regulations 2013 (‘the Regulations’). This report is addressed to the Administering Authority. It has been prepared by us as actuaries to the Fund and is solely for the purpose of summarising the main outcomes of the 2025 actuarial valuation. It has not been prepared for any other third party or for any other purpose. We make no representation or warranties to any third party as to the accuracy or completeness of this report, no reliance should be placed on this report by any third party and we accept no responsibility or liability to any third party in respect of it. Hymans Robertson LLP is the owner of all intellectual property rights in this report. All such rights are reserved. This summary report is the culmination of other communications in relation to the valuation, in particular our: 2025 valuation toolkit which sets out the methodology used when reviewing funding plans contriubuton rate modelling, including climate risk analysis, dated March 2025 which discusses the funding strategy for the Fund’s stabilised employers paper dated 30 April 2025 which discusses the valuation assumptions paper dated 20 July 2025 which discussed the funding strategy for academy schools initial results report dated 28 August 2025 which outlines the whole Fund results and inter-valuation experience data report dated March 2026 which summarises the data used for the valuation, the approach to ensuring it is fit for purpose and any adjustments made to it during the course of the valuation The totality of our advice complies with the Regulations as they relate to actuarial valuations. We have also prepared the valuation with regard to the Funding Strategy Statement which details the approach taken by the Fund to fund the current and future benefits due to members. The following Technical Actuarial Standards apply to this advice and have been complied with where material and to a proportionate degree. They are: • TAS100 – Principles for technical actuarial work • TAS300 – Pensions Hymans Robertson LLP is a limited liability partnership registered in England and Wales with registered number OC310282. A list of members of Hymans Robertson LLP is available for inspection at One London Wall, London EC2Y 5EA, the firm’s registered office. Authorised and regulated by the Financial Conduct Authority and licensed by the Institute and Faculty of Actuaries for a range of investment business activities. Hymans Robertson is a registered trademark of Hymans Robertson LLP London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Appendix 7: Glossary 50:50 option An option for LGPS members to pay half employee contributions and earn half the retirement benefit (pre-retirement protection benefits are unreduced). Asset-liability modelling An approach to modelling and understanding risk for a pension fund. The assets and liabilities are projected forwards into the future under many different future scenarios of inflation, investment returns and interest rates. The future scenarios are then analysed to understand the risk associated with a particular combination of contribution rates and investment strategy. Different combinations of contribution rates and/or investment strategies may be tested. Baseline longevity The rates of death (by age and sex) in a given group of people based on current observed data. VitaCurves The assumptions used for baseline longevity. These assumptions are provided by Club Vita, a firm of longevity experts we partner with for longevity analysis. They combine data from thousands of pension schemes and use it to create detailed longevity assumptions at member-level, as well as insight on general longevity trends and future improvements. Commutation The option for members to exchange part of their annual pension for a one-off lump sum at retirement. In the LGPS, every £1 of pension exchanged gives the member £12 of lump sum. The amounts that members commute is heavily influenced by tax rules which set an upper limit on how much lump sum can be taken tax-free. CPI inflation The annual rate of change of the Consumer Prices Index (CPI). The CPI is the UK government’s preferred measure of inflation and is the measure used to increase LGPS (and all other public sector pension scheme) benefits each year. Deferred pensioner A former employee who has left employment (or opted out of the pension fund) but is not yet in receipt of their benefits from the fund. Demographic assumptions Assumptions concerned with member and employer choices rather than macroeconomic or financial factors. For example, retirement age or promotional salary scales. Demographic assumptions typically determine the timing of benefit payments. Discount rate A number used to place a single value on a stream of future payments, allowing for expected future investment returns. Employee (or active) members Members who are currently employed by employers who participate in the Fund and are paying contributions into the Fund. ESS Economic Scenario Service - Hymans Robertson’s proprietary economic scenario generator used to create thousands of simulations of future inflation, asset class returns and interest rates. London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Funding position The extent to which the assets held by the Fund at 31 March 2025 cover the accrued benefits ie the liabilities. The two measures of the funding position are: • the funding level - the ratio of assets to liabilities; and • the funding surplus/deficit - the difference between the asset and liabilities values. Inflation Prices tend to increase over time, which is called inflation. Inflation is measured in different ways, using a different ‘basket’ of goods and mathematical formulas. Liabilities An employer’s liability value is the single value at a given point in time of all the benefit payments expected to be made in future to all members. Benefit payments are projected using demographic and financial assumptions and the liability is calculated using a discount rate. Longevity improvements An assumption about how rates of death will change in future. Typically, we assume that death rates will fall and life expectancies will improve over time, continuing the long-running trend. Pensioner A former employee who is in receipt of their benefits from the fund. This category includes eligible dependants of the former employee. Primary rate The estimated cost of future benefits, expressed in percentage of pay terms. The primary rate will include an allowance to cover the Fund’s expenses. Prudence To be prudent means to err on the side of caution in the overall set of assumptions. We build prudence into the choice of discount rate by choosing an assumption with a prudence level of more than 50%. All other assumptions aim to be best estimate. Prudence level A percentage indicating the likelihood that the assumed rate of investment return will be achieved in practice, based on the ESS model. The higher the prudence level, the more prudent the assumed rate of investment return. Secondary rate An adjustment to the primary rate, generally to reflect costs associated with benefits that have already been earned up to the valuation date. This may be expressed as a percentage of pay and/or monetary amount. Withdrawal Refers to members leaving the scheme before retirement. These members retain an entitlement to an LGPS pension when they retire but are no longer earning new benefits. London Borough of Hillingdon Pension Fund | Hymans Robertson LLP March 2026 Appendix 8: Rates and Adjustments Certificate In accordance with Regulation 62 of the Regulations, we have assessed the contributions that should be paid into the Fund by participating employers for the period 1 April 2026 to 31 March 2029 to maintain the solvency of the Fund. The method and assumptions used to calculate the contributions set out in this Rates and Adjustments Certificate are detailed in the Funding Strategy Statement dated April 2026 and in Appendix 2 of the report on the 2025 actuarial valuation dated 31 March 2026. These assumptions underpin our estimate of the number of members who will become entitled to a payment of pensions under the provisions of the LGPS and the amount of liabilities arising in respect of such members. Table 15 sets out the combined individual employer primary and secondary contribution rates for the period 1 April 2026 to 31 March 2029. The primary rate is the payroll weighted average of the underlying individual employer primary rates and the secondary rate is the total of the underlying individual employer secondary rates, calculated in accordance with the LGPS regulations and CIPFA guidance. The secondary rate has been shown both as a percentage of the projected pensionable pay and the equivalent monetary amount. Table 15: Combined individual employer rates from 1 April 2026 to 31 March 2029 The required minimum contribution rates for each employer in the Fund are set out in the remainder of this certificate. Craig Alexander FFA C. Act 2 March 2026 For and on behalf of Hymans Robertson LLP Primary rate 19.5% of pay Secondary rate % of payroll Equivalent monetary amount 2026/27 -0.5% (1,028,000) 2027/28 -0.5% (1,057,000) 2028/29 -0.5% (1,087,000)

London Borough of Hillingdon Pension Fund London Borough of Hillingdon Pension Fund Funding Strategy Statement April 2026 Effective date 1 April 2026 Previous valuation date 31 March 2025 Date approved 24 March 2026 Next review March 2029 Prepared in accordance with SAB / CIPFA / MHCLG guidance dated January 2025 London Borough of Hillingdon Pension Fund April 2026 Contents London Borough of Hillingdon Pension Fund – Funding Strategy Statement Page 1 Purpose of the London Borough of Hillingdon Pension Fund and the funding strategy statement Error! Bookmark not defined. PART A – Key Funding Principles 4 2 How does the Fund calculate employer contributions? 4 3 What additional contributions may be payable? 8 4 How does the Fund calculate assets and liabilities? 9 PART B – Employer Events 10 5 What happens when an employer joins the Fund? 110 6 What happens if an employer has a bulk transfer of staff? 14 7 What happens when an employer leaves the Fund? 15 8 What are the statutory reporting requirements? 17 Appendices Appendix A – The regulatory framework Appendix B – Roles and responsibilities Appendix C – Glossary Appendix D – Risks and controls Appendix E – Actuarial assumptions Appendix F - Contribution review policy Appendix G - Cessation policy London Borough of Hillingdon Pension Fund April 2026 1 1 Purpose of the London Borough of Hillingdon Pension Fund and the Funding Strategy Statement The Local Government Pension Scheme (LGPS) regulations require funds to maintain and publish a funding strategy statement (FSS). According to the Ministry for Housing, Communities and Local Government (MHCLG) the purpose of the FSS is to document the processes the administering authority uses to: • establish a clear and transparent fund -specific strategy identifying how employers’ pension liabilities are best met going forward • support the desirability of maintaining as constant and stable primary contribution rate as possible, as defined in Regulation 62(5) of the LGPS Regulations 2013 • ensure that the regulatory requirements to set contributions to ensure the solvency and long -term cost efficiency of the fund are met • explain how the fund balances the interests of different employers • explain how the fund deals with conflicts of interest and references other policies/strategies . You can find more information about the LGPS at www.lgpsmember.org and about the regulatory framework in Appendix A. This document sets out the FSS for London Borough of Hillingdon Pension Fund (the Fund). If you have any queries about the FSS, contact pensions@hillingdon.gov.uk. The London Borough of Hillingdon Pension Fund is part of the Local Government Pension Scheme (LGPS) and is administered by the London Borough of Hillingdon, known as the administering authority. The administering authority runs the Fund on behalf of participating employers, their employees and current and future pensioners. You can find out more about roles and responsibilities in Appendix B. London Borough of Hillingdon worked with the fund’s actuary, Hymans Robertson, to prepare this FSS which is effective from 1 April 2026, and is expected to remain in force until 31 March 2029 at the latest, unless an interim review is carried out prior to then. LGPS Regulations (specifically Regulation 62) require an actuarial valuation to be carried out every three years, under which contribution rates for all participating employers are set for the following three years. This FSS sets out the assumptions and methodology underp inning the 2025 actuarial valuation actuarial exercise. 1.1 What are the funding strategy objectives? The funding strategy objectives are to: • take a prudent long-term view to secure the regulatory requirement for long-term solvency, with sufficient funds to pay benefits to members and their dependants • use a balanced investment strategy to minimise long-term cash contributions from employers and meet the regulatory requirement for long-term cost efficiency • where appropriate, ensure stable employer contribution rates • reflect different employers’ characteristics to set their contribution rates, using a transparent funding strategy • use reasonable measures to reduce the risk of an employer defaulting on its pension obligations. London Borough of Hillingdon Pension Fund April 2026 2 The Fund engages with employers when developing funding strategy in a way which balances the risk appetite of stakeholders. The funding strategy therefore reflects the specific characteristics of its fund employers and its own investment strategy. 1.2 Who is the FSS for? The FSS is mainly for employers participating in the Fund, because it sets out how money will be collected from them to meet the Fund’s obligations to pay members’ benefits. Different types of employers participate in the Fund: Scheduled bodies Employers who are specified in a schedule to the LGPS regulations, including councils and employers like academies and further education establishments. Scheduled bodies must give employees access to the LGPS if they can’t accrue benefits in another pension scheme, such as another public service pension scheme. Designating employers (otherwise known as Resolution bodies) Employers like town and parish councils can join the LGPS through a resolution. If a resolution is passed, the Fund can’t refuse entry. The employer then decides which employees can join the scheme. Admission bodies Other employers can join through an admission agreement. The Fund can set participation criteria for them and can refuse entry if the requirements aren’t met. This type of employer includes contractors providing outsourced services like cleaning or catering to a scheduled body. Some existing employers may be referred to as community admission bodies (CABs). CABs are employers with a community of interest with another scheme employer. Others may be called transferee admission bodies (TABs), that provide services for scheme employers. These terms aren’t defined under current regulations but remain in common use from previous regulations. The Scheme Advisory Board refer to three different tiers of employers which may participate in the LGPS, specifically: • Tier 1 – Local Authorities (including contractors participating in the LGPS with Local Authority backing) • Tier 2 – Academy Trusts and Further Education Institutions (Colleges). • Tier 3 – Standalone employers with no local or national taxpayer backing. Include universities, housing associations and charities. 1.3 How is the funding strategy specific to the London Borough of Hillingdon Pension Fund? The funding strategy reflects the specific characteristics of the Fund employers and its own investment strategy. 1.4 How often is the Funding Strategy Statement reviewed? The FSS is reviewed in detail at least every three years ahead of the triennial actuarial valuation and an annual check is carried out in the intervening years. Any amendments will be consulted on and approved by the Pensions Committee. Amendments to the FSS may be in the following circumstances: • material changes to the scheme benefit structure (e.g. HM Treasury-led) • on the advice of the fund actuary London Borough of Hillingdon Pension Fund April 2026 3 • significant changes to investment strategy or if there has been significant market volatility which impacts the FSS or goes beyond FSS expectation • if there have been significant changes to the fund membership and/or Fund maturity profile • if there have been significant or notable changes to the number, type, or individual circumstances of any of the employing authorities to such an extent that they impact on the funding strategy (e.g exit/restructuring/failure) which could materially impact cashflow and/or maturity profile and/or covenant) • if there has been a material change in the affordability of contributions and/or employer(s) financial covenant strength which has an impact on the FSS. • recommendations from MHCLG/GAD. In undertaking such reviews, the administering authority should consider: • looking at experiences in relation to long-term funding assumptions (in terms of both investment income and forecast contributions income) and consequences of actions taken by employers (e.g. pay awards and early retirements) • the implications for the funding strategy and, if significant, determine what action should be taken to review the FSS • the implications arising from the funding strategy for meeting the liabilities of individual employers and any amendments required to the ISS • consulting with individual employers specifically impacted by any changes as an integral part of the monitoring and review process A review won’t necessarily lead to rates changes for individual employers but could impact admissions, terminations, approach to managing risk and employer risk assessment. 1.5 Links to Administration Strategy The Fund maintains an Administration Strategy Statement which outlines the responsibilities, standards and procedures for employers and the Fund. A copy of this can be found in the Documents and Policies section of the Fund’s website here. Adherence with the requirements of the Administration Strategy Statement is crucial to ensure the well -running of the pension Fund and any failure to do so may lead to uncertainty around the value of an employer’s liabilities and the need for prudent assumptions to fill any data gaps. 1.6 Actuarial valuation report The actuarial valuation report sets out 1) the actuary’s assessment of the past service funding position, and 2) the contributions required to ensure full funding by the end of the time horizon. The Rates and Adjustments certificate shows the contribution rates payable by each employer (which may be expresse d as a percentage of payroll and/or monetary amounts). London Borough of Hillingdon Pension Fund April 2026 4 PART A – Key Funding Principles 2 How does the Fund calculate employer contributions? 2.1 Calculating contribution rates Employee contribution rates are set by the LGPS regulations. Employer contributions rates are determined by a mandatory actuarial valuation exercise and are made up of the following elements: • the primary contribution rate – contributions payable towards future benefits • the secondary contribution rate – the difference between the primary rate and the total employer contribution The primary rate also includes an allowance for the Fund’s expenses. The fund actuary uses a model to project each employer’s asset share over a range of future economic scenarios. The contribution rate takes each employer’s assets into account as well as the projected benefits due to their members. The value of the projected benefits is worked out using employer membership data and the assumptions in Appendix E. The total contribution rate for each employer is then based on: • the funding target – how much money the Fund aims to hold for each employer • the time horizon – the time over which the employer aims to achieve the funding target • the likelihood of success – the proportion of modelled scenarios where the funding target is met. This approach takes into account the maturing profile of the membership when setting employer contribution rates. The approach taken by the fund actuary helps the Fund meet the aim of maintaining as stable a primary employer contribution rate as possible. 2.2 The contribution rate calculation Table 1: contribution rate calculation for individual or pooled employers Type of employer Scheduled bodies CABs and designating employers TABs Sub-type Local authorities Academies, Colleges Other Scheduled Bodies Open to new entrants Closed to new entrants (all) SAB Tier Tier 1 Tier 2 Tier 3 Tier 3 Tier 3 Tier 1 Funding target* Ongoing Ongoing Ongoing Ongoing, but may move to low-risk exit basis Ongoing London Borough of Hillingdon Pension Fund April 2026 5 Minimum likelihood of success 75% 75% 75% 75% 75% 75% Maximum time horizon 20 years 20 years 20 years 20 years 15 years 15 years Primary rate approach** The contributions must be sufficient to meet the cost of benefits earned in the future with the required likelihood of success at the end of the time horizon, expressed as a percentage of pensionable pay Secondary rate The difference between the total contribution rate payable (determined as per 2.1) and the primary rate. Negative adjustments are expressed as a percentage of payroll and positive adjustments can be expressed as a percentage of payroll or monetary amounts (for mature closed employers). Stabilised contribution rate? Yes Yes No No No No Treatment of surplus (assessed at valuation date) Covered by stabilisation arrangement Total contribution rate must be set at least at the primary rate. However, reductions may be permitted by the administering authority subject to additional consideration of the low-risk exit basis position. Phasing of contribution changes Covered by stabilisation arrangement 3 years * See Appendix E or further information on funding targets. ** The Primary Rate for all employer has been calculated using an 80% likelihood of success. The Primary Rate for the Whole Fund is the weighted average (by payroll) of the individual employers’ primary rates Employers participating in the Fund under a pass-through agreement will pay a contribution rate as agreed between the contractor and letting employer, subject to administering authority approval. For pass-through arrangements let by London Borough of Hillingdon, the contribution rate is set at 2 1% of pay. The Fund manages funding risks as part of the wider risk management framework, as documented in the Fund’s risk register. The funding-specific risks identified and managed by the Fund are set out in Appendix D – Risks and Controls. 2.3 Making contribution rates stable Making employer contribution rates reasonably stable is an important funding objective. Where appropriate, contributions are set with this objective in mind. The Fund may adopt a stabilised approach to setting contributions for individual employers, which keeps contribution variations within a pre -determined range from year-to-year. Stabilisation criteria and limits are reviewed during each triennial valuation process. The administering authority believes a stabilised approach remains a prudent long -term strategy and the robustness of this approach was once again tested by extensive asset liability modelling (ALM) carried out by the Fund actuary at the 31 March 2025 funding valuation. London Borough of Hillingdon Pension Fund April 2026 6 Table 2: current stabilisation approach Type of employer Local authorities, academies, colleges Maximum contribution increase per year +1% of pay* Maximum contribution decrease per year -1% of pay* *The administering authority may exercise discretion over the phasing of annual contribution rate increases or decreases subject to a maximum increase/decrease of 3% of pay over the 3 -year inter-valuation period. At the 2025 funding valuation only, some stabilised employers, in light of sustained past service funding position improvements, may experience a 2026/27 total contribution rate change of greater than 3% of pay when compared to their 2025/26 total contribution rate. 2.4 How does the funding strategy link to the investment strategy The funding strategy sets out how money will be collected from employers to meet the Fund’s obligations. Contributions, assets and other income are then invested according to an investment strategy set by the administering authority. You can find the Fund’s investment strategy in its Investment Strategy Statement (ISS) here. The funding and investment strategies are closely linked. The Fund must be able to pay benefits when they are due – those payments are met from a combination of contributions (through the funding strategy) and asset returns and income (through the investment strategy). If investment returns or income fall short the Fund won’t be able to pay benefits, so higher contributions would be required from employers. The investment strategy is set considering the Fund’s long-term funding requirements and its investment risk appetite. The fund’s current strategic investment strategy is summarised in the table, with full details available set out in the ISS. Asset class Allocation Equities 57% Index Linked Gilts 7% Private Credit 8% Property 8% Infrastructure 8% ESG Impact 5% Multi Asset Credit 7% Cash 0% 2.5 Does the funding strategy reflect the investment strategy? The funding policy is consistent with the investment strategy. Future investment return expectations are set with reference to the investment strategy, including a margin for prudence which is consistent with the regulatory requirement that Funds take a ‘prudent longer-term view’ of funding liabilities (see Appendix A) London Borough of Hillingdon Pension Fund April 2026 7 2.6 Reviewing contributions between valuations The Fund may amend contribution rates between formal valuations, in line with its policy on contribution reviews. The Fund’s policy is available in Appendix F. The purpose of any review is to establish the most appropriate contributions. A review may lead to an increase or decrease in contributions. 2.7 What is pooling for funding and contribution rate purposes? A single contribution rate is payable by all employers in the pool and individual funding positions are not tracked. All schools within a single multi-academy trust are pooled for funding and contribution rate purposes. 2.8 What is pooling for contribution rate purposes only? A single contribution rate is payable by all employers in the pool and individual funding positions are tracked, by the Fund actuary. Contribution rates can be volatile for smaller employers that are more sensitive to individual membership changes, pooling across a group of employers minimises this. As individual funding positions are tracked, some employers may be better funded or more poorly funded than the pool average. In this type of pooling arrangement, employers do not target full funding at exit. If an employer leaves the Fund, the cessation valuation is based on their own funding position rather than the pool average. CABs that are closed to new entrants aren’t usually allowed to enter a pool. TABs are usually also ineligible for pooling (with other TABs). Where pass-through is in place, a TAB will be pooled with the letting authority. 2.9 Administering authority discretion Individual employers may be affected by circumstances not easily managed within the FSS rules and policies. If this happens, the administering authority may adopt alternative funding approaches on a case -by-case basis. Additionally, the administering authority may allow greater flexibility to the employer’s contributions if added security is provided. Flexibility could include things like a reduced contribution rate, extended time horizon, or permission to join a pool. Added security may include a suitable bond, a legally binding guarantee from an appropriate third party, or security over an asset. The Fund may, at its absolute discretion, permit the prepayment of employer contributions in specific circumstances. 2.10 Non cash funding The Fund will not accept any form of non-cash assets in lieu of contributions. 2.11 Managing surpluses and deficits The funding strategy is designed to ensure that all employers are at least fully funded on a prudent basis at the end of their own specific time horizon. The uncertain and volatile nature of pension scheme funding means that it is likely there will be times when employers are in surplus and times when employers are in deficit. The funding strategy recognises this by 1) including sufficient prudence to manage the effect of this over the time horizon, and 2) making changes to employer contribution rates to ensure the funding strategy objectives are met. London Borough of Hillingdon Pension Fund April 2026 8 Fluctuations in funding positions are inevitable over the time horizon, due to market movements and changing asset values, which could lead to the emergent of deficits and surplus from time to time, and lead to changes in employer contribution rates. London Borough of Hillingdon Pension Fund April 2026 9 3 What additional contributions may be payable? 3.1 Pension costs – awarding additional pension and early retirement on non-ill-health grounds If an employer awards additional pension as an annual benefit amount, they pay an additional contribution to the Fund as a single lump sum. The amount is set by guidance issued by the Government actuary’s Department and updated from time to time. If an employee retires before their normal retirement age on unreduced benefits, employers will be asked to pay additional contributions called strain payments. Employers typically make strain payments as a single lump sum, though strain payments may be spread over an appropriate period if the administering authority agrees. 3.2 Pension costs – early retirement on ill-health grounds If a member retires early due to ill-health, an additional funding strain will usually arise, which can be very large. Such strain costs are the responsibility of the member’s employer to pay. To mitigate this risk, individual employers may elect to use external insurance. London Borough of Hillingdon Pension Fund April 2026 10 4 How does the Fund calculate assets and liabilities? 4.1 How are employer asset shares calculated? The Fund adopts a cashflow approach to track individual employer assets. Each Fund employer has a notional share of the Fund’s assets, which is assessed yearly by the actuary. The actuary starts with assets from the previous year-end, adding cashflows paid in/out and investment returns to give a new year-end asset value. The fund actuary makes a simplifying assumption, that all cashflow and investment returns have been paid uniformly over the year. This assumption means that the sum of all employers’ asset values is slightly different from the Whole Fund asset total over time. This minimal difference is split between employers in proportion to their asset shares at each valuation. If an employee moves one from one employer to another within the Fund, assets equal to the cash equivalent transfer value (CETV) will move from the original employer to the receiving employer’s asset share. These are calculated on an annual basis. Alternatively, if employees move when a new academy is formed or an outsourced contract begins, the fund actuary will calculate assets linked to the value of the liabilities transferring. 4.2 How are employer liabilities calculated? The Fund holds membership data for all active, deferred and pensioner members. Based on this data and the assumptions in Appendix E, the fund actuary projects the expected benefits for all members into the future. This is expressed as a single value – the liabilities – by allowing for expected future investment returns. Each employer’s liabilities reflect the experience of their own employees and ex-employees. 4.3 What is a funding level? An employer’s funding level is the ratio of the market value of asset share against liabilities. If this is less than 100%, the employer has a shortfall: the employer’s deficit. If it is more than 100%, the employer is in surplus. The amount of deficit or surplus is the difference between the asset value and the liabilities value. Funding levels and deficit/surplus values measure a particular point in time, based on a particular set of future assumptions. While this measure is of interest, for most employers the main issue is the level of contributions payable. The funding level does not directly drive contribution rates. See section 2 for further information on rates. London Borough of Hillingdon Pension Fund April 2026 11 PART B – Employer Events 5 What happens when an employer joins the Fund? 5.1 When can an employer join the Fund Employers can join the Fund if they are a new scheduled body or a new admission body. New designated employers may also join the Fund if they pass a designation to do so. On joining, the Fund will determine the assets and liabilities for that employer within the Fund. The calculation will depend on the type of employer and the circumstances of joining. A contribution rate will also be set. This will be set in accordance with the calculation set out in Section 2, unless alternative arrangements apply (for example, the employer has agreed a pass-through arrangement). More details on this are in Section 5.3 below. 5.2 New academies Academies converting from local authority status For an academy converting from local authority status, only active members of the former local authority school transfer to the new academy. Liabilities for transferring active members will be calculated (on the ongoing basis) by the Fund actuary on the day before conversion to an academy. Liabilities relating to the converting school’s former employees (ie members with deferred or pensioner status) remain with the ceding council. New academies will be allocated an asset share based on the estimated funding level of the ceding council’s active members, having first allocated the council’s assets to fully fund their deferred and pensioner members. This funding level will then be applied to the transferring liabilities to calculate the academy’s initial asset share, capped at a maximum of 100%. The council’s estimated funding level will be based on market conditions on the day before conversion. New academies joining the Fund will fall into one of the below categories: a) one of multiple academies within the Fund who are part of a multi-academy trust (a “MAT”); b) be a single academy trust (a “SAT”); or c) a standalone employer where they are the only academy within the Fund who are a part of a MAT (and the other academies in the MAT do not participate within the London Borough of Hillingdon Fund). If the academy joins an existing MAT in the Fund, the assessed assets and liabilities are added to the MAT funding pool, and the academy will pay the MAT contribution rate. This approach represents full risk -sharing of past and future service costs. If the new academy is a SAT or standalone employer, then the actuary will need to calculate the contribution rate to be paid on conversion. If an academy leaves one MAT and joins another, all active, deferred and pensioner members transfer to the new MAT. Newly set up academies (including free schools and studio schools) Free schools do not transfer active members from a converting school but must allow new active members (non-teaching staff) to transfer in any eligible service. Newly set up academies (including free schools and studio schools) will fall into one of the below categories: London Borough of Hillingdon Pension Fund April 2026 12 • if the academy joins an existing MAT in the Fund, becomes part of the MAT funding pool and will pay the MAT contribution rate. • if the academy is sponsored by another employer within the Fund, it becomes part of the sponsoring employer’s funding pool and will pay the sponsoring employer’s contribution rate. • if the academy is standalone, the actuary will calculate the contribution rate to be paid. The Fund’s academy policy can be found in the Documents and Policies section of the Fund’s website here. 5.3 New admission bodies as a results of outsourcing services New admission bodies usually join the Fund because an existing employer (usually a scheduled body like a council or academy) outsources a service to another organisation (a contractor). This involves TUPE transfers of staff from the letting employer to the contractor. The contractor becomes a n ew participating Fund employer for the duration of the contract and transferring employees remain eligible for LGPS membership. At the end of the contract, employees typically revert to the letting employer or a replacement contractor. Liabilities for transferring active members will be calculated by the fund actuary on the day before the outsourcing occurs. New contractors will be allocated an asset share equal to the value of the transferring liabilities. The admission agreement may set a different initial asset allocation, depending on contract-specific circumstances. There is flexibility for outsourcing employers when it comes to pension risk potentially taken on by the contractor. You can find more details on outsourcing options from the administering authority or in the contract admission agreement. 5.4 Other new employers There may be other circumstances that lead to a new admission body entering the Fund, e.g. set up of a wholly owned subsidiary company by a local authority. Calculation of assets and liabilities on joining and a contribution rate will be carried out allowing for the circumstances of the new employer. New designated employers may also join the Fund. Contribution rates will be set using the same approach as any other designated employers in the Fund. 5.5 Risk assessment for new admission bodies Under the LGPS regulations, a new admission body must assess the risks it poses to the fund if the admission agreement ends early, for example if the admission body becomes insolvent or goes out of business. In practice, the fund actuary assesses this because the assessment must be carried out to the administering authority’s satisfaction. After considering the assessment, the administering authority may decide the admission body must provide security, such as a guarantee from the letting employer, an indemnity or a bond. This must cover some or all of the: • strain costs of any early retirements, if employees are made redundant when a contract ends prematurely • allowance for the risk of assets performing less well than expected • allowance for the risk of liabilities being greater than expected • allowance for the possible non-payment of employer and member contributions • admission body’s existing deficit. London Borough of Hillingdon Pension Fund April 2026 13 Where an academy is the letting employer, the Fund will expect academies to ensure and confirm that the outsourcing complies with the requirements set out in the DfE Academy Trust LGPS Guarantee policy before permitting an admission body in the Fund. Where this requirement is met, no additional risk assessment or security will typically be required for the admitted body as the pension liabilities will be covered by the DfE Academy Guarantee. Please contact the Fund for future details on admission policy and guidance. London Borough of Hillingdon Pension Fund April 2026 14 6 What happens if an employer has a bulk transfer of staff? Bulk transfer cases will be looked at individually, but generally: • the Fund won’t pay bulk transfers greater in value than either the asset share of the transferring employer in the fund, or the value of the liabilities of the transferring members, whichever is lower • the Fund won’t grant added benefits to members bringing in entitlements from another Fund, unless the asset transfer is enough to meet the added liabilities • the Fund may permit shortfalls on bulk transfers if the employer has a suitable covenant and commits to meeting the shortfall in an appropriate period, which may require increased contributions between valuations. London Borough of Hillingdon Pension Fund April 2026 15 7 What happens when an employer leaves the Fund? 7.1 What is a cessation event? Triggers for considering cessation from the Fund are: • the last active member stops participation in the Fund • insolvency, winding up or liquidation of the admission body • a breach of the agreement obligations that isn’t remedied to the Fund’s satisfaction • failure to pay any sums due within the period required • failure to renew or adjust the level of a bond or indemnity, or to confirm an appropriate alternative guarantor • termination of a deferred debt arrangement (DDA). The administering authority, at its discretion, can defer triggering a cessation for up to three years by issuing a suspension notice. That means cessation won’t be triggered if the employer takes on one or more active members during the agreed time. If no DDA exists, the administering authority will instruct the fund actuary to carry out a cessation valuation to calculate if there is a surplus or a deficit when the Fund leaves the scheme. 7.2 What happens on cessation? The administering authority must protect the interests of the remaining Fund employers when an employer leaves the scheme. The actuary aims to protect remaining employers from the risk of future loss. The funding target adopted for the cessation calculation is below. These are defined in Appendix E. (a) Where there is no guarantor, cessation liabilities and a final surplus/deficit will usually be calculated using a low-risk basis, which is more prudent than the ongoing participation basis. (b) Where there is a guarantor, the guarantee will be considered before the cessation valuation. Where the guarantor is a guarantor of last resort this will have no effect on the cessation valuation. If this isn’t the case (i.e. if the guarantee continues to apply in respect of the former employer’s obligations post cessation), cessation may be calculated using the same basis that was used to calculate liabilities (and the corresponding asset share) on joining the Fund. (c) Depending on the guarantee, it may be possible to transfer the employer’s liabilities and assets to the guarantor without crystallising deficits or surplus. This may happen if an employer can’t pay the contributions due and the approach is within guaranteed terms. This is known as ‘subsumption’ of the assets and liabilities. If the Fund can’t recover the required payment in full, unpaid amounts will be paid by the related letting authority (in the case of a ceased admission body) or shared between the other Fund employers. This may require an immediate revision to the rates and adjustments certificate or be reflected in the contribution rates set at the next formal valuation. The fund actuary charges a fee for cessation valuations and there may be other cessation expenses. Fees and expenses are at the employer’s expense. The cessation policy is in Appendix G. London Borough of Hillingdon Pension Fund April 2026 16 7.3 What happens if there is a surplus? If the cessation valuation shows the exiting employer has more assets than liabilities – an exit credit – the administering authority can decide how much (if any) will be paid back to the employer based on: • the surplus amount • the proportion of the surplus due to the employer’s contributions over the employer’s period of participation in the Fund • any representations (like risk sharing agreements or guarantees) made by the exiting employer and any employer providing a guarantee or some other form of employer assistance/support • any other relevant factors. The exit credit policy is covered in the cessation policy in Appendix G. 7.4 What happens if there is a deficit? If there is a deficit, full payment will usually be expected in a single lump sum or: • spread over an agreed period, if the employer enters into a deferred spreading agreement (DSA) • if an exiting employer enters into a deferred debt agreement (DDA), it stays in the Fund and pays contributions until the cessation debt is repaid. Payments are reassessed at each formal valuation. The employer flexibility on exit policy is covering in the cessation policy in Appendix G. 7.5 What if an employer has no active members? When employers leave the Fund because their last active member has left, they may pay a cessation debt, receive an exit credit or enter a DDA/DSA. Beyond this they have no further obligation to the Fund and either: a) their asset share runs out before all ex-employees’ benefits have been paid. The other Fund employers will be required to contribute to the remaining benefits. The fund actuary will portion the liabilities on a pro-rata basis based on each employer’s share of overall liabilities at each formal valuation. b) the last ex-employee or dependant dies before the employer’s asset share is fully run down. The fund actuary will apportion the remaining assets to the other Fund employers based on each employer’s share of overall liabilities at each formal valuation. London Borough of Hillingdon Pension Fund April 2026 17 8 What are the statutory reporting requirements? 8.1 Reporting regulations The Public Service Pensions Act 2013 requires the Government actuary’s Department to report on LGPS Funds in England and Wales after every three-year valuation, in what’s usually called a section 13 report. The report includes advice on whether the following aims are achieved: • Compliance • Consistency • Solvency • Long term cost efficiency 8.2 Solvency Employer contributions are set at an appropriate solvency level if the rate of contribution targets a funding level of 100% over an appropriate time, using appropriate assumptions compared to other Funds. Either: (a) employers collectively can increase their contributions, or the Fund can realise contingencies to target a 100% funding level; or (b) there is an appropriate plan in place if there is, or is expected to be, a reduction in employers’ ability to increase contributions as needed. 8.3 Long-term cost efficiency Employer contributions are set at an appropriate long-term cost efficiency level if the contribution rate makes provision for the cost of current benefit accrual, with an appropriate adjustment for any surplus or deficit. To assess this, the administering authority may consider absolute and relative factors. Relative factors include: 1. comparing LGPS Funds with each other 2. the implied deficit recovery period 3. the investment return required to achieve full funding after 20 years. Absolute factors include: 1. comparing Funds with an objective benchmark 2. the extent to which contributions will cover the cost of current benefit accrual and interest on any deficit 3. how the required investment return under relative considerations compares to the estimated future return targeted by the investment strategy 4. the extent to which contributions paid are in line with expected contributions, based on the rates and adjustment certificate 5. how any new deficit recovery plan reconciles with, and can be a continuation of, any previous deficit recovery plan, allowing for Fund experience. These metrics may be assessed by GAD on a standardised market-related basis where the Fund’s actuarial bases don’t offer straightforward comparisons. Standard information about the Fund’s approach to solvency of the pension Fund and long-term cost efficiency will be provided in a uniform dashboard format in the valuation report to facilitate comparisons between Funds. London Borough of Hillingdon Pension Fund April 2026 18 Appendices Appendix A – The regulatory framework A1 Why do Funds need a funding strategy statement? The Local Government Pension Scheme (LGPS) regulations require Funds to maintain and publish a funding strategy statement (FSS). The purpose of the FSS was set out in Section 1. To prepare this FSS, the administering authority has used guidance jointly prepared by the Scheme Advisory Board (SAB), MHCLG, and by the Chartered Institute of Public Finance and Accountancy (CIPFA) dated January 2025. The Fund has a fiduciary duty to scheme members and obligations to employers to administer the scheme competently to keep employer contributions at an affordable level. The funding strategy statement sets out how the Fund meets these responsibilities. A2 Consultation Both the LGPS regulations and most recent CIPFA guidance state the FSS should be prepared in consultation with “persons the authority considers appropriate”. This should include ‘meaningful dialogue… with council tax raising authorities and representatives of other participating employers’. In practice, for the Fund, the consultation process for this FSS was as follows: a) A draft version of the FSS was issued to all participating employers and the Local Pensions Board in December 2025 for comment. b) Comments were requested by 19/12/2025 a) Following the end of the consultation period the FSS was updated where required and then published, in MMYY The fund also shared the draft FSS with the Department for Education. A3 How is the FSS published? The FSS is published on the Fund’s website at www.hillingdon.gov.uk/pension-fund-documents and copies are made available on request. A4 How does the FSS fit into the overall Fund documentation? The FSS is a summary of the Fund’s approach to funding liabilities and isn’t exhaustive. The Fund publishes other statements like the Investment Strategy Statement and the Fund’s annual report and accounts also includes up-to-date Fund information. You can see all Fund documentation at www.hillingdon.gov.uk/pension-fund-documents. London Borough of Hillingdon Pension Fund April 2026 19 1.1 Appendix B – Roles and responsibilities B1 The administering authority is required to: 1. operate a pension Fund 2. collect employer and employee contributions, investment income and other amounts due to the pension Fund as stipulated in LGPS Regulations 3. have an escalation policy in situations where employers fail to meet their obligations 4. pay from the pension Fund the relevant entitlements as stipulated in LGPS Regulations 5. invest surplus monies in accordance with the relevant regulations 6. ensure that cash is available to meet liabilities as and when they fall due 7. ensure benefits paid to members are accurate and undertake timely and appropriate action to rectify any inaccurate benefit payments take measures as set out in the regulations to safeguard the Fund against the consequences of employer default 8. take measures as set out in the regulations to safeguard the fund against the consequences of employer default 9. manage the valuation process in consultation with the Fund’s actuary 10. prepare and maintain an FSS and associated funding policies and ISS, after proper consultation with interested parties 11. monitor all aspects of the Fund’s performance and funding, and amend the FSS/ISS accordingly 12. establish a policy around exit payments and payment of exit credits/debits in relation to employer exits 13. effectively manage any potential conflicts of interest arising from its dual role as both Fund administrator and scheme employer 14. enable the local pension board to review the valuation and FSS review process and as set out in their terms of reference 15. support and monitor a Local Pension Board (LPB) as required by the Public Service Pensions Act 2013, the Regulations and the Pensions Regulator’s relevant Code of Practice B2 Individual employers are required to: 1. ensure staff who are eligible are contractually enrolled and deduct contributions from employees’ pay correctly after determining the appropriate employee contribution rate (in accordance with the Regulations), 2. provide the Fund with accurate data and understand that the quality of the data provided to the Fund will directly impact on the assessment of their liabilities and their contributions. In particular, any deficiencies in their data may result in the employer paying higher contributions than otherwise would be the case if their data was of high quality 3. pay all ongoing contributions, including employer contributions determined by the actuary and set out in the rates and adjustments certificate, promptly by the due date 4. develop a policy on certain discretions and exercise those discretions as permitted within the regulatory framework London Borough of Hillingdon Pension Fund April 2026 20 5. make additional contributions in accordance with agreed arrangements in respect of, for example, augmentation of scheme benefits and early retirement strain 6. notify the administering authority promptly of all changes to active membership that affect future funding 7. Pay any exit payments on ceasing participation in the Fund timely provide the Fund with accurate data and understand that the quality of the data provided to the Fund will directly impact on the assessment of their liabilities and their contributions. In particular, any inaccuracies in data may result in the employer paying higher contributions than otherwise would be the case if their data was of high qualit y. B3 The fund actuary should: 1. prepare valuations including the setting of employers’ contribution rates at a level to ensure Fund solvency and long-term cost efficiency based on the assumptions 26 set by the administering authority and having regard to the FSS and the LGPS Regulations 2. provide advice so the Fund can set the necessary assumptions for the valuation • prepare advice and calculations in connection with bulk transfers and the funding aspects of individual benefit -related matters such as pension strain costs, ill health retirement costs, compensatory added years costs, etc 3. provide advice and valuations to the Fund so that it can make decisions on the exit of employers from the Fund 4. provide advice to the Fund on bonds or other forms of security against the financial effect on the Fund of employer default 5. assist the Fund in assessing whether employer contributions need to be revised between valuations as permitted or required by the regulations 6. ensure that the Fund is aware of any professional guidance or other professional requirements that may be relevant in the role of advising the Fund. 7. identify to the Fund and manage any potential conflicts of interest that may arise in the delivery the contractual arrangements to the Fund and other clients. B4 Local Pension Boards (LPB): Local Pension Boards have responsibility to assist the administering authority to secure compliance with the LGPS regulations, other legislation relating to the governance and administration of the LGPS, any requirements imposed by the Regulator in relation to the LGPS, and to ensure the effective and efficient governance and administration of the LGPS. It will be for each Fund to determine the input into the development of the FSS (as appropriate within Fund’s own governance arrangements) however this may include: 1. Assist with the development and review the FSS 2. Review the compliance of scheme employers with their duties under the FSS, regulations and other relevant legislation 3. Assist with the development of and review communications in relation to the FSS. B5 Employer guarantors 1. Department for Education - To pay cessation debts in the case of academy cessations (where the obligations are not being transferred to another MAT) and to consider using intervention powers if an academy is deemed to be in breach of the regulations. London Borough of Hillingdon Pension Fund April 2026 21 2. Other bodies with a financial interest (outsourcing employers) 3. Any other guarantor B6 Other parties: 1 internal and external investment advisers ensure the investment strategy statement (ISS) is consistent with the funding strategy statement 2 investment managers, custodians and bankers play their part in the effective investment and dis- investment of Fund assets in line with the ISS 3 auditors comply with standards, ensure Fund compliance with requirements, monitor and advise on fraud detection, and sign-off annual reports and financial statements 4 governance advisers may be asked to advise the administering authority on processes and working methods 5 internal and external legal advisers ensure the Fund complies with all regulations and broader local government requirements, including the administering authority’s own procedures 6 the Ministry for Housing, Communities and Local Government, assisted by the Government actuary’s Department and the Scheme Advisory Board, work with LGPS Funds to meet Section 13 requirements. London Borough of Hillingdon Pension Fund April 2026 22 Appendix C – Glossary Actuarial certificates A statement of the contributions payable by the employer (see also rates and adjustments certificate). The effective date is 12 months after the completion of the valuation. Actuarial valuation An investigation by an actuary, appointed by an Administering Authority into the costs of the scheme and the ability of the Fund managed by that authority to meet its liabilities. This assesses the funding level and recommended employer contribution rates based on estimating the cost of pensions both in payment and those yet to be paid and comparing this to the value of the assets held in the Fund. Valuations take place every three years (triennial). Administering Authority (referred to as ‘the Fund’) A body listed in Part 1 of Schedule 3 of the regulations who maintains a Fund within the LGPS and a body with a statutory duty to manage and administer the LGPS and maintain a pension Fund (the Fund). Usually, but not restricted to being, a local authority. Admission agreement A written agreement which provides for a body to participate in the LGPS as a scheme employer Assumptions Forecasts of future experience which impact the costs of the scheme. For example, pay growth, longevity of pensioners, inflation, and investment returns, Code of Practice The Pensions Regulator’s General Code of Practice. Debt spreading arrangement The ability to spread an exit payment over a period of time Deferred debt agreement An agreement for an employer to continue to participate in the LGPS without any contributing scheme members Employer covenant The extent of the employer’s legal obligation and financial ability to support its pension scheme now and in the future. Funding level The funding level is the value of assets compares with the liabilities. It can be expressed as a ratio of the assets and liabilities (known as the funding level) or as the difference between the assets and liabilities (referred to as a surplus or deficit). London Borough of Hillingdon Pension Fund April 2026 23 Fund valuation date The effective date of the triennial Fund valuation. Guarantee / guarantor A formal promise by a third party (the guarantor) that it will meet any pension obligations not met by a specified employer. The presence of a guarantor will mean, for instance, that the Fund can consider the employer’s covenant to be as strong as its guarantor’s. Local Pension Board The board established to assist the Administering Authority as the Scheme Manager for each Fund. Non-statutory guidance Guidance which although it confers no statutory obligation on the parties named, they should nevertheless have regard to its contents Notifiable events Events which the employer should make the Administering Authority aware of Past service liabilities The cost of pensions already built up or in payment Pension committee A committee or sub-committee to which an administering authority has delegated its pension function Pensions Administration Strategy A statement of the duties and responsibilities of scheme employers and Administering Authorities to ensure the effective management of the scheme Primary and secondary employer contributions Primary employer contributions meet the future costs of the scheme and Secondary employer contributions meet the costs already built up (adjusted to reflect the experience of each scheme employer). Contributions will therefore vary across scheme employers within a Fund. Rates and adjustments certificate A statement of the contributions payable by each scheme employer (see actuarial certificates) Scheme Manager A person or body responsible for managing or administering a pension scheme established under section 1 of the 2013 Act. In the case of the LGPS, each Fund has a Scheme Manager which is the Administering Authority. London Borough of Hillingdon Pension Fund April 2026 24 Appendix D – Risks and controls D1 Managing risks The administering authority has a risk management programme to identify and control financial, demographic, regulatory and governance risks. Details of the key Fund-specific risks and controls are set out in the Fund’s Risk Management Policy, which can be found on the Fund’s website at www.hillingdon.gov.uk/pension-fund-documents. The local pension board assists the Fund its managing its risks and the full role of the local pension board in is set out in the London Borough of Hillingdon constitution which can be found at www.hillingdon.gov.uk/article/2513/Council-constitution-and-delegations. D2 Employer covenant assessment and monitoring Many of the employers participating in the Fund, such as admitted bodies (including TABs and CABs), have no local tax -raising powers. The Fund assesses and monitors the long-term financial health of these employers to assess an appropriate level of risk for each employer’s funding strategy. Type of employer Assessment Monitoring Local Authorities Tax-raising or government-backed, no individual assessment required n/a Colleges Government-backed, covered by DfE guarantee in event of failure Check that DfE guarantee continues, after regular scheduled DfE review Academies Government-backed, covered by DfE guarantee in event of MAT failure Check that DfE guarantee continues, after regular scheduled DfE review Admission bodies (CABs) No change since 2022 valuation Regular ongoing dialogue Admission bodies (TABs) No change since 2022 valuation Regular ongoing dialogue Designating employers No change since 2022 valuation Regular ongoing dialogue Any change in covenant over the inter-valuation period may lead to a contribution rate review. D3 Climate risk and TCFD reporting The Fund has considered climate-related risks when setting the funding strategy. The Fund has carried out climate scenario analysis incorporating both stress testing, and narrative-based scenario analysis for the local authority employers at the 2025 valuation. The narrative approach explores the complex and interrelated risks associated with climate change by defining a specific extreme, downside risk (in this instance a food shock) and constructing narratives around potential policy and market responses, noting these may be sub -optimal. This approach allows consideration to be given to the impact of sudden, severe downside risks in the short term, the interdependencies that arise and potential immediate actions. Coupling this approach with stress testing (to better understand the impact of possible climate scenarios) has allowed the Fund to assess a range of outcomes that may arise, and assess the resilience of the Fund under these scenarios. The results show that: 1. When considering climate scenario stress tests, the Fund appears to be generally resilient to different climate scenarios, with generally modest impacts versus the base case modelled London Borough of Hillingdon Pension Fund April 2026 25 2. The results of the downside, narrative analysis suggest that the Fund is likely to be resilient in the face of some severe downside risk events (in comparison to the base case), but not all. Climate scenario analysis helps assess risks and tests the resilience of current and long -term strategies under various scenarios. This helps to identify vulnerabilities across both assets and liabilities. Identification of these vulnerabilities can inform risk management processes (see figure 1), helping the Fund ensure appropriate controls and mitigations are in place. Scenario analysis therefore supports informed decision making, and may be used in future to assist with disclosures prepared in line with Task Force on Climate-Related Financial Disclosures (TCFD) principles. This climate analysis was not applied to the funding strategy modelling for smaller employers. However, given that the same underlying model is used for all employers and that the local authority employers make up the vast majority of the fund’s assets and liabilities, applying the climate analysis to all employers was not deemed proportionate at this stage and would not be expected to result in any changes to the agreed contribution plans. The Fund’s Responsible Investment beliefs are included in its Investment Strategy Statement. November 2025 024 London Borough of Hillingdon Pension Fund Appendix E – Actuarial assumptions The Fund’s actuary uses a set of assumptions to determine the strategy, and so assumptions are a fundamental part of the Funding Strategy Statement. E1 What are actuarial assumptions? Actuarial assumptions are required to value the fund’s liabilities because: • There is uncertainty regarding both the timing and amount of the future benefit payments (the actual cost can’t be known until the final payment is made). Therefore to estimate the cost of benefits earned to date and in the future, assumptions need to be m ade about the timing and amount of these future benefit payments • The assets allowed to an employer today are a known figure. However, the future investment return earned on those assets and future cashflows into the fund are uncertain. An assumption is needed about what those future investment returns will be There are two types of actuarial assumptions that are needed to perform an actuarial valuation: financial assumptions determine the expected amount of future benefit payments and the expected investment return on the assets held to meet those benefits, whilst demographic assumptions relate primarily to the expected timing of future benefit payments (i.e. when they are made and for how long). All actuarial assumptions are set as best estimates of future experience with the exception of the discount rate assumption which is deliberately prudent to meet the regulatory requirement for a ‘prudent’ valuation. Any change in the assumptions will affect the value that is placed on future benefit payments (‘liabilities’), but different assumptions don’t affect the actual benefits the fund will pay in future. E2 What funding bases are operated by the Fund? A funding basis is the set of actuarial assumptions used to value an employer’s (past and future service) liabilities. The fund operates two funding bases for funding valuations: the ongoing participation basis and the low-risk exit basis. All actuarial assumptions are the same for both funding bases with the exception of the discount rate – see further details below. E3 What financial assumptions are used by the fund? Discount rate The discount rate assumption is the average annual rate of future investment return assumed to be earned on an employer’s assets from a given valuation date. The fund uses a risk-based approach to setting the discount rate which allows for prevailing market conditions on the valuation date (see ‘Further detail on the calculation of financial assumptions’) and the Fund’s investment strategy. The discount rate is determined by the prudence level. Specifically, the discount rate is calculated to be: The average annual level of future investment return that can be achieved on the Fund’s assets over a 20 year period with a x% likelihood.

Classification: Public Pensions Committee 24 March 2026 GOVERNANCE Part I Item 7 Committee Pensions Committee Officer Reporting Pete Carpenter, Finance Tunde Adekoya, Finance Papers with report Responsible Investment Policy HEADLINES This report is to enable the Pension Committee to approve the updated Responsible Investment Policy. RECOMMENDATIONS That the Committee: 1. Note and Approve Draft Responsible Investment Policy SUPPORTING INFORMATION Draft Responsible Investment Policy The Draft 2026 Responsible Investment Policy positions the Fund within a fully pooled investment structure, strengthens climate and stewardship commitments, introduces explicit exclusions and impact investing targets, and aligns the Fund with modern ESG frameworks i ncluding the UN SDGs and Net Zero pathways. This updated policy enhances transparency, strengthens governance, and supports long‑term sustainable returns for members. This report presents the updated Responsible Investment (RI) Policy (March 2026) for the London Borough of Hillingdon Pension Fund, outlining significant developments since the previous version from March 2023. The revised policy reflects the Fund’s evolving governance arrangements, regulatory expectations, climate ambitions and the forthcoming transition to full investment pooling via the London Collective Investment Vehicle (LCIV). The LCIV have seen this updated policy. Considerable work has been undertaken with Committee Members in January and February 2026 to come to this position. Members were reminded of the following guidance set out in Section 5 of the draft Investment Strategy Statement Guidance Document issued in late 2025: Responsible investment (RI) Classification: Public Pensions Committee 24 March 2026 5.1 AAs as public authorities are rightly expected to be particularly transparent with their approach to responsible investment and must maintain the highest standards in managing financial risk. 5.2 The ISS must set out the AA’s approach to responsible investment. Responsible investment is a strategy and practice which seeks to ensure that environmental, social and governance (ESG) factors are taken into account in making decisions on investment strategy and that investor rights and influence are appropriately exercised. 5.3 For the purposes of the ISS, AAs should be as clear and succinct as possible, in setting out their objectives, priorities and preferences with respect to responsible investment. 5.4 The RI approach and priorities should be reviewed in every valuation period to ensure they remain relevant and up to date. Key considerations 5.5 As set out in Chapter 2, in setting their investment strategy AAs should consider all factors, including ESG factors, that are financially material to performance of their investments and the impact of their investments. AAs may also take non -financial considerations into account provided that doing so would not involve risk of significant financial detriment to the fund, and where they have good reason to think that scheme members would support their decision. 5.6 In setting out their approach to responsible investment, AAs may include a preference for investments which have a positive impact as well as an acceptable financial return. AAs may also choose to indicate that a lower return on a limited proportion of their portfolio is acceptable in order to achieve ESG-related goals. 5.7 AAs should take account of the views of employer and member representatives on their approach to responsible investment, including through their local pension board. AAs should exercise caution against undue influence from campaign groups whose positions may not reflect the views of members or align with the fund’s fiduciary responsibilities. The primary obligation remains to act in the best financial interests of the fund, ensuring that any consideration of member sentiment is balanced with long- term risk management and regulatory compliance. 5.8 As set out in Chapter 3, the role of the AA is to set the ISS, including the high-level objectives, but not to specify the individual holdings, managers or geographic zones of investment. The RI approach should not set exclusions for investments in individual countries, investment styles or companies. Summary of Draft RI Policy March 2026 1. Transition to Full Asset Pooling: Classification: Public Pensions Committee 24 March 2026 A major change in the 2026 policy is the confirmation that all Fund assets will transition to the London CIV by 31 March 2026, with the London CIV taking responsibility for implementing the Fund’s RI policy, including manager selection and stewardship activity. The Fund retains responsibility for setting the policy and high ‑level asset allocation. 2. Strengthened Climate Commitments: The policy introduces formal climate‑related commitments for the first time. The Fund supports Hillingdon Council’s Net Zero 2050 target, while the London CIV has committed to achieving Net Zero by 2040, providing a clear pathway for the Fund’s own climate objectives. 3. Introduction of Priority UN Sustainable Development Goals (SDGs): The 2026 update embeds four priority SDGs to guide investment decision‑making and stewardship activity: - SDG 13: Climate Action - SDG 8: Decent Work and Economic Growth - SDG 3: Good Health and Wellbeing - SDG 10: Reduced Inequalities 4. New Target for Impact Investments: The policy introduces a target allocation of 5% of Fund assets to impact investments, defined as investments delivering measurable environmental or social benefits alongside financial returns. 5. Updated Approach to Stewardship and Engagement: The 2026 policy significantly expands the stewardship framework, detailing: - London CIV’s use of EOS at Federated Hermes for voting and engagement services. - A structured four‑stage engagement milestone system. - A clear escalation process including collaborative action, public statements, and shareholder resolutions. 6. Controversial Weapons: For the first time, the Fund will not invest in companies deriving revenues from the development of components used solely in controversial weapons. 7. Revised Governance, Monitoring and Reporting The 2026 policy shifts monitoring responsibilities from individual external managers to LCIV, with LCIV providing an annual RI report to the Committee. The table below provides a comparison between the 2023 and 2026 RI Policies Theme 2023 RI Policy Position 2026 Draft RI Policy Position Nature of Change Classification: Public Pensions Committee 24 March 2026 Asset Pooling & Implementation Assets invested through mix of external managers and LCIV, Fund responsible for manager oversight and implementation. All Fund assets to transfer to LCIV by 31 March 2026; LCIV responsible for implementation of RI policy, selection of underlying managers and advice. Major operational shift to full pooling; LCIV becomes implementation body. Net Zero Commitments No specific Net Zero target stated. Fund supports Hillingdon Council’s 2050 Net Zero target; LCIV committed to 2040 Net Zero, enabling Fund compliance. New climate commitments and alignment with LCIV timelines. ESG Framework & Approach Fund sets ESG expectations directly for managers; encourages PRI/Stewardship Code signatory status. LCIV expected to ensure managers integrate ESG; expectations routed via LCIV. New detailed ESG belief structure. Shift in operational responsibility from individual managers to LCIV. SDGs No reference to UN Sustainable Development Goals. Four priority SDGs identified: SDG 13, SDG 8, SDG 3, SDG 10. New SDG framework introduced. FINANCIAL IMPLICATIONS Continued training will incur fees dependant on the platform and events attended. LEGAL IMPLICATIONS Where applicable the legal implications are included within the body of the report.

1 London Borough of Hillingdon Responsible Investment Policy 2026 (Updated March 2026) 1 Table of Contents Introduction 2 Investment Objectives 6 ESG Beliefs 7 Responsible Investment Framework 11 Engagement and Active Ownership 13 Appendix 18 2 1. INTRODUCTION The London Borough of Hillingdon Pension Fund (the Fund) is committed to being a long-term steward of the assets in which it invests to protect and enhance the value of the Fund over the long term. The Fund’s primary investment objective is to ensure that over the long term the Fund will have sufficient assets to meet all pension liabilities as they fall due. To meet this overriding objective, the Fund will act in the best financial interests of its members. Instead of pursuing the highest possible investment return, it will consider all financial risks within its investment strategy, including Environmental, Social and Corporate Governance (ESG) and responsible investment risks and considerations. The Fund’s secondary investment objective is to ensure as far as possible that levels of employer contribution will be stabilised and maintained at reasonable levels and not impacted because of poor investment performance. As part of the Committee’s fiduciary duty, which includes a comprehensive approach to risk management, it has been recognised that ESG factors, including, but not limited to, climate change, can be financially material. As such, the Committee recognises that there is a need for the Fund to be a long -term, responsible investor to achieve sustainable returns. The Fund believes that ESG considerations should be integrated into all investment decision making as it helps reduce risk and improve performance to the pension fund and aligns with the fiduciary responsibility of the Fund. The Fund is a separate entity to the Council, and the Committee has delegated authority over the Fund. The Pensions Board has an oversight role in assisting the London Borough of Hillingdon Council (the Council), in its capacity as administering authority for the Fund, in ensuring compliance with regulations and policies that apply to the Fund. The Committee defines Responsible Investment (“RI”) in line with the UN -backed Principle for Responsible Investing (“PRI”), which states that RI is an approach to investing that aims to incorporate ESG factors into investment decisions, to better manage risk and generate sustainable, long-term returns. Given the Transfer of all Fund assets to the London C ollective Investment Vehicle (London CIV) from the 31st of March 2026, and over time the reduction of investment vehicles available through the London CIV, the Fund will need to apply its RI policy to the funds available for it to use through the London CIV going forward. Development of policy This Responsible Investment (RI) policy was initially developed through a working group consisting of three members of the Pensions Committee with support from officers who met several times to outline and develop the policy. Training on Responsible Investment and ESG has been provided for all Pensions Committee and Pension Board members. The policy has subsequently been reviewed and updated to ensure alignment to the UK Stewardship Code 2020. The Fund has considered guidance and information from the Ministry of Housing, Communities and Local Government (MHCLG), the Local Government Association 3 (LGA), Scheme Advisory Board (SAB), Pensions U K , the Law Commission in establishing this policy and the UK Stewardship Code. An initial draft of this policy was reviewed by the Pensions Board prior to its approval by the Pensions Committee on 29 January 2019. The policy was subsequently reviewed and updated in May 2021, March 2023 and March 2026. This Policy has been written in accordance with the (draft) Local Government Pension Scheme (England and Wales) 2026 guidance on preparing and maintaining an investment strategy. Compatibility with other policies This Responsible Investment policy is aligned with the Fund’s Investment Strategy Statement where a brief overview on ESG and voting is included. In addition, the policy is aligned with the Fund’s Funding Strategy Statement with consistency of objectives and return expectations to support the funding level. The Fund fully supports the principles of the UK Stewardship Code and expects LCIV and its underlying investment managers to abide by the code. Policy Scope This policy is applicable to all investment activities of the Hillingdon Pension Fund. How We Invest The Fund’s primary objective is to provide pension and other benefits to members and their dependents on their retirement and/or death on a defined benefits basis. To meet this primary objective, the Fund invests in a diversified range of asset classes in order to maximise investment returns whilst keeping risk at an acceptable level. The Fund invests in public market investments (such as equities, corporate bonds and government bonds), and in private market investments such as property and infrastructure. From April 2026, all assets will be managed by the Fund’s chosen investment pool (London CIV). Whilst the Fund retains responsibility for setting the high-level strategic asset allocation, the London CIV will be responsible for its implementation including selecting Investment Managers. The Fund collaborates closely with the London CIV to ensure that its wishes and the needs of its members are clearly communicated. Post April 2026 the Fund will retain responsibility for its own Responsible Investment (RI) Policy, and the London CIV will be responsible for its implementation. The Fund will work closely with the London CIV to seek to reflect this policy in its investments. Risks There are several risks associated with this RI policy, including implementation of this strategy. The Fund is reliant on third parties to comply with its policies and for the LCIV to provide sub funds consistent with this policy. The Fund is reliant on the LCIV and its underlying external investment managers to integrate the policy into pooled funds and balance the views of other investors who may have conflicting policies . Risks will be mitigated through the LCIV and reporting of ESG activity. 4 Compliance Compliance of the Fund’s activity with this policy will be reported annually in the Pension Fund Annual report. LCIV will provide an annual RI report to the Committee. Responsibilities and Governance The London Borough of Hillingdon Pensions Committee has a fiduciary responsibility for the determination and oversight of investment policies and the conduct of those policies. The Committee works closely with officers, external advisers and the Pensions Board in meeting its obligations in this respect. The Committee meets quarterly and regularly reviews asset allocations and investment policies with officers and external advisers. Periodically, investment goals and strategy are considered and revised as appropriate. The Local Pensions Board has an oversight role in assisting the administering authority in securing compliance with regulations and policies that apply to the Fund. The Pensions Board meets quarterly to review the Pensions Committee reports that will include reports relating to compliance with this Responsible Investment Policy. In future Officers will maintain a rolling programme of review and due diligence on LCIV and report the results of their work to the Committee. In considering the performance of investments and possible changes/improvements which could be made, the Committee always takes account of initial and recurring fund costs and fees. ESG considerations and financial risk are considered in all investment decisions. The Fund pursues a policy of transparency and accountability to its stakeholders for the effective management of the Fund and its investment portfolio. 5 DEFINITIONS Responsible Investment (RI) The term Responsible Investment means the integration of Environmental, Social and corporate Governance (ESG) considerations into investment management processes and ownership practices in the belief that these factors can have an impact on financial performance. Environmental Environmental considerations could include among other factors, energy usage, waste disposal, raw materials sourcing, carbon emissions, water usage and recycling processes. Social Social considerations could include among other factors, diversity, treatment of minorities, opportunities for women, employee rights, charitable activities, community work, use of agency workers and social infrastructure. Governance Governance considerations could include among other factors, composition of boards, external trustees, available share classes, interaction with shareholders, remuneration and voters’ rights. 6 2. INVESTMENT OBJECTIVES, ESG BELIEFS & APPROACH 2.1 Investment Objectives The Fund’s primary objective is to ensure that, over the long term, the Fund will have sufficient assets to meet all pension liabilities as they fall due. To achieve this, the Fund will look to maximise the return on its investments while managing risk within acceptable levels. Investment risks should be considered in the context of reasonable expectations of investment reward. Every effort must be made to ensure that risk and reward are considered jointly, and risks are sufficiently rewarded. The Fund will ensure adequate liquidity is available within the portfolio to meet its obligations as and when they fall due. The Fund will ensure as far as possible that levels of employer contributions will be stabilised and maintained at reasonable levels and not impacted on because of poor investment performance. Investments will contribute as part of the Funding Strategy for the Fund to be fully funded over the long term. The Fund will take proper advice on all investment decisions, from April 2026 LCIV will provide this advice 7 3. ESG Beliefs The Committee has formulated a set of ESG beliefs to help underpin overall investment decision making. These are revised on a regular basis to ensure they remain appropriate. The Committee’s ESG beliefs have been summarised below. 3.1 Risk Management 1. ESG factors (including Climate Change) are important for risk management (including reputational risk) and can be financially material. Managing these risks forms part of the fiduciary duty of the Committee. 2. The Committee believes that ESG integration, and managing ESG factors such as climate change risks, leads to better risk-adjusted outcomes and that ESG factors should be considered in the investment strategy, where there is clear financial rationale for doing so. 3. The Committee is responsible for the Fund’s ESG beliefs and Responsible Investment Policy but will be cognisant of the Council’s wider policies and values. 3.2 Approach/Framework 4. The Committee expects investment managers appointed by the London CIV to integrate ESG considerations into their investment process and in their stewardship activities and seeks to understand how they do so. When considering new investment allocations, the London CIV should look favourably on investment managers who are able to demonstrate a plan to transition to net zero. 5. The Committee believes that certain investment opportunities that provide a positive ESG impact, such as funds that support the climate transition, will perform strongly as countries transition onto more sustainable development paths. Where possible the Committee, through the London CIV, will consider allocating to these opportunities where there is clear financial rationale for doing so. 3.3 Voting & Engagement 6. ESG factors are relevant to all asset classes, whether liquid or illiquid investments, and investment managers have the responsibility to engage with companies on ESG factors. 7. The Committee wants to understand the impact and effectiveness of voting & engagement activity within their investment mandates. The Committee expects the London CIV to agree to a set of stewardship priorities with the appointed investment managers and review these on an annual basis. 8. The Committee believes that engage is more effective to initiate change than divesting and so will seek to communicate key ESG actions to LCIV in the first instance. Divestment will be considered on a pragmatic basis if the engagement with the investment manager has 8 not produced positive results. 3.4 Reporting & Monitoring 9. ESG factors are dynamic and continually evolving, therefore the Committee will receive training as required to develop their knowledge. 10. The Committee will seek to monitor key ESG metrics, such as greenhouse gas emissions, within the investment portfolio to understand the impact of their investments. The Committee will take a pragmatic view and look to evolve their approach over time. 11. The Committee will set pragmatic ESG targets based on their views, data availability, and how key ESG metrics evolve over time. 3.5 Collaboration 12. LCIV and the underlying investment managers should be actively engaging and collaborating with other market participants to raise broader ESG investment standards and facilitate best practices as well as sign up and comply with common frameworks. 13. The Fund should look to maintain current standards and seek to sign up to further recognised ESG framework/s or initiatives to collaborate with other investors on key issues as appropriate. 3.6 ESG Approach The Fund believes in a policy of long-term investment to achieve sustainable returns from well-governed and sustainable assets. Investment in companies that are managed better and that work within strong Environmental, Social and Governance aware frameworks and can provide investors with risk -aware, long term sustainable returns. The Fund believes that LCIV and the underlying investment managers that manage assets on behalf of the pension Fund should at the least be signatories to the UK Stewardship Code and Principles for Responsible Investment (PRI). Managers outside of these frameworks should have a valid reason not to sign up, for example are signed up to other relevant bodies for their industry or specific asset class but the Fund expects LCIV to encourage them to do so. We expect LCIV not to make n ew investments into managers who are not signatories to the UK Stewardship Code and PRI, or other similar regional initiatives, with clear rationale for doing so if not. The Fund favours a policy of engagement with companies as opposed to widespread policies of exclusion of companies from specific sectors. However, divestment is a tool available to LCIV and its investment managers to divest from companies for any reason including ESG reasons. The Fund will consider UK foreign policy or UK defence policy when making investment decisions. The Fund believes that Climate Change is a financial risk to the Pension Fund and manages this risk through the Fund’s Risk Register. Climate risk is evident in all sectors and should be considered in all investments. 9 The Fund expects LCIV to consider the usage of resources of companies and the implications of targets for reduced carbon emissions to support the achievement of the Paris agreement principles. The Fund believes ESG risks should be approached holistically rather than on specific issues as factors are continually evolving, this enables LCIV to be reactive to the underlying company ESG issues and work with companies to make improvements. The Fund believes sustainable investments can be achieved with robust and effective dialogue and engagement with investment managers and corporate management teams. Sustainable investment policies should provide: - Maintainable, competitive and risk adjusted returns - Avoidance of harm and mitigation of ESG risks - Demonstrable benefits to all stakeholders Effective ESG integration combined with proactive engagement should maximise the adoption of these policies and structures within our portfolio to ensure companies in which the Fund ultimately invests have robust board structures, remuneration and sustainability policies, risk management and debtholder rights. The Fund will consider the fullest range possible of asset classes when determining its asset allocation. No asset classes are excluded. As per the spectrum of ESG approaches presented in the chart below, the Committee wish to pursue a “sustainable” investment approach for the Fund that integrates ESG risk analysis into investment decision-making, whilst pursuing certain “impact” opportunities that generate competitive financial returns whilst also providing positive and measurable environmental or societal impact. The Committee will seek clear financial rationale in any investment decision and consider in balance all financial and non-financial considerations. The Committee’s position is indicated on the spectrum chart below. 10 Traditional ESG factors not considered. Fully Delegated “Light Touch” Approach Reliance on investment managers’ RI Policies. Values-based/ Exclusionary/ Ethical Investing Reflect core values of an investor. Avoids sectors that are controversial. Sustainable Investing “Integrated Approach” Manages ESG risks whilst seeking positive ESG outcomes. Impact Investing Investing in companies, funds or infrastructure that provide solutions to social and environmental issues that look to deliver market rate financial returns. Impact Only/ Philanthropic Investing Impact investing, but market returns are a lower priority. ESG Impact Financial Impact Focus on delivering long- ter m returns Below market returns Objectives ESG risks managed Pursues positive ESG outc omes Seeks specifi c ESG targets Governance Requirements Regular training to review ES G beliefs, set objectives and integrate ES G policy Manager monitoring and engagement ESG Reporting ESG targets set an d impact measured Review of st rategy and allocation to funds aligned wit h ESG policy 11 4. RESPONSIBLE INVESTMENT FRAMEWORK 4.1 This RI framework provides the investment beliefs and objectives as the starting point to deliver RI and stewardship for the Fund. In making investment decisions, the Fund seeks and receives proper advice from specialist investment advisers. From April 2026 this advice will be provided by LCIV. The Fund requires the London CIV to undertake appropriate monitoring of current investments regarding their policies and practices on all issues which could present a material financial risk to the long-term performance of the Fund such as, but not limited to, corporate governance, social and environmental factors. The Fund regularly appraises the ESG credentials and performance of LCIV to ensure that its ESG principles are properly reflected within the investment portfolio. The Fund expects its LCIV’s underlying investment managers to integrate material ESG factors within its investment analysis and decision making. 4.2 Net Zero Target Hillingdon Council has set a Net Zero Target of 2050, consistent with UK government policy. The Fund supports this ambition and target. London CIV has committed to become a net zero entity by 2040 in line with the Paris Agreement objectives to limit global temperature rise below 1.5°C. LCIV achieving this target will ensure the Fund achieves its own target of 2050. 4.3 RESPONSIBLE INVESTMENT IMPLIMENTATION Pension Committee and Pension Board members have received and will continue to receive training and education in ESG matters including climate, governance and other risks, to keep up to date on the latest sustainable investment regulations and opportunities. Training will be recorded in a training log and reviewed under regular training needs analysis assessments. Key ESG issues will be considered and included on the Fund risk register, where material. ESG will be considered in all investment decisions and will be incorporated as part of Investment Strategy decisions. The Fund will ensure LCIV’s ESG integration policies are in line with Fund expectations and beliefs and LCIV will report on ESG factor management to the Fund regularly. Delegation of day -to-day ESG integration of investments is given to LCIVs underlying investment managers who are expected to have closer knowledge of companies under investment and board activity. However, the Committee, with the support from its officers and LCIV, will undertake annual reviews of LCIV’s approach to integrating ESG factors and engage with them where there is misalignment with the Committee’s ESG beliefs and look to remedy any issues where possible. The Fund will also seek to understand LCIV’s approach to voting and engagement and monitor this on an ongoing basis to seek the effectiveness of these activities. The Fund will challenge and require assurance on decisions and investments made by LCIV’s underlying investment managers where Fund stakeholders may have ESG concerns, to fully understand the risk profile of investment. 12 The Fund RI policy will be formally reviewed and updated annually. The Committee’s ESG beliefs will be formerly reviewed biennially or more frequently if required, to ensure alignment with the policy. The Committee will monitor the Fund’s assets against this Policy on an ongoing basis, with the assistance of LCIV. The Committee views the development of the Policy as an ongoing process as approaches to integrating ESG factors continue to evolve over time. When reviewing the Policy, the Committee will take account of any significant developments in these areas to ensure they are taking the best practice approach. The Fund is maintaining a regular dialogue with senior management of LCIV to ensure that its Investment beliefs and policies are considered and as much as possible accommodated by LCIV and its underlying investment managers. Investment into pooled funds does not remove or reduce the fiduciary responsibilities of the Fund and the Committee and officers will engage closely with LCIV and will seek its full co-operation to properly acquit these responsibilities including implementation of ESG policies and stewardship of assets. 13 5. ENAGEMENT AND ACTIVE OWNERSHIP 5.1 The Fund, through its participation in LCIV, will work closely with other LGPS Funds in London to enhance the level of engagement both with external managers and the underlying companies in which it invests. The Fund’s investments through the LCIV are covered by the voting policy advising managers to vote in accordance with voting alerts issued by the Local Authority Pension Fund Forum (LAPFF) as far as practically possible. The London CIV will hold managers to account where they have not voted in accordance with these directions. The Fund’s approach to engagement recognises the importance of working in partnerships to magnify the voice and maximise the influence of investors as owners. The Fund expects LCIV to work collaboratively with others if this will lead to greater influence and deliver improved outcomes for shareholders more broadly. The Fund appreciates that to gain the attention of companies in addressing governance concerns; it needs to join with other investors sharing similar concerns. To ensure effective and consistent use of the voting rights, LCIV’s underlying investment managers are tasked with exercising the voting rights accruing to the Fund. If important issues impacting local residents do emanate from actions of invested companies, the Pensions Committee will contact LCIV to make their opinion known and ask for such to be presented at meetings with the company or reflected in their voting pattern. 5.2 LCIV’s Engagement and Escalation Process As a partner fund of the London CIV, the Fund delegates the implementation of its Responsible Investment (RI) policy to LCIV, while retaining responsibility for setting the policy itself. From April 2026, all Fund assets will be managed within the London CIV pool. The London CIV’s approach is based on the belief that stewardship and active ownership are primary tools for delivering long-term sustainable returns and managing financially material risks. Engagement involves meaningful discussions with companies on a wide range of topics and offers the opportunity to influence corporate behaviour and bring about real-world change. 5.3 The Engagement Approach The Fund through London CIV employs a "stewardship first" philosophy, prioritising constructive engagement over immediate divestment. This approach is implemented by the London CIV through three primary channels: • Investment Managers: London CIV selects and monitors external managers to ensure they integrate ESG factors into their investment processes and conduct active engagement with portfolio companies. • Stewardship Provider (EOS at Federated Hermes): London CIV has appointed EOS to provide voting and engagement services for listed equities and corporate fixed income. • Collaborative Initiatives: LCIV leverages the collective voice of multiple investors by 14 participating in groups such as the Local Authority Pension Fund Forum (LAPFF) and Climate Action 100+. To track the effectiveness of these efforts, a four-stage milestone system is used through EOS to measure progress against specific objectives set for each company: 1. Milestone 1: The concern is raised with the company at the appropriate level. 2. Milestone 2: The company acknowledges the issue as a serious investor concern. 3. Milestone 3: The company develops a credible strategy or sets stretching targets to address the concern. 4. Milestone 4: The company implements the strategy or measures to address the concern. 5.4 Escalation Steps If dialogue does not bring the desired outcomes after a defined period, or if a company is not open to constructive dialogue, various escalation strategies will be considered to trigger a corporate reaction. The approach taken will be proportionate and consistent with fiduciary duty. Possible escalation steps include: • Manager Intervention: Asking investment managers to take further action, such as writing directly to a particular Board member. • Collaborative Pressure: Joining or leading collaborative groups to increase investor 15 pressure on a specific issue. • Direct Action: Contacting the company directly to express concerns or make specific requests. • Public Statements: Issuing a public statement or supporting media campaigns to highlight concerns. • Shareholder Resolutions: Supporting, filing, or co-filing shareholder resolutions regarding ESG issues. • Voting Sanctions: Using voting power to vote against the re-election of responsible directors (such as those on risk or audit committees), the board chair, or the annual financial report. 5.5 UN Sustainable Development Goals (SDGs) The Sustainable Development Goals ("SDGs") are a global framework adopted by all United Nations member states, which serves to address global challenges of social, economic and environmental sustainability. The Fund has identified several SDGs as relevant to the Fund and supportive of the Fund’s responsible investment ambitions. The core principle underpinning the Fund’s agreed approach is the desire for the Fund to be a long-term, sustainable investor. The following four SDGs have been selected as the Fund's priorities which have been grouped into three themes: Environment ● SDG 13 - Climate Action - this is reflected as an overarching theme relevant to the Fund and has a dedicated section within the Responsible Investment policy. Economic ● SDG 8 - Economic Growth - economic growth can lead to positive investment opportunities along with an opportunity to reduce inequalities and poverty. This has both local and global relevance. Social ● SDG 3 - Good Health and Wellbeing - the recent COVID-19 pandemic reinforces the need for communities to invest in the health and wellbeing of their populations. ● SDG 10 - Reduced Inequalities - reducing inequality, and ensuring no-one is left behind, are integral to achieving the sustainable development goals. It is not sufficient for countries to record positive economic growth: the resultant benefits and opportunities must be available to all, regardless of gender, 16 ethnicity or any other characteristic. The Fund takes a proactive approach to human rights and diversity and inclusion across all aspects of the Fund’s business. The Fund notes that there is both local and global relevance to the SDGs, and that it is important to be mindful of the context in which investment opportunities are selected and the necessity of balancing the risk, return, and diversification characteristics of any decisions made. The Fund will communicate the agreed priority SDGs to its investment managers through the London CIV, and will request that they have regard for, and provide evidence of having considered, the SDGs in their selection, retention, and realisation of underlying investments. The full set of 17 SDG’s are included in the Appendix. 5.6 Committee’s Ambition The Fund will seek investment opportunities that have a real-world positive impact, alongside generating suitable investment returns. The Fund has a target allocation of 5% to impact investments. Impact Investing can be defined as “Investments made with the intention to generate positive, measurable social and environmental impact alongside financial return”. 5.7 Exclusions LCIV have adopted a ‘Three Pillar’ approach to how exclusions are managed for partner funds. Each ‘Pillar’ has a different degree of exclusions. The approach is still being refined and is illustrated below. 17 The Fund prefers an engagement approach over divestment; however, the Fund does not want to invest in companies which profit from the supply of arms to vulnerable regions of the world. Therefore, the Fund will not invest in companies that derive revenue from the development of components intended solely to be used within, or in relation, to controversial weapons. Controversial weapons include incendiary weapons, cluster munitions, anti-personnel mines, biological and chemical weapons, blinding laser weapons and depleted uranium. The Fund will liaise with LCIV to ensure this aim is understood and, where appropriate and possible, is implemented via their Three Pillar approach. March 2026 18 6. Appendix

Classification: Members' Only and Not for Publication Pensions Committee 24 March 2026 INVESTMENT STRATEGY STATEMENT ITEM 8 Committee Pensions Committee Officer Reporting Pete Carpenter - Finance Babatunde Adekoya - Finance Papers with this report • Investment Strategy Statement RECOMMENDATIONS It is recommended that Pensions Committee: 1. Note and Approve the Draft Investment Strategy Statement SUMMARY This report provides details of the Investment Strategy Statement, in response to the outcomes of the triennial valuation. INFORMATION DRAFT INVESTMENT STRATEGY STATEMENT The triennial valuation results and Funding Strategy Statement were presented to the Committee today. In keeping with the LGPS (Management and Investment of Funds) Regulations, this sets the backdrop for the review of the Investment Strategy Statement. Work began on an initial review of the Pension Fund Investment Strategy and potential options were presented to Committee on the 24 September 2025. At the meeting, Isio presented initial illustrations of alternative strategic asset allocations for the Fund, ahead of a full investment strategy review in Q4 2025. It reflected feedback from the July 2025 Committee training session, where members expressed a desire to: • Target a slightly higher return • Enhance ESG integration within the portfolio Three illustrative portfolio options were proposed in comparison to current strategy; each aligned to a different strategic priority: Classification: Members' Only and Not for Publication Pensions Committee 24 March 2026 • Option 1 has similar risk profile to current strategy with slightly higher returns and increased VAR (Value at risk). • Option 2 introduces 8% Private Equity and increases Private Credit to 10%. Highest expected returns and highest VAR. • Option 3 introduces 5% Natural Capital and 5% UK Residential Housing for ESG impact. Marginally higher returns and lowest VAR. An investment training session was organised on 17 November 2025 for Pensions Committee, Pensions Board and Officers, to review for the suitability against the long-term objectives of the current strategy when contrasted against the impact of the “Fit For The Future” legislation. The training session also considered strategy implementation, focusing on pooling, the composition of the equity portfolio and ESG factors, alongside further implementation considerations. A further meeting was held on 28 November 2025 where further discussions took place between Pension Committee members, officers and Isio. This meeting specifically focused on the three options of strategic asset allocation with expected returns, Prudency and VAR (Value at Risk) all highlighted to assist Pension Committee members with understanding the best option that will serve the strategic investment needs of the Fund going forward. At the 9 December 2025 Pensions Committee meeting the Committee analysed the three proposed options. Option 3 was recommended by Isio, the fund’s investment consultant, and after deliberation, was agreed by the committee. The attached revised ISS is set before Committee for approval. Key changes to note include: • A number of changes to reflect the Draft ISS guidance issued in December 2025. • Changes to reflect that LCIV will be managing all assets from 1st April 2026. • Introduction of UK Residential Housing exposure (via the LCIV UK Housing Fund) for ESG impact and inflation linkage. • Increase in allocations to private equity (+8%) and private credit (+2%) to capture the illiquidity premium. • Adjustment to the equity mix: reduce passive exposure, increase active mandates for diversification and ESG. • Consider currency hedging (25%–50%) given USD volatility. • Revised control ranges to reflect that some asset classes, notably illiquid assest such as Private Equity and Property, are outside the current ranges and will take some time to bring into range. The changes are forecast to increase the modelled investment return from 9.1% to 9.4% but with a small increase in the Value at Risk (VAR) from £502m to £517m. Classification: Members' Only and Not for Publication Pensions Committee 24 March 2026 This ISS had been circulated to LCIV for comment and feedback is expected shortly. FINANCIAL IMPLICATIONS Financial implications are contained within the body of the report. LEGAL IMPLICATIONS There are no legal implications in the report.

1 London Borough of Hillingdon Pension Fund Investment Strategy Statement January 2026 2 1. Introduction This is the Investment Strategy Statement (“ISS”) of the Hillingdon Pension Fund (the “Fund”) as required by regulation 12 of the Local Government Pension Scheme (LGPS) (Pooling, Management and Investment of Funds) Regulations 20 26 (the “Regulations”). The Hillingdon Pension Fund is administered by Hillingdon Council as the Administering Authority. The authority to administer the Fund on behalf of the Council is delegated to the Pensions Committee. This statement has been written in accordance with the (draft) Local Government Pension Scheme (England and Wales) 2026 guidance on preparing and maintaining an investment strategy. As set out in the draft Local Government Pension Scheme (Pooling, Management and Investment of Funds) Regulations 2026, the Pensions Committee will review this ISS from time to time, and at least every three years and within 18 months of each actuarial valuation date. In the event of any significant change affecting any matter contained within this ISS, changes will be published within three months of the change occurring. This ISS has been prepared by the Pensions Committee after taking advice from the Fund's investment advisor ISIO and Marian George , the Independent Governance Advisor to the Fund, in accordance with the Regulations. Going forward, as required by Regulation 10, the Fund’s asset pool London CIV will provide the authority with proper advice (whether directly or indirectly) about the investment strategy. This ISS has been formulated after consultation with London CIV on all elements of the investment strategy, in line with guidance. The Investment Strategy Statement required by Regulation 11 must include: a) A requirement to invest money in a wide variety of investments; b) The authority’s high-level financial objectives; c) The authority’s approach to risk, including the ways in which risks are to be measured and managed; d) The authority’s priorities and preferences regarding responsible investment, including how social, environmental or corporate governance considerations are taken into account in the selection, non-selection, retention and realisation of investments; e) The authority’s policy on the exercise of rights (including voting rights) attaching to investments. f) A high-level objective on local investments, including a target range for those investments as a proportion of the total value of the pension fund; and g) A high-level strategic asset allocation. Consistent with the 2025 triennial revaluation of the Fund, the agreed investment aim is to generate, over time, a rate of return that is at least 6.7% p.a. and to achieve this, the Fund will invest in a wide variety of investments to reduce portfolio risk and reduce volatility. 3 2. The suitability of particular investments and types of investments; 2.1 Investment Objectives The Fund’s primary investment objective is to ensure that over the long term the Fund will have sufficient assets to meet all pension liabilities as they fall due. To achieve this objective the Fund will aim to:- • Maximise the returns on its investments • Manage risk within acceptable levels • Maintain liquidity to meet obligations as they fall due • Secure long-term solvency • Where appropriate, ensure stable employer contribution rates • Invest in a wide range of investments • Pool assets • Take proper advice • Consider Environmental Social and Governance (ESG) factors when making all investment decisions. The Committee has translated these objectives after taking proper advice into suitable strategic asset allocation benchmarks for the Fund. These benchmarks are consistent with the Committee’s views on the appropriate balance between maximising returns on investment and maintaining an appropriate level of risk over the long term as set out in the risk management policy of the Fund. The analysis provided by the Fund’s Investment Consultant, Isio, is that this strategic asset allocation has an expected return of 6.7% using a prudent 75th percentile assumption and will exceed the actuarial discount rate of 6.3%. The analysis provided calculates that the 3 year 1-in-20 Value at Risk is £520m. This measure reflects the Committee’s risk appetite and is consistent with the investment objectives and funding strategy, recognising the Fund’s maturity and cash-flow needs. The Fund is slightly negative cash flow and so requires the portfolio to provide some income each year to pay benefits. The position is monitored on a regular basis. Administering authorities must set high-level investment objectives in the ISS to meet the requirements of the funding strategy. The Committee has interpreted the Fund’s objectives as: • Returns: To achieve a long-term return of at least 6.7% p.a; • Risk: To invest in such a way that the 3 -year 1-in-20 Value at Risk represents an acceptable level of risk, Value at Risk of current target strategy is c .£520m as of 30 September 2025 which is deemed acceptable. • Cashflow: To ensure sufficient portfolio income generation and liquidity to meet all outgoings as and when it falls due and provide a minimum income of £15m per annum; and • Local Investment: To invest 5% of the Fund in local assets which have quantifiable benefits to the local areas of the authority and the economic development of the region. Further details in Section 8. 4 3. Investment of money in a wide variety of investments 3.1 Asset allocation The target asset allocation of the Fund is determined by the Pensions Committee acting on professional and proper advice in the best long-term interest of scheme beneficiaries, while looking to maintain overall target return. A full formal asset allocation review will be undertaken every three years following publication of the triennial revaluation results, or more frequently if necessary. The Fund will only invest in asset classes that are deemed to be suitable investments and so must meet the following criteria: • investments that are well understood by the Committee; • investments which are consistent with the Fund’s risk and return objectives; • investments which make a significant contribution to the portfolio by improving overall return and risk characteristics; and • a wide range of assets will be selected to increase diversification. The Fund's target asset allocation includes eight asset classes that combine to form the policy portfolio. Each asset class is selected to have different exposures to economic factors (GDP growth and inflation); to combine different geographies; an d span different currencies. In assessing suitability, the Pension Committee considered the respective return drivers, exposure to economic growth and sensitivity to inflation, income generation, each an important consideration, relative to the sensitivities of the Fund’s liabilities and managing risk. The Pension Committee determined target allocations to each asset class which it believes to be best suited to meeting the long-term objectives of the Fund. The Committee also identified tolerance ranges within which shorter term variations would be tolerated and/or actively pursued due to a combination of relative returns and investment opportunity. The target asset allocations and tolerance ranges are shown in the table below. The actual allocations will be maintained within the ranges if the scheme can find attractive opportunities that meet its return, risk, and cash flow requirements. Should an asset class go outside the tolerance range the Committee expect LCIV to discuss with the Committee and propose a course of action rather than rebalance automatically. In the absence of opportunities, investments will not be “forced” and the Fund will be unde r or over allocated to any asset class. Asset Class Strategic Asset Allocation* Tolerance Range (±%) Listed Equity 49% 39% - 59% Private Equity 8% 0 – 12% Private Credit 8% 4% - 12% 5 Property / Real Estate 8% 4% - 13% Infrastructure 8% 4% - 12% Other alternatives 5% 2% - 8% Credit 7% 4% - 10% UK Government Bonds 7% 2% - 12% Cash 0% 0 – 5% * Target allocation reflects agreed changes to asset allocation at Pensions Committee of December 2025 During periods of investment drawdown, private markets assets may be significantly underweight the target allocation and outside the tolerance range. Each asset class has its own specific investment objective and within each asset class there are further diversification controls. Currently approximately 95% of assets are managed by the London Collective Investment Vehicle (L ondon CIV) - the Fund’s investment pool (see section 4 below). The remaining assets are a single allocation to a specialist investment manager and small allocations to private assets which are in run-off. In line with Regulation 13, from 31 March 2026 London CIV will take delegated management responsibility for the Fund’s assets and must take all reasonable steps to implement the Fund’s investment strategy. The Fund sets the overall objectives sought and strategic asset allocation in line with the detail outlined in the table above. Implementation choices, for example the split between active and passively managed assets, and the geographical region of investment, are made by the London CIV and are not shown in the strategic asset allocation. Operational cash for benefit payments may be held outside the pool; London CIV is informed of balances to ensure the SAA covers all assets. Equities The Fund currently invests in Listed Equities on a global basis and through both active and passive management. The Committee prefers this geographic diversification and style balance to continue in the future. For active Listed Equities the Fund’s objective is to seek a balance between growth and value styles; the aim is to outperform the MSCI All Country World benchmark. The Committee prefers this style balance to continue in the future. Net dividends will continue to be reinvested until the fund’s cash flow needs change. Passive Listed Equities are held to keep investment manager fees low and to contribute to the return objective by tracking the relevant benchmarks. Passive equities are currently partially currency hedged. The Committee prefers these passive equities to be fully hedged back to sterling in the future. 6 All Listed Equities investments are invested via the London CIV or passively via Legal & General, London CIV’s pool-aligned partner, with monitoring responsibility delegated to the London CIV. The Fund implements Responsible Investment tilts within its active and passive Listed Equities portfolio. The Committee prefers these RI tilts to continue in the future. The Fund favours an 8% strategic allocation to Private Equities. The allocation will be implemented over time following launch of the London CIV strategies. UK Government Bonds, Credit & Private Credit The Fund currently invests in inflation-linked government bonds and diversified credit to improve the resilience of the portfolio and provide a contractual income to the Fund. The Fund is likely to have an increase in income requirement in the future and so prefers distributing share classes. Exposure includes index linked securities issued by the UK Government, given their similarities within the Fund’s liabilities. To enhance yield, the Fund may place investments in credit securities issued by UK and overseas companies. This asset class is managed through both passive and active mandates. When active management is selected, for example diversified and private credit, the manager will aim to maximise risk adjusted returns across a full market cycle. The Committee prefers this inflation and credit exposure and investment style to continue. Infrastructure The Fund has committed to investing in infrastructure as the duration of this class of assets matches the long -term nature of the Fund’s liabilities. The Fund’s existing holding in Infrastructure looks to gain cost -effective, diversified exposure to global infrastructure assets. The aim is to generate predictable, inflation -linked cash flows; this reduces risk, adds diversification and helps pay benefits. Property and UK Residential Housing The Fund currently holds allocations in UK and Global Property to support the overall aim of generating a return more than the market while earning predictable cash flows. The Fund has also made an allocation to UK Residential Housing with the aim of helping achieve the Fund’s Local Investment and Responsible Investment targets, while delivering inflation -linked cashflow driven returns . The Committee prefers this UK Residential Housing exposure to continue. 4. The authority’s approach to pooling investments, including the use of collective investment vehicles and shared services The Fund is committed to pooling of assets and the London Borough of Hillingdon as Administering Authority of the London Borough of Hillingdon Pension Fund formally agreed to join the London CIV on 25 February 2016 and were on-boarded on 1 March 2016. Through the London CIV the Fund will benefit from economies of scale, by pooling assets with other LGPS funds, enabling the London CIV to negotiate lower investment and implementation fees on various asset classes and to improve governance of investments. 7 4.1 London CIV The London CIV was formed as a voluntary collaborative venture by the 33 London Boroughs in 2014 to pool their LGPS investments, with Buckinghamshire accepted into the partnership during 2025. The London CIV received regulatory authorisation from the Financial Conduct Authority in November 2015 and launched its first sub-Fund in December 2015. The London CIV has been established as a collective investment vehicle for LGPS Funds. The current regulatory permissions allow for operation as an Authorised Contractual Scheme (ACS) Fund. The London CIV was created in line with the government directive aimed at reducing investment costs and driving efficiencies from scale. Since its initial launch, the London CIV has opened a diversified range of funds and continues to increase the available suite to provide various asset classes and styles. The London CIV structure and associated business plan is consistent with the criteria contained within the November 2015 Investment Reform and Criteria guidance. The Fund’s aim is for the London CIV to ultimately be responsible for managing all the Fund’s assets. The Fund has transitioned all liquid assets and a proportion of its private market allocation into the London CIV and is working with the London CIV to transfer all remaining private market assets. In addition to the funds held directly on the London CIV platform, the Fund has an allocation to passive funds retained outside of the London CIV operating model, which for the time being is in accordance with government guidance on the retention of life funds outside pools, the London CIV will monitor the passive funds as part of the broader pool. The Fund benefits in this regard from work carried out by the London CIV to reduce fees through economies of scale. The Fund will work with London CIV to transition further assets as and when there are suitable investment strategies available on the platform that meet the needs of the Fund's investment strategy and governance requirements. The Fund currently holds a portion of illiquid assets. The cost of exiting these strategies early would have a negative financial impact on the Fund as the costs of transitioning outweigh any potential gains. The expectation is these will be held as legacy assets by the London CIV until they mature and proceeds will be re-invested through the Pool, if it has appropriate strategies available, or until the Fund changes asset allocation and decides to disinvest. The Fund's illiquid assets currently held include Private Equity, Private Credit, Infrastructure and Property. 4.2 Pool Governance The legal ownership of assets held within the London CIV is with the depository, which is currently Northern Trust, with the beneficial ownership of the assets remaining with the Fund; the London CIV is the delegated manager of the Fund’s assets. The governance structure of the London CIV has been designed to ensure that there are both formal and informal routes to engage with the other London boroughs both as shareholders and investors, making the London CIV accountable at both levels. Governance is achieved through the Shareholder Committ ee, comprising nominated Member representatives from boroughs within the pool; including a representative of 8 the London Borough of Hillingdon Pensions Committee. At a company level for London CIV the Company Board is responsible for decision making, which includes strategy and oversight, budget setting, performance review, contract and fund decisions and financial reporting and controls. The Board has three Committees, including the Investment Oversight Committee, Compliance Audit & Risk Committee and the Remuneration and Nomination Committee. The London Borough of Hillingdon, as shareholder, will hold the London CIV Board accountable for delivery of the strategy and will work with the Board to ensure the pool is properly resourced to deliver it. The share structure of London CIV involves each member body being shareholders who all retain equal shares in ownership and voting, making the company accountable to its shareholders. In addition, the Company has a highly respected Non-Executive Board, meeting the requirements for strong governance arrangements to be in place. The Fund continues to work with the London CIV to improve the robustness of their governance framework and to ensure it meets the Fund’s needs on an ongoing basis. As part of the Fit for the Future legislative reforms, from 31 March 2026 the London CIV is required to take on increased responsibility on behalf of the London boroughs, including: • Act as the primary adviser to the Fund’s investment strateg y, and to take responsibility for delegat ed management of the agreed asset allocation and underling strategies. • Take on the management of existing assets from London boroughs that cannot be exited easily; and • Develop plans to increase investments in local investment and growth opportunities. 4.3 Investment implementation Where suitable L ondon CIV funds exist, the Fund will transition assets into pooled vehicles. As of 2025, the Fund has already transitioned substantial assets and expects to complete pooling of remaining eligible mandates in line with the government’s pooling deadline. The Fund retains its passive equity and passive index-linked gilt mandates outside the pool in accordance with government guidance, but these are monitored by the London CIV at pool level. The Fund will engage with L ondon CIV on updates to the ISS, consistent with regulatory requirements. The London CIV is responsible for delivering the strategy, including by implementing an investment portfolio which seeks to meet the objectives and comply with the asset allocation set out by AAs. Should London CIV not be able to implement some or all the strategy the Committee expects to be consulted by London CIV as to any proposed alternative course of action. 9 4.4 Investment Governance The Pensions Committee sets the objectives, risk tolerances and sets the required rate of return in conjunction with the scheme’s actuary. Once the parameters are established, the Committee determines the strategic asset allocation that it believes has the highest probability of succeeding, considering proper advice from the Fund's investment advisor. Going forward, this decision will be considered after taking advice from the London CIV. The Committee will hold the London CIV accountable for delivery of the strategy. The Pensions Committee meets quarterly to monitor Fund performance and actual asset allocation compared to the targets. An Investment Sub-Group structure is in place to consider urgent actions and take the necessary steps to manage the Fund’s investment portfolio. Meetings can be called as required to ensure decisions are taken in a timely manner. The Local Pensions Board was created to further enhance the governance of the Fund. The Local Pensions Board assists i n ensuring compliance with legislation and codes of practice on the governance and administration as issued by the Pension Regulator. The Fund also has a Training Policy which ensures that those making decisions have appropriate knowledge and skills. 4.5 Performance Measurement The Pension Committee reviews the Fund’s investment on a quarterly basis including performance, market conditions and asset allocation , and mak es appropriate decisions where necessary. The Fund's custodian provides an independent investment monitoring service. The London CIV also provides an ongoing monitoring service for the Fund. The Pensions Committee also receives reports from officers and advisors on review meetings with Fund’s investment managers, including London CIV. 5. The authority’s approach to risk, including the ways in which risks are to be measured and managed The Fund has a Risk Management Policy which can be found on the Council's website at Pension fund documents - Hillingdon Council 10 The Risk Management Policy details the risk management strategy for the Fund, which explains: • the risk philosophy for the management of the Fund, and in particular attitudes to, and appetite for, risk; • how risk management is implemented; • risk management responsibilities; • the procedures that are adopted in the Fund's risk management process; and • the key internal controls operated by the Administering Authority and other parties responsible for the management of the Fund. The Fund adopts best practice risk management, which supports a structured and focused approach to managing risks, and ensures risk management is an integral part in the governance at a strategic and operational level. The Fund recognises that it is not possible or even desirable to eliminate all risks. Accepting and actively managing risk is therefore a key part of the risk management strategy. A key determinant in selecting the action to be taken in relation to any ris k will be its potential impact on the Fund’s objectives considering the risk appetite, particularly in relation to investment matters. Equally important is striking a balance between the cost of risk control actions against the possible effect of the risk occurring. In managing risk, the Administering Authority on behalf of the Fund will: • ensure that there is a proper balance between risk taking and the opportunities to be gained; • adopt a system that will enable the Fund to anticipate and respond positively to change; • minimise losses and damage to the Fund and other stakeholders who are dependent on the benefits and services provided; and • make sure that any new areas of activity (new investment strategies, joint work, framework agreements etc.), are only undertaken if the risks they present are fully understood and considered in making decisions. Risk Management is a sound management technique that is an essential part of stewardship of the Fund. The benefits of a sound risk management approach include better decision-making, improved performance and delivery of services, more effective use of resources and the protection of reputation. The Pensions Committee analyse the level of risk and the drivers of risk and monitor and review the investment strategy and investment performance on an ongoing basis and take mitigating action where required. This may include rebalancing the allocation of assets when the allocations to asset classes breach the pre-agreed ranges. The Committee has established a target asset allocation for the Fund. They monitor the asset allocation and investment returns relative to the targets. The Committee also assesses risk relative to liabilities, monitoring the delivery of benchmark returns relative to liabilities on a regular basis. 11 The Pensions Committee provides a practical constraint on the Fund’s investments, deviating greatly from the intended approach by adopting a target asset allocation and by monitoring the actual asset class allocations relative to this target on a regular basis. The investment strategy is suitabl y diversified, with the balance of different asset classes mitigating the impact at an aggregate level of underperformance of an asset class. London CIV employs a range of investment managers mitigating the impact of individual manager performance . Diversification is a very important risk management tool. The Fund seeks to maintain a diversified exposure via a wide range of asset classes, geographies, and currencies. The Committee have a preference for multi manager funds were appropriate. 6. How social, environmental or corporate governance considerations are considered in the selection, non -selection, retention and realisation of investments The Fund is committed to being a long -term steward of the assets in which it invests and expects this approach to protect and enhance the value of the Fund in the long term. In making investment decisions, the Fund seeks and receives proper advice from specialist investment advisers. The Fund the London CIV and its underlying investment managers , to undertake appropriate monitoring of current investments regarding their policies and practices on all issues which could present a material financial risk to the long-term performance of the Fund such as corporate governance and environmental factors. The Fund expects London CIV to ensure its investment managers integrate material ESG factors within its investment analysis and decision making. The Fund will consider UK foreign policy or UK defence policy when making investment decisions. Non-financial factors may be considered only where this does not risk significant financial detriment and where there is good reason to think members support the decision; implementation is determined by the pool. The Fund in preparing and reviewing its Investment Strategy Statement will consult with interested stakeholders including, but not limited to, Fund employers, investment managers, Local Pension Board, advisers to the Fund and other parties that it deems appropriate to consult with. The Fund has prepared a Responsible Investment policy which outlines its approach ESG including the Stewardship Code and can be found at Pension fund documents - Hillingdon Council From 31 March 2026 onwards, the Fund’s Responsible Investment approach will be reviewed in collaboration with the London CIV and partner London boroughs to maximise the alignment between approaches and with the aim of increasing the impact of the approach in delivering positive change and the chosen objectives through greater scale of investment. 12 7. The authority’s policy on the exercise of rights (including voting rights) attaching to investments. Stewardship (engagement and voting) will be delivered by London CIV (or its appointed agent) under a pool-wide policy aligned with the UK Stewardship Code. The Fund through its participation in the Local Authority Pension Fund Forum (LAPFF) and London CIV will work closely with other LGPS Funds in London to enhance the level of engagement both with external managers and the underlying companies in which the Fund invests. The Fund’s investments through the London CIV are covered by the voting policy advising managers to consider voting in accordance with voting alerts issued by the LAPFF as far as practically possible. The London CIV will hold managers to account where they have not voted in accordance with the voting policy. Where LAPFF alerts are used, this will be effected through the pool’s stewardship framework to ensure alignment and efficiency. The Fund’s approach to engagement recognises the importance of working in partnerships to magnify the voice and maximise the influence of investors as owners. The Fund expects LCIV and its underlying investment managers to work collaboratively with others if this will lead to greater influence and deliver improved outcomes for shareholders and more broadly. The Fund appreciates that to gain the attention of companies in addressing governance concerns; it needs to join with other investors sharing similar concerns. To ensure effective and consistent use of the voting rights, LCIV’s underlying investment managers are tasked with exercising the voting rights accruing to the Fund. If important issues impacting local residents do emanate from actions of invested companies, the Pensions Committee will contact LCIV to make their opinion known and ask for such to be presented at meetings with the company or reflected in their voting pattern. 8. Local investment The Fund recognises the role that long -term institutional investment can play in supporting sustainable economic growth in the UK alongside the delivery of appropriate risk-adjusted returns. For the purposes of this Investment Strategy Statement, local investment is defined as place -based investment within the functional economic area in which the Fund operates, including the London Borough of Hillingdon, Greater London, and, where appropriate, the wider London CIV pool area, having regard to relevant local, regional and GLA growth priorities. Local investment is not treated as a standalone asset class and may be delivered across a range of asset classes, including private equity, private credit, infrastructure, property and other real assets. The local investment objective and target range have been set after taking advice from London CIV and, where possible, aligned with partner funds. 13 The Fund’s proposed objective is to maintain a strategic exposure to local investment of approximately 5% of Fund assets over the long term, subject to the availability of suitable opportunities, fiduciary considerations and value -for-money assessments. This reflects a proportionate level of place-based investment that could reasonably be delivered within Greater London and, where appropriate, the wider L ondon CIV pool area through pooled investment vehicles over time. The Fund ’s return objectives are best described as a return on Strategic Asset Allocation (SAA) with agreed benchmarks . The Fund expects LCIV to manage the whole portfolio in such a way as to meet the overall return objectives within the risk tolerances that have been set - balancing the different risk/return characteri stics across a diversified portfolio. The Fund Impact priorities include affordable housing, regeneration, SME growth and low-carbon infrastructure. 9. Consultation and Publication This ISS has taken account of advice from the LCIV, the actuarial valuation results, and relevant regulations and guidance. In line with the regulations and guidance the Committee have sought the views of relevant parties, including employers and the local pensions board, during the drafting process. The agreed ISS will be published on the website. March 2026

Classification: Public Pensions Committee 24 March 2026 INVESTMENT STRATEGY and FUND MANAGER PERFORMANCE (Part I) ITEM 9 Committee Pensions Committee Officer Reporting Tunde Adekoya, Finance Pete Carpenter, Finance Papers with this report LCIV Executive Summary 31 December 2025 Hymans Interim Valuation Report 31 December 2025 NT performance report on shared drive LCIV Performance reporting on shared drive HEADLINES The Fund officers and LCIV team have worked collaboratively to produce ‘easy to digest’, dashboard executive summary which draws out highlights of the performance and funding position as well as providing an easy access format for additional investment related information and statistics. Attached is the report for quarter ending 31 December 2025 for review and comment. RECOMMENDATIONS It is recommended that Pensions Committee: 1. Note the funding and performance update. Summary of Key Insights to LCIV Executive Report Funding & Liabilities - The funding level fell to 127%, a 19% quarterly decline, driven by a £230m increase in liabilities. This step change is a combination of the following factors: • The tracking of the funding position up to 30 September 2025 will have been based on the 31 March 2022 funding valuation results as a starting point (and using the assumptions and prudence levels adopted for that valuation). • When we provided the 31 December 2025 funding update, we updated our systems to now allow for the 31 March 2025 funding valuation results. This captures all the new membership data experience, financial and demographic assumptions and leads to step change once every three years. The biggest step change from the 2025 valuation is on the financial assumptions (i.e. the discount rate) as a result of the increased prudence level adopted compared to the previous valuation. Classification: Public Pensions Committee 24 March 2026 - Assets rose to £1.58bn, a 2.64% increase in market value. Investment Performance - Fund returned 2.8%, outperforming benchmark by 0.1%. - Strongest performers: LCIV Global Equity Value Fund; Absolute Return Fund. - Underperformance: LCIV Global Alpha Growth Paris‑Aligned Fund. Market Overview (Q4 2025) - Geopolitical tensions persisted (Ukraine, Middle East) but markets remained stable. - Growth stocks rebounded; Health Care sector led global performance. - Most G‑10 central banks cut rates; gold reached record levels. Asset Allocation - Global equities: 58% (above 51% strategic target). - Property overweight at 12% vs 7% target. Manager Monitoring - Value Fund strong; Alpha Growth Fund monitored for underperformance. - Absolute Return Fund strong full‑year performance. Fund Development - LCIV progressing Fit‑for‑the‑Future reforms. - New LCIV Global Core Equity Fund expected Q2 2026. Outlook for 2026 - Positive global growth expectations driven by AI investment and supportive fiscal/monetary policy. FINANCIAL IMPLICATIONS The financial implications are contained within the body of the report. The executive summary report is provided by LCIV without charge. LEGAL IMPLICATIONS There are no legal implications in the report.

Quarterly Executive Summary: Hillingdon Working together to deliver sustainable prosperity for the communities that count on us all Quarterly Executive Summary 30 September 2025 - 31 December 2025 127% £1.27bn The Funding level decreased by (19)% this quarter Funding and Liabilities1 The liabilities increased by £230m over the quarter. Pension Assets 1.58bn 2.64% market value this quarter. increase in market value this quarter 2 Investment Performance 2.8% 0.1% The Fund returned 2.8% this quarter. The Fund outperformed its benchmark by 0.1% this quarter 3 Assumptions to calculate liabilities 31 Mar 2022 31 Dec 2025 88 127Funding Level (%) (171) 340Deficit/Surplus (£m) • Ongoing OngoingFunding basis • 4.1 6.2Discount rate (%p.a.) • 2.7 2.3Pension increases (%p.a.) 1600000000 2400 1,431 1,210 1,070 1,100 1,140 1,060 1,050 1,170 1,230 1,120 1,140 1,090 1,080 1,060 1,040 1,2701,263 1,180 1,149 1,150 1,182 1,195 1,184 1,248 1,345 1,379 1,391 1,391 1,380 1,440 1,520 1,60088 98 107 105 104 113 113 107 109 120 120 128 128 136 146 127 900 1100 1300 1500 1700 1900 2100 2300 £(m) 0 20 40 60 80 100 120 140 160 Percentage Mar- 22 Jun- 22 Sep- 22 Dec- 22 Mar- 23 Jun- 23 Sep- 23 Dec- 23 Mar- 24 Jun- 24 Sep- 24 Dec- 24 Mar- 25 Jun- 25 Sep- 25 Dec- 25 Liabilit ies £m (LHS) Assets Value £m (LHS) Funding Level % (RHS) Salary increases are assumed to be 0.5% above pension increases, plus an additional promotional salary scale. • Discount rate methodology: Expected returns on the entire strategy over 20 years with a 70% likelihood. • Pension increase methodology: Expected CPI inflation over 20 years with a 50% likelihood. • Source: Hymans actuarial data. Source: Hymans actuarial data. Funding Level By Progression Source: Northern Trust custody data Source: Northern Trust custody data Source: Hymans actuarial data. Page 1 of 11 Quarterly Executive Summary: Hillingdon Working together to deliver sustainable prosperity for the communities that count on us allPerformance: Total Fund vs Benchmark Hillingdon 2.8 11.5 11.5 10.6 6.7 6.7 2.8 11.3 11.3 11.1 7.3 6.9 0.1 0.2 0.2 -0.5 -0.6 -0.2 -5 0 5 10 15 % 3 months YTD 1 year 3 years 5 years Since Incept ion Hillingdon Benchmark Relative Performance Manager Contribution to Total Return - Q4 2025 0.86 0.85 -0.09 0.38 0.21 0.18 0.00 0.00 0.00 0.05 0.11 -0.00 0.00 0.10 0.00 0.00 0.12 0.01 2.79 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 LGIM - World Developed Equity LGIM - Future World Fund LCIV Global Alpha Growth Paris Aligned LCIV Glb Equity Value Fund LGIM - UK Index Linked Gilts LCIV MAC Fund AEW UK UBS Property Indirect Real Estate LCIV Absolute Return Fund Blackstone Dislocation Fund Adam Street LGT Capital LCIV Infrastructure Fund Macquarie M&G Investments LCIV Private Debt Fund Permira Credit Total Source: Northern Trust custody data as of 31 December 2025. Returns are gross of fees and annualised for periods greater than 1 year. Source: Northern Trust custody data as of 31 December 2025. Returns are gross of fees. Page 2 of 11 Quarterly Executive Summary: Hillingdon Working together to deliver sustainable prosperity for the communities that count on us allCommentary Economies and Markets Update – Q4 2025 The final quarter of 2025 unfolded against a backdrop of persistent geopolitical strain and ongoing policy uncertainty. Hopes for diplomatic progress faded as the conflict in Ukraine remained unresolved and external tensions deepened, while developments in the Middle East added fresh concerns over broader regional instability. These geopolitical pressures—combined with shifting global trade dynamics, evolving central bank policy, and mounting government debt and deficit worries—ranked among investors’ leading anxieties throughout the year. Yet despite this challenging environment, financial markets remained relatively composed compared with earlier periods, as investors grew increasingly accustomed to navigating these key risks. As shown in the chart below market valuations for risk assets such as equities ended the year at elevated levels relative to history, with many risk-asset classes trading near the top of their valuation ranges over the past two decades. By contrast, bond yields closed 2025 at comparatively high levels versus their long-term history, resulting in much lower valuations across fixed income rates markets. Equities U.S. exceptionalism and market concentration remained prominent themes in Q4 2025. By year end, the ten largest U.S. companies accounted for roughly 39% of the S&P 500’s market capitalisation, with a combined valuation exceeding $23 trillion. For perspective, this figure is broadly equivalent to the total market value of all large cap equities across Canada, France, Germany, Japan, Switzerland, and the U.K. combined. The rapid expansion of AI related investment remained a key driver of equity markets—and at times a source of volatility. Major technology firms continued to ramp up spending on advanced hardware, data centre capacity, and next generation AI models. This sustained capex cycle supported equities with a growth tilt over recent years, with AI aligned companies outperforming. Growth stocks rebounded strongly from April, outpacing value, though the gap has narrowed in Q4 2025. This can be seen in the chart below. Source: Bloomberg, 31 December 2025 Equity market performance by sector Health Care led global sector performance in Q4 as investors rotated toward higher quality, defensive assets latterly. Slowing inflation and a more predictable monetary policy backdrop boosted sentiment toward businesses with resilient cash flows and less cyclicality. Improving margins and steady earnings revisions further supported the sector. Source: Bloomberg, 30 September 2025 Western European markets outperformed the U.S., with the FTSE 100 up 5.3% and Euro STOXX gaining 4.4%. Easing inflation and higher rate cut expectations helped drive a rotation into European markets, which benefited from more attractive valuations and improving macro conditions. Page 3 of 11 Quarterly Executive Summary: Hillingdon Working together to deliver sustainable prosperity for the communities that count on us all Fixed Income and Currencies On the monetary policy front, nine of the G-10 Central Banks reduced their respective policy rates in 2025 (the exception being Japan – who raised rates twice to levels last seen in 1995). Fiscally speaking, taxation policies varied greatly from one nation to the next, however, the themes of trade, tariffs, government deficits and debt burdens were ubiquitous. Globally, total government debt surpassed $100 trillion mark for the first time. Gold’s rally despite higher U.S. real rates reflects a structural break from its traditional rate sensitivity, dr iven instead by fiscal and geopolitical stress. Mounting concerns over unsustainable government debt, heavy central bank buying, and investor rotation away from sovereign bonds have strengthened demand for safe haven assets. Combined with policy uncertainty, a softer dollar outlook, and expectations of future easing, have pushed gold to new records and persistently elevated levels. This divergence can be seen in the chart below. Source: Bloomberg, 31 December 2025 In the U.S., President Trump maintained his forceful approach to trade policy. Earlier tariff measures began to settle into a more stable, though still restrictive, framework as the White House adjusted tariff schedules and technology related restrictions. Meanwhile, U.S.–China trade negotiations made modest progress, with Q4 2025 seeing tentative steps toward lowering some bilateral tariffs. Despite this, uncertainty around the trajectory o f U.S. trade policy remained high. The President continued to pressure the Fed even as it cut rates twice in Q4, lowering the funds rate to around 3.50– 3.75% by year end. The Bank of England also eased, trimming the Bank Rate by 25 bps in a narrow vote and striking a cautiously dovish tone, while the ECB kept policy unchanged and somewhat restrictive. Gilt yields drifted lower in line with other developed markets. Longer maturity bonds underperformed reflecting ongoing concerns over debt sustainability and inflation dynamics. UK Gilts: 10 year nominal and breakeven rates and real yields Source: Bloomberg, 31 December 2025 U.S. inflation was steady overall but uneven in composition in Q4 2025, with headline CPI easing to 2.7% in November and December after a brief rise in September. Monthly gains remained modest, and core CPI held around 2.6– 2.7%, indicating that while inflation stayed above target, the broader disinflation trend persisted into year end. In the U.K., CPI inflation eased to 3.2% during the same period, supported by lower energy base effects, but remained well above the Bank of England’s 2% target. Labour market softening has become a growing concern for the wider economic outlook. In the U.S., unemployment briefly rose to 4.5% and job openings fell to their lowest level since late 2024, signalling weakening demand for workers. The U.K. showed similar signs of cooling, with unemployment edging higher, vacancies declining, and surveys pointing to more cautious hiring; wage growth eased but remained above pre pandemic norms. The market continues to monitor the development of AI technologies for its potential impact on labour dynamics in the future. Page 4 of 11 Quarterly Executive Summary: Hillingdon Working together to deliver sustainable prosperity for the communities that count on us all Overall, 2025 closed with a global economy still expanding—albeit unevenly and with evidence of cooling in places—and with markets shaped by an international environment defined by strategic competition, technological advancement, protectionism and evolving alliances. Investment Manager Monitoring Equities The standout performer over the period was the LCIV Global Equity Value fund. This fund demonstrates the benefits of diversification across our ACS range. Value as a sector has struggled in recent years but the return of 7.30% in Q4 vs 3.38% for the benchmark represents excellent outperformance driven largely by strong stock selection by the underlying manager. The manager’s opportunistic approach to value investing worked very well in the current environment and enabled them to end the year beating the benchmark by 2%. As for the LCIV Global Alpha Growth Paris-Aligned Fund, having ended Q3 level with the benchmark, performance fell back in Q4 to end the year up nearly 10% on an absolute level but behind their bench by nearly 5%. This was particularly disappointing given the wider performance of growth sector. This relative underperformance was primarily driven by style effects, as highly valued stocks lagged lower-valuation peers. Fixed Income The LCIV MAC Fund performed in line with expectations in Q4. The investment grade exposures that currently take slightly more market beta than their benchmarks outperformed as a result in this “risk on” environment, while the high yield and non-Corporate bond elements of our portfolios took some risk off the table as spreads moved to historic tights resulting in marginal under performance vs the benchmarks. Annualised performance of 7.63%, 9.02% & 7.56% respectably represents good performance in the current market conditions. Multi Asset The Absolute Return fund was up 10.76%, outperforming its benchmark by over 3% for the year. These returns were primarily driven by a much more contrarian approach and saw gains driven by commodity exposures, gold & gold miners, UK and Japanese equities. Fund Development and Investment Manager Monitoring In line with the changes planned for Fit For Future implementation on 1 st April 2026, London CIV is undergoing a “rationalisation” of its ACS fund range. The transition of the LCIV Emerging Markets fund to a multi manager offering was successfully implemented in Q4 2025. London CIV is currently working on the launch of a new multi manager, LCIV Global Core Equity fund with a target go-live date for Q2 2026. This fund is intended to serve as a “one stop shop” equity offering for London CIV partner funds. Planned modifications are currently underway to enhance our Global Growth offerings and scoping out a new UK Equity product. Further changes which include the closure of the Equity Quality fund while the Diversified Growth fund are also under review as performance issues, changes to the proposition at the investment manager and its role in the Fit For Future environment come under scrutiny. Outlook Market commentators are broadly positive on Global growth prospects for 2026. There is a consensus expectation for further growth driven by the continued build out of AI infrastructure. This is expected to be supported by positive fiscal measures in the US, Europe & Japan and combined with accommodative monetary policy, at least in Q1 & Q2 of 2026, in the US. With the caveat surrounding ramifications of the politicisation ofthe election of the next Fed Chair. Despite most equity markets starting 2026 at record levels sentiment remains bullish and markets have moved upwards in January as the risk on trade remains. This is further supported by corporate balance sheets remaining largely robust and an array of positive earnings reports to start the year. Page 5 of 11 Quarterly Executive Summary: Hillingdon Working together to deliver sustainable prosperity for the communities that count on us all Manager Performance Asset Class / Fund Name 3 Months (%) 1 Year (%) 3 Years p.a. (%) Since Inception p.a. (%)Weight Fund Benchmark Fund Benchmark Fund Benchmark Fund Benchmark Inception Date Global Equities 58.4 LGIM - Future World Fund 3.6 3.5 15.0 14.8 17.3 17.0 12.0 11.824.3 23 Sep 2020 LGIM - Global Equities 3.6 3.6 17.4 17.6 18.1 18.4 10.6 10.824.2 31 Oct 2016 LCIV Global Equity Value Fund 7.2 3.8 15.8 15.6 0.0 0.0 14.4 16.35.3 28 Oct 2024 LCIV Global Alpha Growth Paris Aligned Fund (1.9) 3.8 9.1 15.8 12.1 19.7 2.5 14.64.6 22 Apr 2021 Property 12.4 LCIV/CBRE Indirect Real Estate 0.2 0.4 0.0 0.0 0.0 0.0 0.8 0.611.8 25 Apr 2025 AEW UK 0.0 0.8 6.3 5.1 3.9 3.0 5.7 5.10.6 30 Jun 2014 Multi-Asset Credit 9.2 LCIV MAC Fund 2.0 2.0 8.9 8.6 9.2 9.2 7.6 8.89.2 26 May 2022 Index Linked Gilts 6.4 LGIM - UK ILG 3.3 3.3 1.3 1.3 (2.1) (2.1) (2.2) (2.1)6.4 22 Feb 2017 Infrastructure 4.8 LCIV Infrastructure Fund 2.4 1.7 6.8 7.1 7.9 7.7 5.9 5.74.3 14 Nov 2019 Macquarie 0.7 1.7 0.5 7.1 12.6 7.7 9.3 4.50.5 30 Sep 2010 Private Debt 4.5 LCIV Private Debt Fund 3.1 1.5 12.2 6.0 7.6 6.0 7.7 6.04.0 16 Nov 2021 Permira 2.9 1.9 2.2 8.1 7.4 8.7 7.3 5.80.5 30 Nov 2014 M&G Investments 3.6 1.9 14.0 8.1 (13.4) 8.7 1.8 5.50.0 31 May 2010 Diversified Growth 2.4 LCIV Absolute Return Fund 2.1 1.0 10.9 4.4 1.1 4.8 5.0 1.62.4 28 May 2010 Opportunistic Dislocation 1.8 Blackstone Dislocation Fund 6.2 3.5 7.8 15.0 0.0 0.0 7.3 15.01.8 27 Mar 2024 Private Equity 0.2 Adam Street (0.3) 4.3 (7.1) 18.4 (10.5) 20.8 5.3 0.00.1 31 Jan 2005 LGT 0.1 4.3 5.5 18.4 2.0 20.8 9.9 0.00.1 31 May 2004 Source: Northern Trust custody data as of 31 December 2025 Returns are gross of fees and annualised for periods greater than 1 year. Page 6 of 11 Quarterly Executive Summary: Hillingdon Working together to deliver sustainable prosperity for the communities that count on us all Asset Allocation Actual Asset Allocation vs Target Allocation by Asset Class As of 31 December 2025 -4 -2 0 2 4 6 8 (%) Private Equity Cash & Cash Equivalents Diversified Growth Opportunist ic Dislocat ion Private Debt Index Linked Gilts Property Infrastructure Mult i-Asset Credit Global Equit ies Source: Northern Trust custody data as of 31 December 2025 Asset Class Actual Asset Allocation (%) 31 December 2025 Actual Asset Allocation (%) 31 December 2025 vs Strategic Asset Allocation (%) Strategic Asset Allocation (%) 31 December 2023 Actual Asset Allocation (%) 30 September 2025 Change in Asset Allocation (%) Quarter on Quarter Global Equities 58 +751 57 0 Multi-Asset Credit 9 -312 9 (0) Infrastructure 5 -38 5 0 Property 12 +57 13 (0) Index Linked Gilts 6 -17 6 0 Private Debt 4 -15 5 (0) Opportunistic Dislocation 2 -35 2 (0) Diversified Growth 2 +20 2 (0) Cash & Cash Equivalents 1 +10 1 0 Private Equity 0 +00 0 (0) Source: Northern Trust custody data as of 31 December 2025 Page 7 of 11 Quarterly Executive Summary: Hillingdon Working together to deliver sustainable prosperity for the communities that count on us allAsset Allocation Changes - Q4 2025 Asset Class Market Value 30 September 2025 (£'m) Net contribution* (£'m) Income (£'m) Appreciation (£'m) Market Value 31 December 2025 (£'m) Global Equities - - 911881 30 Property - 1 193193 - Multi-Asset Credit - - 143140 3 Index Linked Gilts - - 10097 3 Infrastructure 2 1 7571 1 Private Debt (2) 2 7171 - Diversified Growth - - 3736 1 Opportunistic Dislocation (6) 3 2832 (1) Cash & Cash Equivalents 4 - 2016 - Private Equity - - 33 - 1,540 1,580Total (3) 6 38 Source: Northern Trust * Net contributions include cash contributions/distributions, securites/receipts, fee/fee rebates, inter account transfers for consolidations and benefit payments. Copied history of backloaded data may not display the correct contributions/withdrawals creating misrepresentation. Page 8 of 11 Quarterly Executive Summary: Hillingdon Working together to deliver sustainable prosperity for the communities that count on us allAssessment Framework As of 31 December 2025 ACS Sub-Fund LCIV Global Alpha Growth Paris Aligned Fund LCIV Global Equity Value Fund LCIV Absolute Return Fund Investment Manager Baillie Gifford Wellington Ruffer Skills tests Resourcing Investment process Responsible investment and engagement Risk Management Enabling tests Business Management Strategy Execution Skills proposition: overall rating 2 1 2 Value proposition: rating 3 N/A 3 Private Markets Fund LCIV Infrastructure Fund LCIV Private Debt Fund LCIV Private Debt Fund Investment Manager Stepstone Churchill Pemberton Skills tests Resourcing Strategy and investment process RI and engagement Risk management Deployment Business Management Skills proposition: overall rating Value proposition: rating Source: London CIV. Value Proposition: Rating of Sub-Funds Skills Proposition: Overall Rating of investment managers Rating 1 Key / Definition Achieving objectives. Formal annual reviews of Skills factors and regular monitoring cadence and intensity.2 Best in class capabilities, robust investment, RI and risk management processes. Expected to achieve objectives. Add to Prospects list, prioritise for selection for LCIV funds. Not achieving objective, underperforming benchmark or reference index; Areas of potential improvement flagged and monitored through regular updates and formal annual reviews of Skills factors. Key / Definition 3 Strong capabilities and processes, room for improvement in certain criteria which are flagged and monitored. Expected to achieve objectives. Eligible for Prospects lists and LCIV funds. Not achieving objective, underperforming benchmark or reference index, trend in rolling 3 and 5-year relative performance * is improving; in-depth review of Skills factrors triggered and repeated every 6 months (at least). Monitoring intensified. Action points and milestones agreed. EIC reviews progress every quarter. 4 Skill assessment identifies shortcomings which could hinder achievement of objectives. Position at risk. Not eligible for Prospects lists, selection for LCIV funds or allocations of additional capital. Monitoring intensified. Action points and milestones agreed with investment manager and communicated to investors. EIC reviews progress every quarter. Not achieving objective, underperforming benchmark or reference index, trend in rolling 3 and 5-year relative performance * is static or negative; Skills factors reassessed and challenged by EIC. Actions and milestones agreed and communicated to investors. * Since inception data used if performance record does not extend to 3 or 5 years. Serious concerns about capabilities and/or execution of key processes. Not expected to achieve objectives. Initiate manager termination process. Page 9 of 11 Quarterly Executive Summary: Hillingdon Working together to deliver sustainable prosperity for the communities that count on us all Disclaimer Important information London LGPS CIV, Fourth Floor, 22 Lavington Steet, London, SE1 0NZ Issued by London LGPS CIV Limited, which is authorised and regulated by the Financial Conduct Authority number 710618. London CIV is the trading name of London LGPS CIV Limited. Thi s material is for limited distribution and is issued by London LGPS CIV and no other person should rely upon the information contain ed within it. This document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution would be unlawful under the laws governing the offer of units in the collective investment undertakings. Any distribution, by whatever means, of this document and related material to persons who are not eligible under the relevant laws governing the offer of unit s in collective investment undertakings is strictly prohibited. Any research or information in this document has been undert aken and may have been acted on by London CIV for its own purpose. Th e result of such research and information are being made avail able only incidentally. The data used may be derived from various sources, and assumed to be correct and reliable, but it has not been independently verified; its accuracy and completeness is n ot guaranteed, and no liability is assumed for any direct or consequential losses arising from its use. The views expressed do not constitute investment or any othe r advice and are subject to change and no assurances are made as to their accuracy. Past performance is not a guide t o future performance. The value of investments and the income from th em may go down as well as up and you may not get back the amount you invested. Changes in the rates of exchange between currenci es may cause the value of investments to diminish or increase. Fluc tuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Level and basis of taxation may change from time to time. Subject to the express requirements of any other agreement, we will not provide notice of any changes to our personnel, structur e, policies, process, objectives or, without limitation, any other matter contained in this document. No part of this material may be produced, reproduced, stored in retrieval system, published on any websites or transmitted in any form or by any means, electronic, mechanical, recording or otherwise, without the prior written consent of London LGPS CIV. London LGPS CIV Limited. is a private limited company, registered in England and Wales, registered number 9136445. About London CIV London LGPS CIV Limited ('London CIV'), established in 2015 by London Local Authorities manages London Local Government Pension Scheme ('LGPS') assets. London CIV is one of eight U.K. LGPS asset pooling companies. The London Boroughs and City of London who are the 32 Shareholders, are also our clients ('Partner Funds'). Fourth Floor, 22 Lavington Street, London, SE1 0NZ Company No. 9136445 www.londonciv.org.uk Page 10 of 11 Quarterly Executive Summary: Hillingdon Working together to deliver sustainable prosperity for the communities that count on us all Appendix Asset Allocation Asset Class / Fund Name Market Value (30 September 2025) £m Net Contributions £m Income £m Fees £m Appreciation £m Market Value (31 December 2025) £m Weights (%) (30 September 2025) Weights (%) (31 December 2025) Change in weights (%) Strategic Asset Allocation (%) 31 Dec 2023 Asset Allocation vs Strategic Asset Allocation (%) 31 Dec 2023 Real Estate Long Income - - - - - - - - - - - LGIM - LPI Income Property - - - - - - - - - % % Global Equities 881 - - - 30 911 57 58 0.44 51 7 LCIV Global Alpha Growth Paris Aligned Fund 73 - - - (1) 72 5 5 -0.21 % % LCIV Global Equity Value Fund 76 - - - 6 82 5 5 0.22 % % LGIM - Future World Fund 366 - - - 13 379 24 24 0.21 % % LGIM - Global Equities 365 - - - 13 378 24 24 0.22 % % Index Linked Gilts 97 - - - 3 100 6 6 0.04 7 - LGIM - UK ILG 97 - - - 3 100 6 6 0.04 % % Multi-Asset Credit 140 - - - 3 143 9 9 -0.06 12 (3) LCIV MAC Fund 140 - - - 3 143 9 9 -0.06 % % Property 193 - 1 - - 193 13 12 -0.29 7 5 AEW UK 9 - - - - 9 - - -0.02 % % LCIV/CBRE Indirect Real Estate 183 - 1 - - 184 12 12 -0.27 % % UBS Property 0 - - - - - - - 0.00 % % Diversified Growth 36 - - - 1 37 2 2 -0.01 - 2 LCIV Absolute Return Fund 36 - - - 1 37 2 2 -0.01 % % Private Equity 3 - - - - 3 - - -0.03 - - Adam Street 2 - - - - 1 - - -0.02 % % LGT 1 - - - - 1 - - -0.01 % % Infrastructure 71 2 1 - 1 75 5 5 0.11 8 (3) LCIV Infrastructure Fund 63 3 1 - 1 67 4 4 0.15 % % Macquarie 8 - - - - 8 - - -0.04 % % Private Debt 71 (2) 2 - - 71 5 4 -0.13 5 - LCIV Private Debt Fund 61 - 2 - - 63 4 4 -0.01 % % M&G Investments 0 - - - - - - - 0.00 % % Permira 9 (2) - - - 8 - - -0.12 % % Cash & Cash Equivalents 16 4 - - - 20 1 1 0.24 - 1 Non-custody 16 4 - - - 20 1 1 0.24 % % Opportunistic Dislocation 32 (6) 3 - (1) 28 2 2 -0.32 5 (3) Blackstone Dislocation Fund 32 (6) 3 - (1) 28 2 2 -0.32 % % Total 1,540 - 1,580 100 100(3) 6 38 Source: Northern Trust custody data as of 31 December 2025 Page 11 of 11

London Borough of Hillingdon Pension Fund Funding update report at 31 December 2025 This report is addressed to the Administering Authority of the London Borough of Hillingdon Pension Fund (the Fund). This document should be read in conjunction with the fund's Funding Strategy Statement. The purpose of this report is to provide the funding position of the London Borough of Hillingdon Pension Fund as at 31 December 2025 and show how it has changed since the previous valuation at 31 March 2025. This report has not been prepared for use for any other purpose and should not be so used. The report should not be disclosed to any third party except as required by law or regulatory obligation or with our prior written consent. Hymans Robertson LLP accept no liability where the report is used by or disclosed to a third party unless such liability has been expressly accepted in writing. Where permitted, the report may only be released or otherwise disclosed in a complete form which fully discloses the advice and the basis on which it is given. The figures presented in this report are prepared only for the purposes of providing an illustrative funding position and have no validity in other circumstances. This report also contains the data and assumptions underlying the results and the reliances and limitations which apply to them. Surplus/(deficit) £0.34bn+£0.13bn vs last valuation Funding level 127%+9% vs last valuation Required return 4.7%-0.5% vs last valuation Return likelihood 89%+3% vs last valuation 12 February 2026 Page 1 of 12 Results Funding position update The table on this page shows the estimated funding position at 31 December 2025 on the Fund's Ongoing basis (as defined in the Fund's FSS). The table also shows what future investment return would be required for the Fund to be 100% funded, along with the likelihood of the investment strategy achieving this return. The equivalent results at 31 March 2025 on the Ongoing basis are shown for comparison. An increase in the likelihood corresponds to an improvement in the funding position (and vice versa). Please note that the asset value at 31 December 2025 shown in this report may differ to the actual asset value at that date. The asset value in this report is an estimate based on a rollforward from 31 March 2025 using estimated cashflows (see section A2) and estimated investment returns (see section A3). This approach ensures the asset value is consistent with the liabilities and gives a more reliable estimate of the funding position than if the actual asset value was used. Ongoing basis 31 March 2025 31 December 2025 Assets 1.41 1.60 Liabilities Active members 0.28 0.33 Deferred pensioners 0.28 0.30 Pensioners 0.64 0.64 Total liabilities 1.20 1.27 Surplus/(deficit) 0.21 0.34 Funding level 118% 127% Required return (% pa)* 5.2% 4.7% Likelihood of achieving this return 86% 89% * Future investment return for funding level to be 100% Monetary amounts in £bn 12 February 2026 Page 2 of 12 Understanding the funding level To help better understand the funding level, the chart below shows how the funding level varies with the assumed rate of future investment returns at 31 March 2025 and 31 December 2025. The percentages next to each point on the lines show the likelihood of the investment strategy achieving that return at the respective date (for further details see section A4). The solid-coloured point indicates the funding level on the Fund's chosen assumptions. Assumed future investment return (% pa) Funding level 95% 90% 85% 80% 75% 70% 65% 60% 55% 50% Last valuation 31 Mar 2025 31 Dec 2025 3.5% 4.5% 5.5% 6.5% 7.5% 8.5%60% 80% 100% 120% 140% 160% 180% 12 February 2026 Page 3 of 12 Funding level progression The chart below shows how the funding level has progressed between 31 March 2025 and 31 December 2025. It allows for changes in market conditions and other factors described in Appendix B. Funding level FundingLevel 24 Mar 07 Apr 21 Apr 05 May 19 May 02 Jun 16 Jun 30 Jun 14 Jul 28 Jul 11 Aug 25 Aug 08 Sep 22 Sep 06 Oct 20 Oct 03 Nov 17 Nov 01 Dec 15 Dec 29 Dec 12…110% 115% 120% 125% 130% 135% 140% 12 February 2026 Page 4 of 12 Next steps Change in funding level since the last valuation is to be expected due to the volatile nature of both the Fund's assets and liabilities. However, understanding the factors underlying the change may help inform the Fund's ongoing monitoring of its funding strategy and risk management. The results at 31 December 2025 in this report are estimates based on rolling forward the fund's funding position from 31 March 2025. You should understand the methodology and limitations of this approach described in Appendices B and C, and that factors such as changes to the investment strategy and membership profile may not be fully reflected in the results. No decisions should be made solely on the results in this report. Please get in touch with your Hymans Robertson contact if you wish to discuss the results in this report further. 12 February 2026 Page 5 of 12 Appendix A - Data and assumptions A.1 Membership data The membership data underlying the figures in this report was supplied by the fund for the purpose of the valuation at 31 March 2025 and is summarised below: 31 March 2025 Number Avg. age Accrued benefit (£k pa) Payroll (£k pa) Active members 8,454 55.9 29,976 198,053 Deferred pensioners 15,172 55.2 27,092 Pensioners and dependants 8,641 70.8 54,260 Average ages are weighted by liability. The membership is assumed to evolve over time in line with the demographic assumptions described in the Fund's FSS. Please see Appendix B for details of the rollforward methodology which includes the estimated changes in membership data which have been allowed for. A.2 Cashflows since the valuation at 31 March 2025 We have allowed for the following cashflows in estimating the assets and liabilities at 31 December 2025. Estimated cashflows (£k) 31 March 2025 to 31 December 2025 Employer contributions 41,723 Employee contributions 10,079 Benefits paid 44,076 Cashflows are assumed to be paid daily. Contributions are based on the estimated payroll, certified employer contributions (including any lump sum contributions) and the average employee contribution rate at 31 March 2025. Benefits paid are projections based on the membership at 31 March 2025. 12 February 2026 Page 6 of 12 A.3 Investment returns since the valuation at 31 March 2025 Investment strategy Actual/ index From To Return Whole fund Actual 1 April 2025 31 December 2025 13.27% The total investment return for the whole period is 13.27%. A.4 Financial assumptions Assumption 31 March 2025 31 December 2025 Funding basis Ongoing Ongoing Discount rate (% pa) 6.3% 6.2% Pension increases (% pa) 2.3% 2.3% Salary increases are assumed to be 0.5% pa above pension increases, plus an additional promotional salary scale. For further details on the methodology used to derive the assumptions, please see the Fund's FSS. 12 February 2026 Page 7 of 12 A.5 Demographic assumptions Life expectancy (years) Ongoing basis Male Female Pensioners 22.2 24.8 Non-pensioners 22.8 25.8 Life expectancies are from age 65 and are based on the Fund's membership data at 31 March 2025. Non-pensioners are assumed to be aged 45 at that date. All other demographic assumptions are the same as at the most recent valuation at 31 March 2025. 12 February 2026 Page 8 of 12 Appendix B - Technical information B.1 Funding update methodology The last formal valuation of the fund was carried out as at 31 March 2025. The results in this report are based on rolling forward the results of the last formal valuation to 31 December 2025 using approximate methods. The roll-forward allows for: The CARE, deferred and pensioner liabilities at 31 December 2025 include a total adjustment of 1.5% to reflect the difference between actual September CPI inflation values (up to 30 September 2025) and the assumption made at 31 March 2025. The adjustment for each year's actual inflation is applied from 31 October 2025 that year, cumulative with prior years' adjustments, which may lead to step changes in the funding level progression chart. In preparing the updated funding position at 31 December 2025, the membership is assumed to have changed since 31 March 2025 in line with the demographic assumptions described in the Fund's FSS. No allowance has been made for any other changes. The principal reason for this is that insufficient information is available to make any such adjustment. Significant membership movements, or any material difference between estimated inputs and actual experience, may affect the reliability of the results. The Fund should consider whether any such factors mean that the roll forward approach may not be appropriate. No allowance has been made for any early retirements or bulk transfers since 31 March 2025. There is also no allowance for any changes to Local Government Pension Scheme (LGPS) benefits except where noted in the formal valuation report or Funding Strategy Statement. Where the Fund has moved to a different funding basis since 31 March 2025 this may give rise to step changes in the funding level on the date of the change. estimated cashflows over the period as described in section A.2 investment returns over the period (estimated where necessary) as described in section A.3 changes in financial assumptions as described in section A.4 estimated additional benefit accrual. 12 February 2026 Page 9 of 12 B.2 Sensitivity of results to assumptions The results are particularly sensitive to the real discount rate assumption (the discount rate net of pension increases) and the assumptions made for future longevity. If the real discount rate used to value the accrued liabilities was lower then the value placed on those liabilities would increase. For example, if the real discount rate at 31 December 2025 was 1.0% pa lower then the liabilities on the Ongoing basis at that date would increase by 17.0%. In addition, the results are sensitive to unexpected changes in the rate of future longevity improvements. If life expectancies improve at a faster rate than allowed for in the assumptions then, again, a higher value would be placed on the liabilities. An increase in life expectancy of 1 year would increase the accrued liabilities by around 3-5%. 12 February 2026 Page 10 of 12 Appendix C - Reliances and limitations The report should not be disclosed to any third party except as required by law or regulatory obligation or with our prior written consent. Hymans Robertson LLP accept no liability where the report is used by or disclosed to a third party unless such liability has been expressly accepted in writing. Where permitted, the report may only be released or otherwise disclosed in a complete form which fully discloses the advice and the basis on which it is given. The last formal valuation of the fund was carried out as at 31 March 2025 and this report relies upon the results of that valuation. The reliances and limitations that applied to that valuation apply equally to these results. The results of the valuation have been projected forward using approximate methods. The margin of error in these approximate methods increases as time goes by. The method may not be appropriate if there have been significant data changes since the previous formal valuation (for example redundancy exercises, significant unreduced early retirements, ill health retirements and bulk transfers). The methodology assumes that actual experience since the valuation at 31 March 2025 has been in line with assumptionss. The data used in this exercise is summarised in Appendix A. Data provided for the purposes of the formal valuation at 31 March 2025 was checked at the time for reasonableness and consistency with other sources. Data provided since then (eg actual investment returns) has been used as-is. The data is the responsibility of the Administering Authority and the results rely on the data. The results in this schedule are based on calculations run on 12 February 2026 using the data set out in Appendix A. Any other factors coming to light after this report was prepared have not been allowed for and could affect the results. If any data has materially changed since 12 February 2026 the results could be materially different if they were recalculated. Some financial assumptions may be based on projections from our Economic Scenario Service (ESS) model which is only calibrated at each month-end. Results between month ends use the latest available calibration, adjusted in line with the movement in market conditions. This adjustment is approximate and there may be step changes at month-end dates when a new ESS monthly calibration is factored in. The methodology underlying these calculations mean that the results should be treated as indicative only. The nature of the fund's investments means that the surplus or deficit identified in this report can vary significantly over short periods of time. This means that the results set out should not be taken as being applicable at any date other than the date shown. 12 February 2026 Page 11 of 12 During periods of high market volatility, actual asset returns may differ more significantly from the market index returns we use to estimate them from day to day. This means that estimated asset values will be less reliable in such periods, particularly at dates not coinciding with periods of known returns. If you want to make a decision based on your current funding position, we strongly recommend you get an up to date valuation from your asset manager and speak to your Hymans Robertson LLP consultant. As with all modelling, the results are dependent on the model itself, the calibration of the underlying model and the various approximations and estimations used. These processes involve an element of subjectivity and may be material depending on the context. No inferences should be drawn from these results other than those confirmed separately in writing by a consultant of Hymans Robertson LLP. Decisions should not be based solely on these results and your Hymans Robertson LLP consultant should be contacted to discuss any appropriate action before any is taken. Hymans Robertson LLP accepts no liability if any decisions are based solely on these results or if any action is taken based solely on such results. Data used directly or indirectly in the preparation of these results may have been sourced from third parties, including Bloomberg and iBoxx (IHS Markit). This report complies with the relevant Technical Actuarial Standards. Hymans Robertson LLP is a limited liability partnership registered in England and Wales with registered number OC310282. A list of members of Hymans Robertson LLP is available for inspection at One London Wall, London EC2Y 5EA, the firm's registered office. Authorised and regulated by the Financial Conduct Authority and licensed by the Institute and Faculty of Actuaries for a range of investment business activities. Hymans Robertson is a registered trademark of Hymans Robertson LLP. 12 February 2026 Page 12 of 12

Classification: Public Pensions Committee 24 March 2026 RESPONSIBLE INVESTMENTS UPDATE ITEM 10 Committee Pensions Committee Officer Reporting Babatunde Adekoya, Finance Papers with this report Full manager voting - Shared drive. LGIM Engagement Report Q4 2025 – Shared drive LAPFF Engagement Report Q4 2025 – Shared drive HEADLINES Environmental, Social, and Governance (ESG) refers to the three central factors in measuring the sustainability and societal impact of an investment in a company or business. These criteria help to better determine the future financial performance of companies (return and risk). The purpose of this report is to provide information on how managers entrusted with investing the Pension Fund assets are implementing their ESG policies and demonstrate their commitment to ensuring it is a cogent part of their investment process. In addition, the report details the progress on the UK Stewardship Code project, policy updates and other relevant information. RECOMMENDATIONS It is recommended that Pensions Committee: 1. Note the fund managers’ ESG activities and compliance efforts 2. Note LCIV & LAPFF activities SUPPORTING INFORMATION Voting and Engagement Fund managers carry out proxy voting on the Pension Fund’s behalf. Below is a breakdown of voting statistics by LGIM, and London CIV (Ruffer, Wellington and Baillie Gifford). Classification: Public Pensions Committee 24 March 2026 Fund Managers Voting Breakdown Q4, 2025 LCIV Meetings Resolutions Votes With Against Abstention/non -voting Dec-25 LCIV - Ruffer 15 140 120 13 7 LCIV - Baillie Gifford 9 110 92 7 11 LCIV - Wellington 9 82 69 13 0 33 332 281 33 18 % 84.64 9.94 5.42 LGIM Meetings Resolutions Votes With Against Abstention Dec-25 2,566 16,771 11,212 5,100 459 2,566 16,771 11,212 5,100 459 % 66.85 30.41 2.74 The volume of meetings attended, and resolutions voted on by all the fund managers shown above , encapsulates their commitment to ESG issues and demonstrat es alignment of their stewardship activities with their own investment beliefs, policies, and guidelines. Through this approach, they seek to be active owners on behalf of their clients, by encouraging good governance and a high standard of corporate practices. The voting breakdown above indicates LGIM have voted against proposed management resolutions on 30% of voting opportunities and supported resolutions on approximately 67% of occasions. The London CIV , through three equities portfolio managers, Wellington and Baillie Gifford, absolute return manager, Ruffer combined to back various management resolutions on 87% of voting opportunities and about 10% against the resolutions proposed by company managements. Abstentions for LGIM and LCIV were 3% and 5% respectively. Classification: Public Pensions Committee 24 March 2026 The snapshots below further contextualise the voting patterns and issues addressed with voting decisions by the managers above. Classification: Public Pensions Committee 24 March 2026 Classification: Public Pensions Committee 24 March 2026 Classification: Public Pensions Committee 24 March 2026 Classification: Public Pensions Committee 24 March 2026 Engagement ESG factors play an increasingly important role in determining the performance of certain assets. Pension Fund asset managers, as part of their ESG commitments undertake various engagement activities in their holistic approach in making investment decision s. These activities aim to affect changes within invested companies where it is deemed necessary or to complement existing practices. LGIM Holding boards to account To be successful, companies need to have people at the helm who are well equipped to create resilient long-term growth. By voting and engaging directly with companies, LGIM encourages management to control risks while seeking to benefit from emerging opportunities. The manager aims to safeguard and enhance clients’ assets by engaging with companies and holding management to account for their decisions. Voting is an important tool in this process, and one which they use extensively. Creating sustainable value LGIM believe it is in the interest of all stakeholders for companies to build sustainable business models that are also beneficial to society. They work to ensure companies are well -positioned for sustainable growth, and to prevent market behaviour that destroys long-term value. Their investment process includes an assessment of how well companies incorporate relevant ESG factors into their everyday thinking. The manager engages directly and collaboratively with companies to highlight key challenges and opportunities, and support strategies that seek to deliver long -term success. Promoting market resilience As a long-term investor for its clients, it is essential that markets (and, by extension, the companies within them) can generate sustainable value. In doing so, LGIM believe companies should become more resilient amid change and therefore, seek to benefit the whole market. They use their influence and scale to ensure that issues affecting the value of clients’ investments are recognised and appropriately managed. This includes working with key policymakers, such as governments and regulators, and collaborating with asset owners to bring about positive change across markets. Global Investment Stewardship themes LGIM Investment Stewardship activity is structured around six core themes: • Climate: Keeping 1.5°C alive • Nature: Supporting a world that lives in harmony with nature, recognising the economic value of natural capital • People: Improving human capital across the corporate value chain Classification: Public Pensions Committee 24 March 2026 • Health: Safeguarding global health to limit negative consequences for the global economy • Governance: Strengthening accountability to deliver stakeholder value • Digitisation: Establishing minimum standards for how companies manage digitisation-related risks The manager believes these themes are financially material to their clients’ portfolios, often pose systemic risks and opportunities, and cover areas where LGIM as an asset manager can influence change. Net Zero Asset Managers Initiative LGIM has committed to remain signatory to the Net Zero Asset Managers Initiative, reflecting their long‑standing belief that climate risk is investment risk. The manager is focused on supporting clients through robust climate -risk mitigation, active stewardship, and investment in economically viable transition opportunities. The Net Zero Asset Managers (NZAM) Initiative is a global, voluntary coalition enabling asset managers to commit to and transparently report on strategies that support net -zero emissions. After facing political and regulatory challenges, it relaunched in 2026 with an updated, more flexible framework that continues to align with the goals of the Paris Agreement while accommodating global diversity in regulation and practice. The initiative has over 250 managers as signatories. NZAM was suspended in January 2025 due to political and regulatory pressures particularly rising anti‑ESG sentiment in the U.S. and after major departures such as BlackRock. Engagement Focus LAPFF During the quarter LAPFF engaged various companies worldwide on issues covering all aspects of ESG during the quarter under review. Below are three examples of their engagement activities in Q4 2025. Environment Climate change represents a systemic and financially material risk for long ‑term investors. LAPFF believes that companies with credible, measurable, and transparent climate transition plans are better equipped to manage these risks. Although more companies now publish transition plans, many still lack science‑based targets, delivery pathways, or transparent financial alignment. LAPFF considers regular shareholder oversight—via “Say on Climate” votes at least every three years —to be essential for accountability, especially for minority shareholders. Classification: Public Pensions Committee 24 March 2026 FTSE 100 (Minus Investment Trusts) Objective: LAPFF aims to ensure that companies are effectively planning for business decarbonisation and managing transition risks. The Forum engages issuers to develop, disclose, and implement robust climate transition strategies. LAPFF expects climate plans to cont ain science ‑based, quantifiable targets, credible delivery pathways, and transparent disclosure of climate‑related financial impacts. Achieved: LAPFF and CCLA coordinated a letter to FTSE 100 companies (excluding investment trusts), urging them to offer shareholders a vote on their climate transition plans at least once every three years. The initiative was backed by investors representing £3.1 trillion AUM. • 71 out of 95 companies responded. • Eight companies committed to holding a vote: • Legal & General, Anglo American, Glencore, SSE, National Grid, United Utilities, Centrica, and Shell — with five committing to a triennial cycle. • Six more companies stated they are keeping the option under review. • LAPFF held engagement meetings with Schroders, Lloyds, SSE, Barclays, Shell, and Standard Chartered. • Schroders: strong climate governance but opposed to a formal vote. • Lloyds: integrates climate into overall strategy; reviews voting annually but has not adopted a standalone vote. • Barclays: maintains net-zero targets and sector pathways; keeping vote option under review. • Shell: reaffirmed a shareholder vote in 2027 following its 2026 strategy update. • Standard Chartered: continues to deliver against its 2022 shareholder ‑approved roadmap. • SSE: confirmed next vote at the 2028 AGM, with annual progress reporting and strong governance arrangements. In Progress LAPFF views climate transition plan oversight as an evolving governance responsibility rather than a one ‑off activity. The Forum will monitor climate -related resolutions throughout 2026 and continue dialogue with issuers whose plans are voted on or significantly changed. A particular concern is the trend of companies weakening, pausing, or withdrawing previously stated climate commitments without giving shareholders the opportunity to approve revised plans. LAPFF will expect clear justification, enhanced disclosure, and evidence of thorough board ‑level oversight whenever companies alter or step back from commitments. Social Vale Objective LAPFF continues to lead investor engagement with Vale under the PRI Advance Initiative, alongside EOS at Federated Hermes, PIMCO, Schroders, Erste Asset Classification: Public Pensions Committee 24 March 2026 Management, and Pensioenfonds Detailhandel. The engagement aims to strengthen Vale’s governance and management of human rights risks, with a particular focus on: • Effectiveness of grievance mechanisms • Delivery of remediation • Credibility of employee and community feedback related to the Brumadinho and Mariana dam disasters During the quarter, investors met with Vale to discuss results from the second Community Perception Survey (2024) and how these insights inform risk management and operational improvements. The engagement occurred against the backdrop of the 10-year annive rsary of the Mariana disaster, reinforcing expectations for demonstrable, outcomes-based progress for affected communities. Achieved PRI Advance Q4 meeting focused on: • Community and employee engagement • Findings from Vale’s 2024 Community Perception Survey (which expanded to include traditional communities) Vale acknowledged key findings, including: • Declines in perceived quality of life and general trust since 2022 • Improvements in perceived average income • Ongoing analysis to translate survey insights into operational actions Investors sought updates on Mariana and Brumadinho reparations, particularly around community satisfaction measurement. Vale reported that the Renova Foundation, created in 2016 under the TTAC to deliver remediation and compensation, is now being liquidated, with remaining programmes transitioning to Samarco Mineração and relevant public authorities. Investors also raised 2025 media reports (FT/Reuters) that BHP and Vale had offered $1.4bn to settle UK litigation related to Mariana —though neither company has publicly commented. In Progress LAPFF will continue engagement into 2026, pressing Vale for: • Clear, outcome-based evidence that 2024 survey insights are resulting in real, site-level changes • Transparency on how priorities are set, what actions are taken, and how progress is measured and disclosed • Improvements specifically in: 1. Trust 2. Quality of life 3. Grievance mechanism effectiveness Engagement will incorporate external perspectives, including findings from Earthworks’ April 2025 report , “The Truth About Vale ”, which stresses the need for reconciling company statements with community experiences and demonstrating verified outcomes. Classification: Public Pensions Committee 24 March 2026 Governance United Utilities Objective: LAPFF continued its engagement with UK water utilities in Q4, with a focus on United Utilities (UU). The objective was to deepen understanding of: • Plans and governance to reduce storm overflow and sewage discharges, given persistently high spill levels in 2024. • Preparedness for regulatory change, including the Government’s decision to abolish Ofwat and move toward a single, more powerful regulator. • Responses to emerging environmental risks, particularly PFAS and other “forever chemicals,” following research showing widespread contamination— TFA detected in 98% of UK river samples. • Ensuring that increased investment, funded partly by higher customer bills, is matched by improvements in water quality, risk management, and accountability. Achieved Engagement with the Chair of United Utilities, Sir David Higgins, delivered meaningful insights into: • Storm Overflow Reduction • UU outlined its investment programme and progress: • High-priority overflows reduced from ~40 to 26, targeting 18 by 2030 and 10 by 2050. Monitoring & Public Reporting United Utilities already uses per -second monitoring, ahead of peers who have historically reported at lower resolution. Move to a common two -minute sector standard will reshape comparability and public perceptions. Resilience & Enabling Infrastructure Around one -third of spills are linked to power failures. United Utilities is deploying backup generators at vulnerable sites as part of its mitigation strategy. Regulatory Landscape United Utilities highlighted risks of fragmented oversight between Ofwat and the Environment Agency (“two regulators not talking”). The company sees opportunities for improved coordination even before full regulatory reform. United Utilities is preparing for tighter alignment of environmental and economic regulation during the current price control period. FINANCIAL IMPLICATIONS ESG initiatives included within the Pension Fund budget. LEGAL IMPLICATIONS Legal implications are included in the report.

Classification: Public Pensions Committee 24 March 2026 Pension Fund Risk Register Item 11 Committee Pension Committee Officer Reporting Pete Carpenter - Finance Tunde Adekoya, Finance Papers with this report Pension Fund Risk Register Open & Closed Risk Matrix HEADLINES The purpose of this report is to identify to the Pension Committee the main risks to the Pension Fund and to enable them to monitor and review risks going forward (see appendices). RECOMMENDATIONS It is recommended that Pensions Committee: • Consider and agree the Risk Register in terms of the approach, the specific risks identified, and the measures being taken to mitigate those current risks. • Note the format agreeing the retired risks and those which remain open SUPPORTING INFORMATION Risk Register The Council’s risk management software, JCAD, permits all 14 risks to be classified into two categories, open and closed risks. The software allows risks that are being managed as , day-to-day, business as usual items, to be retired but maintained in the background as a record. In the event the risk requires active management it can then easily be re-introduced. Whilst open risks are constantly monitored and reviewed every three months, to ensure the status are still aligned with the risk measurement. Attached are two reports covering open and retired/closed risks: Closed risks being managed as business as usual or tolerated include: • PEN 1 - Fund assets fail to deliver returns in line with the anticipated returns underpinning the valuation • PEN 2 - Inappropriate long-term investment strategy • PEN 3 - Active investment manager under-performance relative to benchmark • PEN 4 - Inflation - Pay and price inflation significantly more than anticipated Classification: Public Pensions Committee 24 March 2026 • PEN 5 - Pensioners living longer • PEN 6 - Poor Performance of Outsourced Administrator • PEN 8 - ESG - Risk of financial loss through the negative impact of ESG matters Risks which remain open, and which are actively being managed Include: • PEN 7 - Cyber Security • PEN 9 - Liquidity on asset management - risk of failure to liquidate assets or meet drawdown calls • Pen 10 - Liquidity on members dealings - risk that the fund is unable to settle member payments • PEN 11 - Failure of the pool in management of funds / access to funds • PEN 12 - Failure of the Fund’s governance to comply with statutory requirements • PEN 13 - Key officer risk • PEN 14 - Failure of employers to deliver accurate and timely employee administration information All seven open risks remain static from the previous quarter. The significance of risks is measured by interaction of the likelihood of occurrence (likelihood) and by the potential damage that might be caused by an occurrence (impact). The risks are also RAG (Red, Amber, Green) rated to identify level. Scoring is included in the attached Risk Matrix. Although risks have remained static , the “Fit for Future” legislation, which was due to come into force on the 1 st April 2026, has still not been approved by Parliament. We are following the “spirit” of the changes and transferring so that 100% of our assets are with the LCIV. If the legislation has not been approved by the next Committee meeting, this will become a significant risk. FINANCIAL IMPLICATIONS The financial implications are contained in the risk register attached. LEGAL IMPLICATIONS The legal implications are contained in the risk register attached.

Risk Ref Risk Title and Description Causes Consequences Status Risk Owner Review Date Risk Category Last Review Date Last Reviewed By Review Comments Directorate Service Risk Type Created Date Current Rating Controlled Profile Controlled Rating Uncontrolled Profile Uncontrolled Rating PENS0024 PEN 7 - Cyber Security Inappropriate cyber protection, ongoing management and contingency planning leading to vulnerabilities. Los of data Ransom demands Non delivery of statutory service Static Tunde Adekoya 01/03/2026 IT & Technology 04/02/2026 Tunde Adekoya Risk Reviewed - No Changes Required PEN 7 - Cyber Security Finance Directorate Statutory Accounting, Investments & Pensions Operational 30/05/2024 8 E1 8 E1 8 PENS0009 PEN 9 - Liquidity on asset management - risk of failure to liquidate assets or meet drawdown calls Lack of notice given for drawdown Poor cashflow management Unable to meet trades Financial penalties Overdraft fees Static Tunde Adekoya 12/04/2026 Financial 12/01/2026 Tunde Adekoya Risk Reviewed - No Changes Required PEN 9 - Liquidity on asset management - risk of failure to liquidate assets or meet drawdown calls Finance Directorate Statutory Accounting, Investments & Pensions Operational 30/05/2024 8 F1 4 E1 8 PENS0010 Pen 10 - Liquidity on members dealings - risk that the fund is unable to settle member payments Cashflow negative (Payments greater than income) Poor cashflow management Non payment of pensions Negative impact on pensioners Reputational damage Fines Static Tunde Adekoya 01/03/2026 Financial 19/02/2026 Tunde Adekoya Risk Reviewed - No Changes Required Pen 10 - Liquidity on members dealings - risk that the fund is unable to settle member payments Finance Directorate Statutory Accounting, Investments & Pensions Operational 30/05/2024 4 E3 4 E3 4 PENS0011 PEN 11 - Failure of the pool in management of funds / access to funds Lack of interest in common fund launch Poor CIV governance Government intervention Lack of diversity in investment Inability to meet pooling requirement Unable to meet any changing in ISS requirements Static Tunde Adekoya 04/03/2026 Financial 04/02/2026 Tunde Adekoya Risk Reviewed - No Changes Required PEN 11 - Failure of the pool in management of funds / access to funds Finance Directorate Statutory Accounting, Investments & Pensions Operational 30/05/2024 12 E1 8 E1 8 PENS0017 PEN 12 - Failure of the Fund’s governance to comply with statutory requirements New General CoP needs gap analysis and rectification GMP moral vs regulatory requirement Knowledge gaps resulting in ineffectiveness of Committee and/or Board Actions taken against the Fund by TPR for non code compliance Not delivering best practice in accordance with the new code TPR/DLUHC action taken against the Fund for not GMP non compliance Poor decisions and/or Static Tunde Adekoya 04/05/2026 Statutory Service Provision 04/02/2026 Tunde Adekoya Risk Reviewed - No Changes Required PEN 12 - Failure of the Fund’s governance to comply with statutory requirements Finance Directorate Statutory Accounting, Investments & Pensions Operational 30/05/2024 6 E4 2 D3 6 PENS0016 PEN 13 - Key officer risk Small team with specialist knowledge in each role. Limited capacity for succession planning. Non delivery of service statutory requirements Agency staff costs to cover any vacant position. Static Tunde Adekoya 04/05/2026 Statutory Service Provision 04/02/2026 Tunde Adekoya Risk Reviewed - No Changes Required PEN 13 - Key officer risk Finance Directorate Statutory Accounting, Investments & Pensions Operational 30/05/2024 6 E4 2 B3 10 PENS0015 PEN 14 - Failure of employers to deliver accurate and timely employee administration information Poor outsource contract management by employers Poor performance of outsourced service providers Inadequate payroll reporting by Hillingdon Council Lack of ownership by employers Inaccurate pension records Reporting of employers to TPR - and subsequent ramifications (Fines) Incorrect pensions being paid Pensions payment not processed efficiently Additional pension administration costs Static Tunde Adekoya 04/05/2026 Statutory Service Provision 04/02/2026 Tunde Adekoya Risk Reviewed - No Changes Required PEN 14 - Failure of employers to deliver accurate and timely employee administration information Finance Directorate Statutory Accounting, Investments & Pensions Operational 30/05/2024 8 F4 1 A3 12

Risk Ref Risk Title and Description Causes Consequences Status Risk Owner Risk Category Directorate Service Risk Type Created Date Current Rating Controlled Profile Controlled Rating Uncontrolled Profile Uncontrolled Rating PENS0020 PEN 01 - Fund assets fail to deliver returns in line with the anticipated returns underpinning valuation Market and economic environment not conducive to asset performance. Incorrect asset allocation. Underperforming fund managers. Reduced asset value. Reduced funding level. Increase in employer contributions. Closed/Tolerated Tunde Adekoya Financial Finance Directorate Statutory Accounting, Investments & Pensions Operational 29/05/2024 12 D1 12 D1 12 PENS0021 PEN 02 - Inappropriate long-term investment strategy Incorrect asset allocation and fund manager selection. Increased employer contributions. Closed/Tolerated Tunde Adekoya Financial Finance Directorate Statutory Accounting, Investments & Pensions Operational 29/05/2024 12 E1 8 D1 12 PENS0019 PEN 03 - Active investment manager under-performance relative to benchmark Incorrect manager decisions Incorrect market environment for their Strategy Key staff loss Reduced investment returns vs passive strategy Lower returns / funding level Increased employer contributions Closed/Tolerated Tunde Adekoya Financial Finance Directorate Statutory Accounting, Investments & Pensions Operational 29/05/2024 12 D1 12 D1 12 PENS0023 PEN 04 - Inflation - Pay and price inflation significantly more than anticipated Global and national market/geo political environment causing higher inflation. Incorrect BoE actions to rectify Increased pension payments / cashflow negative Reduced asset values & increased negative actuarial assumptions reduce funding level Discount rate may be higher which could improve funding level Closed/Tolerated Tunde Adekoya Financial Finance Directorate Statutory Accounting, Investments & Pensions Operational 29/05/2024 12 E1 8 D1 12 PENS0018 PEN 05 - Pensioners living longer Improvements in longevity Pension costs exceeding forecast Reduced funding level Closed/Tolerated Tunde Adekoya Financial Finance Directorate Statutory Accounting, Investments & Pensions Operational 30/05/2024 6 E2 6 E2 6 PENS0025 PEN 06 - Poor Performance of Outsourced Administrator Poor service delivery of outsource partner Poor contract management Lack of action when improvements Non delivery of pension payments Non compliance with pension regulations Closed/Tolerated Tunde Adekoya Statutory Service Provision Finance Directorate Statutory Accounting, Investments & Operational 30/05/2024 6 F2 3 E2 6 PENS0022 PEN 8 - ESG - Risk of financial loss through the negative impact of ESG matters Negative ESG influences creating an environment where investments/companies perform poorly. Reduced asset value Reduced funding level Closed/Tolerated Tunde Adekoya Financial Finance Directorate Statutory Accounting, Investments & Pensions Operational 30/05/2024 0 0 0

Classification: Public Pensions Committee 24 March 2026 GOVERNANCE Part I Item 12 Committee Pensions Committee Officer Reporting Pete Carpenter, Finance Tunde Adekoya, Finance Papers with report Pension Committee Workplan Pension Committee Training Log Draft Pension Fund Annual Report (Including the Accounts) HEADLINES This report is to enable the Pension Committee to review the Committee workplan, note governance updates as well as approval of various triennial and interim policy updates. RECOMMENDATIONS That the Committee: 1. Note the dates for Pensions Committee meetings. 2. Note Committee Work Plan 3. Note Committee’s Continuous Professional Development update 4. Note GCoP Update 5. Note and Approve Draft Pension Fund Annual Report SUPPORTING INFORMATION The Pension Committee workplan has been updated and is now shown as an appendix to this report. The policies listed below have been rescheduled for review at the dates next to each policy to ensure that they are in line with triennial valuation and responsibly manage Pensions committee agenda items. Governance Policy & Compliance Statement– December 26 Training Policy – December 26 Scheme Pays Policy – December 26 Committee are asked to review the workplan and make suggestions for consideration and inclusion. Once the new pensions legislation and related Fit For The Future guidance has received Royal Assent and been published the Work plan and relevant policies will need to be re-visted. Agreed future meeting dates: Classification: Public Pensions Committee 24 March 2026 11 June 2026 29 September 2026 10 December 2026 31 March 2027 Training In line with the required competencies set out by the CIPFA Knowledge and Skills Framework, Pension Committee members should have a general understanding of areas associated with their LGPS fiduciary role. Upcoming changes in legislation are expected to enforce the need for training and will make it a regulatory requirement for Pension Committee members. To monitor progress against this requirement a log of member training is shown below. As a foundation requirement, Pension Committee members are asked to complete the AON CIPFA Knowledge & Skills Framework sessions. Pensions Committee Continuous Professional Development Log 2026/27 Attached to this paper is the updated training log for all Pensions Committee members detailing training undergone during 2026/27. General Code of Practice The general code of practice bec ame effective in September 2025, and we are currently on schedule to become compliant with the code. The main compliance policy documents outstanding, the Cyber Policy and EDI Policy have now been updated. The revised Cyber Policy will be presented in Part II for approval by the committee as well as the next steps of EDI policy , Gap analysis, which has been completed by officers and the Pensions Board. Draft Responsible Investment Policy The Draft 2026 Responsible Investment Policy positions the Fund within a fully pooled investment structure, strengthens climate and stewardship commitments, introduces explicit exclusions and impact investing targets, and aligns the Fund with modern ESG frameworks i ncluding the UN SDGs and Net Zero pathways. This updated policy enhances transparency, strengthens governance, and supports long‑term sustainable returns for members. The updated Responsible Investment (RI) Policy (March 2026) for the London Borough of Hillingdon Pension Fund was considered under Item 7 of this agenda. Draft Pension Fund Annual Report (including the accounts) Classification: Public Pensions Committee 24 March 2026 The aim of the Pension Fund Annual Report is to provide transparent, comprehensive and comparable information about how the London Borough of Hillingdon Pension Fund has been managed over the reporting year (2024/25). The key purposes of the Annual report are as follows: 1. To report on the management and financial performance of the Fund The annual report must detail how the pension fund has been managed, including its financial performance during the year. 2. To meet statutory requirements under the LGPS Regulations LGPS administering authorities are required by regulation 57 of the LGPS Regulations 2013 to prepare, maintain and publish an annual report showing the fund’s activities and performance. 3. To provide consistent and comparable information across all LGPS funds National guidance from the Scheme Advisory Board (SAB), CIPFA and DLUHC aims to ensure annual reports present consistent data, enabling comparability across funds. 4. To communicate key information to stakeholders This includes governance arrangements, funding and investment activity, administration performance, actuarial information, and audited financial statements supporting transparency for members, employers, committees, boards and regulators. The Pension Fund accounts , which forms part of this report have been successfully audited by Ernst & Young LLP and approved by Audit Committee on 26 February 2026. FINANCIAL IMPLICATIONS Continued training will incur fees dependant on the platform and events attended. LEGAL IMPLICATIONS Where applicable the legal implications are included within the body of the report.

London Borough of Hillingdon Pension Fund - Pensions Committee agenda plan Frequency Last review Mar-26 Jun-26 Sept 26 Dec 26 Mar 27 June 27 Policies Governance Policy & Compliance Statement inc Governance Compliance Statement Dec-23 Y Conflicts of Interests Policy Mar-23 Y Risk Management Policy Mar-25 Procedure for Reporting Breaches of the Law Oct-24 Funding Strategy Statement Mar-26 Y Investment Strategy Statement Mar-26 Y Responsible Investment Policy Mar-26 Y Training Policy Dec-23 Y Pensions Administration Strategy Dec-25 Y Scheme pays policy Dec-23 Y Internal Disputes Resolution Procedure (IDRP) Employees Guide Dec-25 Communications Policy Sep-24 Discretions Policy Jun-25 Pensions Administration Pensions Administration Performance Quarterly Y Y Y Y Y Y Breaches, Complaints and Appeals Annually Y Pension Board Annual Report Annually Y Y Funding Actuarial Valuation Every 3 years Mar-26 Y Investment Review of Investment Strategy Every 3 years Mar-26 Y Investment update and manager review Quarterly Y Y Y Y Y Y Responsible Investment Update Quarterly Y Y Y Y Y Y Climate Risk Dashbaord (TCFD) Every 3 years Dec-25 At least every 3 years

DATE DETAILS Cllr Reeta Chamdal Cllr Kaushik Banerjee Cllr Stuart Mathers Cllr Peter Smallwood OBE Cllr Labina Basit Marian George Craig Alexander Andrew Singh Jonny Moore 13/05/2025 London CIV Investment Review 0.75 13/05/2025 Pensions Chair SAB meeting 1.5 15/05/2025 Triennial Valuation Training - Hymans Robertson 2 2 2 2 2 2 10/06/2025 Hymans Robertson - "Fit for the future webinar 1 11/06/2025 LCIV Baillie Gifford - Manager Update 1 09/07/2025 LAPFF Business Meeting 2 16/07/2025 LCIV AGM 2 18/07/2025 Pension fund Investment Forum - By Isio 2 2 2 2 2 31/07/2025 London CIV Private Market Investment Review Webinar 2.5 05/08/2025 London CIV Fixed Income & Multi Asset Webinar 1 08/10/2025 LCIV Sustainability Working Group 2 21/10/2025 Hymans Robertson 1 1 22/10/2025 Scheme Advisory Board Conference 7 30/10/2025 Tri-Borough Investment Training 4 17/11/2025 Isio Investment Strategy Training 1.5 1.5 1.5 1.5 1.5 1.5 1.5 27/11/2025 Scheme Advisory Board Pooling Guidance 2 28/11/2025 Isio Investment Sub-Committee Training 2 2 2 2 2 2 Total Training Hours 2025/26 32.25 8.5 9.5 2 3.5 65.6 16 35.5 33.5 CIPFA Knowledge & Skills Framework 7 Modules (Completed) 14 Hours * * * ** ** *Required Minimum PB Annual Training Hours (14 Hours) 14 14 14 14 14 *Completed Knowledge and Skills training prior to 2024/25. Keys **Cllrs Smallwood and Basit joined Pension Committee on 11 July 2025 – training to be completed. Meets Prorata Annual Requirement On track to Prorata Annual Requirement Did Not Meet Requirement Pensions Committee Members Advisers & Actuary

London Borough of Hillingdon Pension Fund Annual Report 2024/25 DRAFT DRAFT C O N T E N T S Section Page Chairman’s Foreword 3 Introduction To The Fund 5 A: Overall Fund Management 7 B: Financial Performance 20 C: Investment Policy and Performance Report 23 D. Scheme Administration 37 E. Report Of The Fund Actuary 46 F: Governance 48 G: Fund Account, Net Asset Statement and Notes 63 101 109 135 164 174 185 186 192 H. Asset Pools I: Pensions Administration Strategy J: Funding Strategy Statement K : Investment Strategy Statement L: Communications Policy M: External Audit Opinion Glossary Appendix 1 – Governance Policy Appendix 2 - Conflict of Interest 213 DRAFT CHAIRMAN’S FOREWORD The Pens ion Fund Committee is responsible for overseeing the governance of the London Borough of Hillingdon Pension Fund, including investment management and pensions administration. Committee continues to monitor the Fund closely at every meeting and challenges the officers, investment advisers and investment managers as necessary to ensure the Fund’s investments are being managed effectively. The Fund continues to work closely with its LGPS pool, the London Collective Investment Vehicle (LCIV), to achieve efficiencies through pooling of Pension Fund assets and indeed has one of the highest percentages of funds under LCIV management at almost 95%. This ensures that the Fund continues to benefit from the lower fees negotiated by LCIV on its Legal and General Passive Equities Portfolio, as well as benefitting from lower fees in active equity, Diversified Growth, and alternative investment managers. 2024/25 has seen the implementation of the Blackstone Dislocations Fund with 1.68% of the 5% allocation now having been made. The Fund allocation levels now reflect the decision last year to increase allocations in equities by 5% with passive equity allocations at 45.08% against the original 41% target allocation. Fund performance in the past year has been 4.6% which puts the fund in the upper quartile of performance of Local Government Funds. This compares to performance in the lowest quartile for 5 and 10 years. 2025/26, with the impact of the 2026/27 Triennial re-valuation of the fund and the Government’s “Fit for the Future” legislative agenda, will see significant work needing to be undertaken and approved by the fund. This includes the requirement for funds to transfer all assets to LCIV management by the 31st of March 2026, reassessment of asset allocation and investment strategy models considering the triennial revaluation results, and refining governance models to reflect the needs of the “fit for future” legislation. The Pension Fund is committed to being a responsible investor and in the last year signed up to the UK Stewardship Code to demonstrate our commitment to active and engaged monitoring of corporate governance in the interests of our members. We as a fund to this end actively engage our fund managers to incorporate ESG into investment processes and ensure active engagement with invested companies in key areas of Environmental, Social and Governance. The Pension Fund launched its inaugural Responsible Investment Policy in 2020, setting out the Fund’s commitment to environmental, social and governance factors as a core part of its investment decision making. This Responsible Investment policy is aligned with the Fund’s Investment Strategy Statement where a brief overview on ESG and voting is included. In addition, the policy is aligned with the Fund’s Funding Strategy Statement with consistency of objectives and return expectations to support the funding level. 3 DRAFT The Fund h as also reorganised its equity portfolio to reduce its carbon exposure which is a considerable long term investment risk. This has been achieved by transferring its previous active UK equity portfolio from LCIV Epoch Income Fund to the LCIV Global Alpha Paris Aligned Fund managed by Baillie Gifford, which is in alignment with the Paris Climate Agreement by screening out carbon intensive companies that do not, or will not, play a role in the transition to a low-carbon future. We have also undertaken a review of ESG impact assessment of our portfolios by rating all engaged fund managers on set traditional criteria to determine if they meet expected minimum level rating on an overall basis. All of the Fund’s current investment mandates achieve a ‘partially meets criteria’ rating at a minimum on an overall basis, with a significant number that ‘meets traditional criteria’. At an overall level the Fund also meets “meets traditional criteria”. I would like to thank all those involved in the governance of the London Borough of Hillingdon Pension Fund during the year during 2024/25, especially the members of the Pension Fund Committee and the Local Pension Board. Cllr Reeta Chamdal Chairman Pensions Committee 2024/25 4 DRAFT INTRODUCTION TO THE FUND Regulation 5 7 of the Local Government Pension Scheme Regulations 2013 (in respect of England and Wales) requires Local pension Funds to prepare and publish an annual report for each financial year. The London Borough of Hillingdon Pension Fund is part of the Local Government Pension Scheme (LGPS) and is governed by statute. The scheme moved to a career average revalued earning (CARE) scheme, from a final salary scheme in 2014 because of the Local Government Pension Scheme Regulations 2013. In 2016/17, the regulations surrounding investments were amended with the Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016. Hillingdon is the Administering Authority for the Fund. Pensions and entitlement to benefits are fully protected in law. Membership of the Scheme is open to all employees of the Council including school employees except for teachers (who have their own pension scheme). Other employers are admitted to the Pension Fund and depending on their status; their employees may also be able to participate in the LGPS. Employee contributions are determined by central government and are between 5.5% and 12.5% of pensionable pay. Employer rates are set by the Fund actuary every 3 years following a valuation of the assets and liabilities of the Fund. Contributions for 2024/25 were set in the Actuarial valuation on 31 March 2022. The conditions of the Local Government Pension Scheme (LGPS) Regulations set out in clear terms the benefits that are payable to Scheme members. The benefits are guaranteed for those members and therefore members are not reliant on investment performance for their pension benefits. Contributions payable by Scheme members are also defined in the regulations. Employing Authorities are required to pay contributions into the Scheme to meet the cost of funding employee benefits and are required to meet any shortfall in funding the pension liabilities of Scheme members. The Pension Scheme during the financial year 2024/25 was a defined benefit career average revalued earnings scheme, which aligns LGPS retirement age with an individual’s state pension age. The key benefits of the scheme are outlined below: • Pension benefits based on a 1/49th accrual basis for each year of pensionable service with benefits calculated on the career average pay revalued annually in line with inflation. • Pre-2014 benefits guaranteed with a final salary link for any benefits earned prior to 1 April 2014. • Option to pay 50% of the contribution rate to accrue 50% of the benefits. • Option to convert some pension to lump sum on retirement on a 1:12 ratio. • Life assurance covers 3 x member final pay applicable from the day of joining scheme. • Pensions for dependents: - spouses, civil partners and eligible co-habiting partners and eligible children. • An entitlement to have pension paid early on medical grounds. • Pensions increase annually in line with the cost of living (CPI). 5 DRAFT It shou ld be noted that the foregoing is not an exhaustive list and that certain conditions must be met for an individual to be entitled to the benefits outlined. The foregoing benefit structure came into effect on 1 April 2014 and saw the start of significant changes to the public sector pension schemes, with most other schemes introducing their changes a year later, on 1 April 2015. The previous LGPS introduced in 2008 was a defined benefit final salary scheme and was in operation until 31 March 2014. It should be recognised that many scheme members will have benefits accrued under both schemes and indeed some under the pre-2008 scheme. The key benefits under the 2008 scheme are outlined below: • A guaranteed pension based on final pay and length of time in the scheme and an accrual rate of 1/60th per annum. • Tax-free lump sum on benefit accumulated prior to 1 April 2008 and option to convert some of the pension into tax-free lump sum on post 1 April 2008 service. • Life assurance cover 3x member final pay applicable from the day of joining Scheme. • Pensions for dependents: - spouses, civil partners and eligible co-habiting partners and eligible children. • An entitlement to have pension paid early on medical grounds. • Pensions increase annually in line with the cost of living (CPI). Contracting Out Status (with effect from 1 April 2002 until 5 April 2016) The LGPS was contracted-out of the State Second Pension Scheme (S2P), up to 5 April 2016 when contracting-out ceased. This meant that members paid reduced National Insurance contributions, and they did not earn a pension under S2P. Instead, the LGPS must guarantee to pay a pension that in general is as high as the pension that would have been earned in the State Earnings Related Pension Scheme (SERPS) / S2P. For contracted-out membership between 6 April 1978 and 5 April 1997, HMRC calculates a Guaranteed Minimum Pension (GMP), which is the minimum pension, which must be paid from the London Borough of Hillingdon Pension Fund to the member. For membership after 5 April 1997, the LGPS has guaranteed that the benefits it provides will generally be no less favourable than those provided under a Reference Scheme prescribed under the Pensions Act 1995. Additional Voluntary Contributions A facility is available for scheme members to make Additional Voluntary Contributions (AVCs). The Pension Fund Committee has appointed Prudential as the nominated provider for this purpose. This is run separately to the Hillingdon Pension Fund. Further details are available from the Prudential Corporate Pensions Team on 0800 151 3941. Regulations The Local Government Pension Scheme Regulations 2013 (as amended) The Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014 (as amended) The Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016 6 DRAFT A: OVERALL FUND MANAGEMENT SCHEME MANAGEMENT AND ADVISERS The London Bo rough of Hillingdon Pension Fund ('the Fund') is part of the Local Government Pension Scheme (LGPS). The benefits paid out and the regulations are set nationally, but the Fund is administered locally. As the Administering Authority, the London Borough of Hillingdon has legal responsibility for the effective management of the Fund. The Council delegates this responsibility to the Pensions Committee ('the Committee'), which is the formal decision-making body for the Fund. The Corporate Director of Finance has delegated authority for the day-to-day running of the Fund. The local Pension Board ('the Board') was established in 2015 to assist the scheme manager in securing compliance with regulations relating to the governance and administration within the requirements set by the Pension Regulator. Corporate Director of Finance Andy Evans in his role of Corporate Director of Finance has delegated responsibility for the day-to-day running of the Pension Fund. Officers Responsible for the Fund The Pensions and Statutory Accounts team ensures that both the Committee and Board receive relevant advice on investment strategy, monitoring of the performance of the Fund and on administration and governance matters, in addition to undertaking the accounting duties of the Fund. James Lake Director of Finance - Pensions, Treasury & Statutory Accounts Tunde Adekoya Finance Manager, Pensions & Governance Seby Carvalho Pensions Technical Officer Ian Pyke Pensions Officer Karl Pereira Trainee Pension Fund Accountant Scheme Administration Administration of the scheme is contracted out to Hampshire Pension Service (HPS) to provide the pensions administration under delegated authority for the London Borough of Hillingdon. HPS maintains pension scheme membership records and calculates benefits. Email: pensions@hants.gov.uk Telephone: 01962 845588 Address: Hampshire Pension Services The Castle Winchester Hampshire SO23 8UB 7 DRAFT Fund Custodian and Performance Monitoring The Northern Trust Company acts as the global custodian of the Fund's assets. As part of its normal procedures Northern Trust holds all assets in sa fe custody, settles trades, collects dividend income, provides data for corporate actions, liaises closely with all the investment managers and reports on all activity on a monthly and quarterly basis. Where holdings are in pooled funds, the underlying assets held by the relevant funds' custodian are reported to Northern Trust. Regular service reviews take place with Northern Trust to ensure continuous monitoring of the Fund’s requirements. Additionally, Northern Trust provide performance analytics, comparing the performance of the Fund and individual managers to agreed benchmarks and market indices on a monthly, quarterly, and annual basis. Northern Trust 50 Bank Street Canary Wharf London E14 5NT Fund Actuary The Fund's actuary is Hymans Robertson Craig Alexander FFA Hymans Robertson LLP 20 Waterloo Street Glasgow G2 6DB Fund Managers Day-to-day investment management of the Fund's assets is delegated to specialist managers in accordance with the LGPS (Management and Investment of Funds) Regulations 2016. During 2024/25, the following managers managed the Fund’s investments externally: Fund Manager Asset Class Adam Street Partners Private Equity AEW UK UK Core Plus and Urban Real Estate Property Blackstone Investments Dislocation Fund Legal & General Investment Management List ed Equities and Index Linked Bonds - (Passive) – Pooled & Property Pooled London CIV – Baillie Gifford Global Equity Income - Pooled London CIV - Ruffer Absolute Return Fund - Pooled London CIV - Stepstone Infrastructure - Pooled London CIV – Churchill Private Debt - Pooled London CIV – CQS & PIMCO Multi Asset Credit LGT Capital Partners Private Equity M&G Investments (Direct Investment) Private Debt Macquarie Investment Infrastructure Permira LLP Private Debt UBS Global Asset Management UK Property Fund of Funds 8 DRAFT Fund Pool and Pool Operator Th e London Borough of Hillingdon is a member of the London CIV Pool. The London CIV Pool is run and managed by the London LGPS CIV Ltd, an FCA authorised and regulated company. Advisors to the Fund The Fund's Investment Advisor is Iseran Bidco Ltd trading as Isio, (f ormally KPMG) who was appointed July 2014. They advise the Committee on the Fund's strategic asset allocation and assist in the monitoring of fund managers. David O'Hara Partner Investment Advisory Tax & Pensions Iseran Bidco Ltd (Isio) 10 Norwich Street London EC4A 1BD In addition, the Fund had an Independent Advisor for 2024/25 – Marian George. AON Hewitt advises and supports the Fund on governance arrangements to the Board. Aon Hewitt 25 Marsh Street Bristol BS1 4AQ Legal Services Legal support to the Fund is provided in-house by the Council. The Council's Borough Solicitor is Glen Egan. Auditor The Fund's external auditor, appointed by the Public Sector Audit Appointments (PSAA), is Ernst & Young. Ernst & Young LLP 400 Capability Green Luton Bedfordshire LU1 3LU Banker Banking services are provided to the Fund by the Council's banker National Westminster Bank (NatWest). NatWest Bank Plc Unit 227-228 Intu Shopping Centre The Chimes High Street Uxbridge UB8 1LA 9 DRAFT AVC Provider The Fu nd's provider for additional voluntary contributions is Prudential. Prudential AVC Customer Services Prudential Craigforth FK9 9UE 10 DRAFT RISK MANAGEMENT POLICY Risk Management within the Governance Structure The Administering Authority recognises that effective risk management is an essential element of good governance in the LGPS and is part of the ongoing decision-making process of Committee. By identifying and managing risks, the Administering Authority can:  demonstrate best practice in governance  improve financial management  minimise the risk and effect of adverse conditions  identify and maximise opportunities that might arise  minimise threats The Administering Authority adopts best practice risk management, which supports a structured and focused approach to managing risks and ensures risk management is an integral part in the governance of the Fund at a strategic and operational level. To whom this Policy Applies This Risk Management Policy applies to all members of the Pension Committee and the local Pension Board, including both scheme members and employer representatives. It also applies to senior officers involved in the management of the Fund. Less-senior officers involved in the daily management of the Fund are also integral to managing risk for the Fund and will be required to have appropriate understanding of risk management relating to their roles, which will be determined and managed by the Head of Finance – Statutory Accounting and Pension Fund. Advisers and suppliers to the Fund are also expected to be aware of this Policy and assist officers, Committee members and Board members as required, in meeting the objectives of this Policy. Aims and Objectives In relation to understanding and monitoring risk, the Administering Authority aims to:  integrate risk management into the culture and day-to-day activities of the Fund  raise awareness of the need for risk management by all those connected with the management of the Fund (including advisers, employers, and other partners)  anticipate and respond positively to change  minimise the probability of negative outcomes for the Fund and its stakeholders  establish and maintain a robust framework and procedures for identification, analysis, assessment and management of risk, and the reporting and recording of events, based on best practice  ensure consistent application of the risk management methodology across all Fund activities, including projects and partnerships. To assist in achieving these objectives in the management of the Fund, the Administering Authority will aim to comply with: 11 DRAFT  the CIPFA publication, “Managing Risk in the Local Government Pension Scheme”  the Pensions Act 2004 and the Pensions Regulator's Code of Practice for Public Service Pension Schemes as they relate to managing risk. Responsibility The Administering Authority must be satisfied that risks are appropriately managed. For this purpose, the Head of Statutory Accounts & Pensions is the designated individual for ensuring the process outlined below is carried out, subject to the oversight of the Pension Committee. However, it is the responsibility of everyone covered by this Policy to identify any potential risks for the Fund and ensure that they ar e fed into the risk management process. The London Borough of Hillingdon Pension Fund Risk Management Process The Administering Authority's risk manag ement process is in line with that recommended by CIPFA and is a continuous approach wh ich systematically looks at risks surrounding the Fund’s past, present and future activities. The main processes involved in risk management are identified in the figures below and detailed in the following sections: 1. Risk Identification The risk identification process is both a proactive and reactive one: looking forward i.e., horizon scanning for potential risks, and looking back, by learning lessons from reviewing how previous decisions and existing processes have manifested in risks to the organization. Risks are identified by several means including, but not limited to:  formal risk assessment exercises managed by the Pension Committee  performance measurement against agreed objectives 12 DRAFT  findings of internal and external audit and other adviser reports  feedback from the local Pension Board, employers, and other stakeholders  informal meetings of senior officers or other staff involved in the management of the Fund.  liaison with other organizations, regional and national associations, professional groups, etc. Once identified, risks will be documented on the Fund's risk register, which is the primary control document for the subsequent analysis, control and monitoring of those risks. 2. Risk Analysis & Evaluation Once potential risks have been identified, the next stage of the process is to analyse and profile each risk. Risks will be assessed by considering the likelihood of the risk occurring and the impact if it does occur, with the sco re for likelihood multiplied b y the score for impact to determine the current overall risk rating, as illustrated in the table below. Attributes: Risk rating Risk rating Risk rating Risk rating Greater than 90% This week Very High (A) A4 6 A3 12 A2 18 A1 24 70% to 90% Next week / this month High (B) B4 5 B3 10 B2 15 B1 20 50% to 70% This year Significant (C) C4 2 C3 4 C2 6 C1 8 30% to 50% Next year Medium (D) D4 1 D3 2 D2 3 D1 4 10% to 30% Next year to five years Low (E) E4 0 E3 0 E2 0 E1 0 Less than 10% Next ten years Very Low (F) F4 0 F3 0 F2 0 F1 0 Small (4) Medium (3) Large (2) Attributes: Financial Reputation Minor complaint, no media interest One off local media interest Adverse national media interest or sustained local interest Ministerial intervention, public inquiry, remembered for years IMPACT THREATS: up to £500k Between £500k and £10m Between £10m and £50m Over £50m Score Score Score Score L I K E L I H O O D Very Large (1) 13 DRAFT When considering the risk rating, the Administering Authority will have regard to the existing controls in place and these will be summarised on the risk register. Key risks to the effective delivery of this Policy • Administration Risk • Investment Risk • Liquidity Risk • Pooling Risk • Cyber Risk • Key officers Risk • Governance Risk Within each category a series of risks are identified and upon each review an update of the status and any changes in relevant controls are made, the Corporate Director of Finance h as responsibility to keep the risk register under review. The register is reviewed quarterly by Pensions Committee. Mitigating Risk Detailed controls to mitigate risk are specified in the Funds risk register. However, the following table contains examples of the controls in place to mitigate key risks across investment, governance, and administration: Area Risk Actions In Place Risk Category/Rating Administration Poor Performance of Outsourced Administrator leading to poor quality information supplied to both members and the Fund Actuary 1. Regular service meetings in place. 2. Monthly KPI reports are provided to track and monitor performance. 3. Cr itic al errors cleared prior to transfer of valuation data to actuary. 4. Da ta Imp rovement plan developed, implemented and continuously reviewed. Yellow 14 DRAFT Failure of employers to deliver accurate and timely employee administration information 1. Training provided to educate and empower employers. 2. Re gular u pdates provided to employers on the importance of accurate and timely information. 3. Regular newsletters and update from Hampshire to all employers. 4. Bench ma rking and escalation to Employer contacts. 5. Re gular m eetings with payroll providers on behalf of Scheduled and Admitted bodies to escalate and manage backlog work. Red Investment Risk Inappropriate long-term investment strategy 1. Set Pension Fund specific strategic asset allocation benchmark after taking advice from investment advisers, balancing risk and reward, based on historical data. 2. Keep ri sk and expected reward from strategic asset allocation under review. 3. Review asset allocation formally on an annual basis. 4. Asset a ll ocation reported quarterly to committee. 5. Officer and advisers actively monitor this risk. Yellow Active investment manager under-performance relative to benchmark 1. The structure includes active and passive mandates, and several managers are employed to diversify the risk of underperformance by any single manager. 2. Short term investment monitoring provides alerts on significant changes to key personnel or changes of process at the manager. 3. Regular monitoring measures performance in absolute terms and relative to the manager’s index benchmark, supplemented with an analysis of absolute returns against those underpinning the valuation. 4. Investment managers would be changed following persistent or severe under-performance. Green Liquidity Risk Liquidity on members dealings - risk that the fund is unable to settle member payments 1. The fund has an active daily cash management process in place to ensure there is sufficient cash available to meet all beneficiary payments. 2. Th e fun d is significantly diversified in different asset classes with the option of distribution portfolios. Green Liquidity on asset management - risk of failure to liquidate assets or meet drawdown calls 1. The fund has an active daily cash management process in place to ensure there is sufficient cash available to meet any drawdown requirements. 2. Ca sh management includes investing large amounts of surplus cash to balance the investment portfolio or hold in liquid asset classes in anticipation of cash calls. 3. Officers liaise with managers where commitments have been made to keep track of predicted drawdown timescales. 4. The fund is significantly diversified in different asset classes and asset managers to ensure if there is a stop on anyone holding then the portfolio will continue to operate as normal. Yellow 15 DRAFT Pooling Risk Failure of the pool in management of funds / access to funds 1. Quarterly review meetings held with the LCIV pool. 2. Regular reporting out of the pool informing the fund of manager performance. 3. Swift communications received from the pool with staff turnover and concerns the fund may need to be aware. 4. Independent adviser carried out a review of governance for manager selection and manager monitoring to add assurance and discussion points with the pool. 5. Active Shareholder representation at General meeting and AGM. 6. Pool to attend Committee meetings where required, to provide assurance over progress and activity. Green Cyber Risk Cyber Security - Pension schemes hold large amounts of personal data and assets which can make them a target for fraudsters and criminals 1. Council wide policies and processes in place around: acceptable use of devices, email and internet use of passwords and other authentication home and mobile working data access, protection (including encryption), use and transmission of data. 2. Risk is on the Corporate risk register with risk mitigation in place. 3. All member and transactional data flowing from HCC and Hillingdon is sent via encryption software or via the employer portal. 4. Data between the fund, HCC and Hymans is distributed via upload to an encrypted portal. 5. System s at Hil lingdon and HCC are protected against viruses and other system threats. 6. HCC ar e accredited to ISO27001:2013 and sign ed up to the Pensions Regulator Pensions Pledge. HCC currently undergoing penetration testing to ensure they are PSN compliant. Yellow Key officers Risk Key officer risk - small team with specialists’ knowledge in key roles results in the Fund being vulnerable if staff leave 1. The team endeavours to maintain a broad knowledge across the pension function. 2. Th e Fund h as access to specialist support should it be required. 3. Th e Fund h as access to the interim employment market should it be required. Green 16 DRAFT Governance Risk Failure of the Fund’s governance to comply with statutory requirements and/or The Pension Regulator expectations including: Failure to ensure that Committee members’ knowledge and understanding of pension matters is robust and meets statutory requirements Failure to ensure that the Pension Board is effective in carrying out its role 1. Governance Policy Statement reviewed every 3 years. 2. Polici es on range of issues, reviewed regularly. 3. Co mpliance w ith CIPFA Code of Practice on Public Sector Pensions Finance, Knowledge and Skills. 4. Programme of training sessions and access to external events. 5. Us e of R egulator’s on-line toolkit. 6. A kno wled ge self-assessment framework for Committee and Board members to identify training requirements. 7. Th e Fund’s An nual Report includes details of Committee and Board members’ training activities. 8. Fund Governance Adviser in place. 9. Access is provided to CIPFA K&S Framework training modules. Yellow 17 DRAFT Costs All costs rela ted to this Risk Policy are met directly by the Fund. Approval, Review and Consultation This Risk Policy was approved at the London Borough of Hillingdon Pension Committee meeting on 15 June 2016 and last amended on 26 March 2025. It will be formally reviewed and updated at least every three years or sooner if the risk management arrangements or other matters included within it merit reconsideration. Third Party risk such as late payment of contributions Contribution payments are monitored closely for accuracy and timeliness. A reporting process is in place to escalate any late/inaccurate payments to ensure all payments are received on 19th of the subsequent month of payment due date as prescribed by the regulations. In respect of Investment Managers, internal control reports (SOC1 and ISAE3402) are received and reviewed regularly for any non-compliance issues. If management response to non-compliant issues is unsatisfactory, the matter is then addressed directly with the fund manager for further assurance. Controls assurance reports Fund manager Type of report Assurance obtained Reporting accountant Adams Street Partners SOC 1 Reasonable Assurance KPMG LLP AEW UK Ltd ISAE 3402 Reasonable Assurance BDO LLP Blackstone Investments SOC 1 Reasonable Assurance Deloitte & Touche LLP Legal & General Investments Management AAF 01/20/ ISAE 3402 Reasonable Assurance KPMG LLP LCIV Third Party Controls Oversight Reasonable Assurance N/A M&G SOC 1 (IFDS Transfer Agency) Reasonable Assurance PWC Macquarie Infrastructure Real Assets Internal Controls Report Reasonable Assurance RMG Internal Audit (Macquarie Risk Management Group) 18 DRAFT Northern Trust Company SOC 1 Reasonable Assurance KPMG LLP Permira LLP SOC 1- Provided by Alter Domus, the fund’s custodians Reasonable Assurance Ernst & Young LLP UBS Asset Mana gement SOC 1 Reasonable Assurance Ernst & Young LLP The risk management policy was introduced during 2016 as part of the work undertaken by the local Pension Board. The Committee regularly review Fund risks through the risk register. The policy is available at: https://www.hillingdon.gov.uk/pension-fund-documents#Policy%20documents 19 DRAFT B: FINANCIA L PERFORMANCE The London Borough of Hillingdon Pension Fund is open to employees of the Council, non-teaching staff of local authority schools and certain other bodies eligible to join the Fund. Membership of the LGPS is not compulsory, although employees are automatically admitted to the Fund unless they elect otherwise. General Scheme membership Membership of the scheme is split between • Active members - those still contributing to the scheme. • Deferred members - those who are no longer active but have accrued benefits to be held until retirement or transfer to a new employer's scheme; and • Pensioner members - comprise former active members now drawing their benefits and dependents of former active members. The membership of the scheme analysed over the relevant membership profile is shown below: Membership Summary Membership Type 2024/25 2023/24 2022/23 2021/22 Active Members 8,999 9,182 10,271 8,691 Pensioners/Dependents 8,657 8,389 7,857 7,673 Deferred Members 14,524 14,371 12,252 12,907 Total Membership 32,180 31,942 30,380 29,271 Contributions ▸ Decreased by £42.9m (-39.11%) ▸ Attributable to a significant drop in interfund transfers. No bulk transfers in 2024/25 compared to £45.2m in 2023/24 Total Employee and Employer contributions (including transfers) into the Fund during 2024/25 amounted to £66.9m compared to £109.8m for the previous year. The 39.11% decrease from previous year is mainly attributable to the absence of Bulk Transfers IN in the year under review. Employee contributions ranged from 5.5% to 12.5% dependent on pensionable pay. The Fund actuary sets employer contribution rates and the rates that applied during 2024/25 were set from the 2022 valuation. Payments ▸ Increased by £6.8m (9.02%) The increase in total payments was driven mainly by various factors, including Pensions increase of 1.7% and increase in number of pensioners (268), increased Transfers Out £2.2m, including £1.7m bulk transfer out by an academy body. 20 DRAFT Analytical Review of Performance Category 2024/25 2023/24 2022/23 2021/22 2020/21 Contributions 66,855 109,790 57,928 54,966 53,484 Pensions -76,309 -69,462 -56,961 -57,077 -50,752 Net Dealings with Members -9,454 40,328 967 -2,111 2,732 Management Expenses -13,100 -13,441 -13,844 -10,832 -10,749 Net Investment Returns 17,573 19,609 15,752 11,858 13,667 Change in Market Value 52,595 129,976 -83,450 102,033 170,519 Taxes on Income -31 -29 -28 -35 -22 Net Increase/(Decrease) in Fund 47,5 83 176,442 -80,603 100,913 176,147 The Key varian ces in members dealings were due to the following: • Pensions Paid in 2024/25 increased by 9.02% due various factors explained under Membership. • The change in market value of investments was quite modest in 2024/25 (£48m) compared to 2023/24 (£176m) due to investments market reverting to mean after an exceptional year in 2023/24. This resulted in a swing of about -£129m in change in market value from 2023/24 to 2024/25. Analysis of Operational Expenses Category 2024/25 2023/24 2022/23 2021/22 2020/21 £' 000 £' 000 £' 000 £' 000 £' 000 Administration Employees -365 -325 -274 -384 -397 Outsourced Administration Costs -705 -683 -779 -954 -545 Support Services Charges -142 -158 -51 -47 -21 -1,212 -1,166 -1,104 -1,385 -963 Governance and Oversight Investment Advisory Services -61 -169 -53 -84 -113 Governance & Compliance -91 -156 -5 -29 -42 External Audit -93 -93 -50 -26 -26 Actuarial Fees -51 -61 -184 -86 -57 -296 -479 -292 -225 -238 Investment Management Management Fees -6,817 -7,374 -7,158 -5,984 -4,463 Performance Fees -1,668 -2,385 -2,267 -1,132 -2,143 Transaction Costs -3,051 -1,991 -2,937 -2,046 -2,881 Custodian fees -56 -46 -86 -60 -61 -11,592 -11,796 -12,448 -9,222 -9,548 Total Operational Expenses -13,100 -13,464 -13,844 -10,832 -10,749 21 DRAFT Investment Fees by Category Management Fees Performance Fees Transaction Costs M&G 22,609.41 11.84 LCIV 3,073,115.79 339,305.93 810,249.19 UBS Prop 930,454.09 546,651.50 LGIM 232,952.56 746,772.11 AEW 2,145,980.88 41,914.81 942,930.03 Adams Street 53,719.93 -41,090.84 24.02 LGT 28,131.39 7,428.07 1,169.08 Permira 124,663.58 824,633.44 Macquarie 205,560.83 496,274.32 2,028.00 Custodian 56,375.07 6,873,563 .53 1,668,465.73 3,049,835.77 11,591 ,865.02 The Key po ints to note from the operational expenses are as follows: • Overall Investment management expenses decreased by £341k, year on year. This was driven by management expenses and performance fees (-14%), and reduction in governance & Oversight costs (-38%) decreasing thus negating the increase in transaction costs (35%). 22 DRAFT C: INVESTMENT POLICY AND PERFORMANCE Investment Policy The Pension Fund Committee sets out a broad statement of the principles it has employed in establishing its investment and funding strategy in the Investment Strategy Statement (ISS). The ISS is prepared by the Pensions Committee after taking advice from the Fund's investment advisor Isio and Marian George the independent governance advisor to the Fund, in accordance with the Regulations. The Investment Strategy Statement required by Regulation 7 must include: a) A requirement to invest money in a wide variety of investments. b) The authority’s assessment of the suitability of investments and types of investments. c) The authority’s approach to risk, incl uding the ways in which risks are to be measured and managed. d) The authority’s approach to pooling investments, including the use of collective investment vehicles and shared services. e) The authority’s policy on how social, environmental or corporate governance considerations are considered in the selection, non-selection, retention and realisation of investments; and f) The authority’s policy on the exercise of rights (including voting rights) attaching to investments. The Investment Strategy Statement must also set out the maximum percentage of the total value of all investments of fund money, that it will invest in particular investments or classes of investment. Fund Value and Asset allocation The strategic asset allocation is agreed by the Pension Fund Committee based on the risk appetite and return on investments required to fulfil its paramount obligation of paying Pensions to members. The strategy benefits from input by both officers and the Fund’s investment advisors. Whilst managers can use their discretion to make minor variations in the allocation of investments between markets, the major movements are a combination of market gains, revised asset allocation and maturation of Private Equity and alternative investments during the year. Cash movement is incidental as the Fund has a zero cash policy but cash income from alternative investments during the year are received in the custody account pending reinvestment. 23 DRAFT The asset allocation as of 01 April 2024 to 31 March 2025 is as follows: Asset Category Opening Value 01 April 2024 Strategic Weighting Actual Weighting Closing Value 31 March 2025 Strategic Weighting Actual Weighting £'000 % % £'000 % % Equities 725,928 51 53 763,790 51 54 Diversified Growth Fund 44,559 0 3 39,351 0 3 Bonds 229,797 19 17 231,038 19 16 Property 143,822 7 11 145,593 7 10 Alternatives: Private Equity 5,521 0 1 2,993 0 0 Infrastructure 66,313 8 5 69,221 8 5 Private Credit 70,979 5 5 71,009 5 5 Opportunistic Dislocation 19,241 5 1 20,705 5 2 Long Lease Property 46,638 5 3 48,839 5 4 Cash 8,584 0 1 13,873 0 1 Total 1,361,382 100 100 1,406,412 100 100 24 DRAFT Asset Allo cation Variances Equities were the dominant driver of grow th: +£37.9m (+5.22%), accounting for ~84% of the total portfolio increase. The actual weight rose from 53% to 54%, widening the overweight to strategy (51%) from +2pp to +3pp. Cash rose by £5.3m (+61.6%) while the weight remained at 1% (vs 0% strategy, +1pp). Infrastructure (+£2.9m; +4.39%) and Long Lease Property (+£2.2m; +4.72%) delivered steady gains, nudging their actual weights up (LLP +1pp) or maintaining (Infra flat). Both remain underweight vs strategy (Infra -3pp, LLP -1pp). Diversified Growth Fund (DGF) fell by £5.2m (-11.69%) with weight unchanged at 3%— still +3pp overweight versus a 0% strategy. Private Equity declined by £2.5m (-45.8%), and weight moved from 1% to 0%, shifting from +1pp overweight to aligned with the 0% strategy. Bonds were slightly positive (+£1.24m; +0.54%), but the actual weight fell from 17% to 16%, deepening the underweight vs 19% strategy from -2pp to -3pp. The table above shows 3% variance between Property allocation actual weightings compared to its strategic allocation. This attributable to asset allocation decisions taken to reduce Property allocation by 5% and fund an increase in Equities allocation from 46% to 51%. Strategic allocation to bonds was also reduced from 24% to 19% with the 5% reduction allocated to Opportunistic Dislocation Fund. 25 DRAFT Fund Value The Fu nd value Increased by £45m consolidating the gains from 2023/24 (£178m) as the market normalised and reverted to mean during the year under review. The market gains are mainly attributable to the performance of the passive equities’ portfolio managed by LGIM. Funding Strategy Statement The Funding Strategy Statement sets out the aims and purpose of the pension fund and the responsibilities of the administering authority as regards funding the scheme. Its purpose is: • To establish a clear and transparent fund-specific strategy to identify how employers’ pension liabilities are best met going forward. • To support the regulatory requirement to maintain as nearly constant employer contribution rates as possible. • To take a prudent longer-term view of funding those liabilities 802 810 957 1,012 1,067 989 1,162 1,264 1,183 1,361 1,406 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 £'000 Fund Value 26 DRAFT The latest Funding Strategy Statement can be accessed via the Pension Fund Web page. https://www.hillingdon.gov.uk/pension-fund-documents#Strategy%20statements Investment Per formance Overall absolute performance of the Fund for the year 2024/25 was 1.56% behind of the overall benchmark. Other performance measurement intervals of three, five years and since inception, the annualised returns were behind the respective benchmarks as shown in the chart below. The since inception relative performance was 0.21% behind the benchmark. Performance of the Fund is measured against an overall strategic benchmark. Below this, each Fund Manager is given individual performance targets, which are linked to index returns for the assets they manage. Details of these targets can be found in the ISS. Performance of fund managers is reviewed quarterly by the Pension Fund Committee, which is supported by officers and the Fund’s investment and independent advisers. 4.57 3.05 6.95 6.486.13 3.94 7.95 6.69 0 1 2 3 4 5 6 7 8 9 1 Year 3 Years 5 Years Inception to Date Fund Annualised Performance LB Hillingdon Benchmark 27 DRAFT Investment Managers’ Performance The overall performance of each manager is measured over rolling three-year periods, as inevitably there will be short-term fluctuations in performance. -40 -30 -20 -10 0 10 20 Percentage (%) Fund Manager Performance 2024/25 One Year Benchmark Fund Manager Performance 2024/25 One Year Benchmark %% Adams Street -15.11 8.98 AEW UK 5.87 6.43 Baillie Gifford - LCIV -1.02 7.47 Blackstone Investments 2.91 15.33 LCIV Infrastructure Fund 9.71 7.84 LCIV Private Debt Fund 3.01 6.00 LGIM 1 - LCIV (Passive) 6.32 7.13 LGIM 2 - LCIV (Passive) -7.97 -7.96 LGIM LPI 4.72 3.21 LGIM - Future World Index 5.27 5.02 LCIV MAC Fund 7.84 9.34 LGT Capital Partners 7.07 8.98 M&G Investments -35.49 8.84 Macquarie Infrastructure 9.35 7.84 Permira 7.01 8.84 Ruffer LLP - LCIV 3.94 5.09 UBS Property 3.54 3.44 28 DRAFT The portfol io is a mixture of active and passively managed asset classes: • Targets for active fund mandates are set to out-perform the benchmark by a set percentage through active stock selection and asset allocation. Fund managers with active fund mandates are Adams Street, AEW UK, Baillie Gifford (LCIV), Churchill (LCIV), LGT Capital, M&G, Macquarie, Permira, Ruffer (LCIV), Stepstone (LCIV), UBS Property • Targets for passive funds are set to achieve the benchmark through investment in a stable portfolio. All LGIM mandates are passive. • Underperformance of the Fund was mainly attributable to underperforming Private Equity, LGIM LPI, M&G and LCIV Bailie Gifford Global Alpha portfolios. 29 DRAFT The following table shows the one-year, three-year, and five-year performance of the Fund’s managers. Historical Fund Managers Performance Returns Manager Asset Class Active/Passive Pooled? 1 Year % 3 Yeas % (p.a.) 5 Years % (p.a.) Benchmark % % % Adams Street Private Equity Active No -15.11 -11.04 -0.03 MSCI All Countries World Index AEW UK Property Active No 5.87 -1.04 6.55 IPD UK PPFI All Balanced Funds Index Blackstone Dislocation Active No 2.91 - - 15% Absolute return p.a. LGIM Unit Trust Equity Equities Passive Yes 6.32 7.77 14.78 FTSE World Developed Equity index Currency Hedged, FTSE World Developed Equity index unhedged, FTSE Emerging Markets LGIM Index Linked Gilts Bonds Passive Yes -7.97 -13.78 -7.18 Markit iBoxx £ Non-Gilt LGIM Future World Global Equity Equities Passive Yes 5.27 8.17 - Solactive L&G ESG 30 DRAFT LGIM LPI Property Passive Yes 4.72 -4.57 0.60 Retail Price Index (RPI) LCIV MAC Fund Bonds Active Yes 7.84 - - Sonia 3 Months +4.5%pa LGT Capital Partners Private Equity Active No 7.07 2.42 6.10 MSCI All Countries World Index LCIV Infrastructure Fund Infrastructure Active Yes 9.71 9.84 6.08 Sonia 3 Months +3%pa LCIV Private Debt Fund Private Debt Active Yes 3.01 6.84 - Absolute Return 6% M&G Investments Private Debt Active No -35.49 -17.76 -9.17 Sonia +4%pa Macquarie Infrastructure Infrastructure Active No 9.35 16.99 15.77 Sonia +3%pa Permira Private Debt Active No 7.01 9.60 7.23 Sonia +4%pa LCIV Ruffer LLP Diversified Growth Active Yes 3.94 -0.40 5.08 Sonia UBS Property Property Active No 7.73 -2.94 3.20 IPD UK PPFI All Balanced Funds Index Fund Manager Performance Ove rall, the Fund's assets underperformed the benchmark over all measurement periods of 1 year, 3 years and 5 years. Key Findings • Infrastructure managers delivered consistently strong returns across all periods. • Equities (passive LGIM) show robust 5-year compounding, aligned with global beta. • Property shows recent recovery but remains negative over 3 years. • Private Debt and Private Equity exhibit mixed results; some mandates underperformed materially. • Index-linked gilts produced negative returns across all horizons, reflecting rate-reset headwinds. 31 DRAFT Top & bottom fun d manager performance by period 1-Year (most recent) Top 3 • LCIV Infrastructure Fund – 9.71% (Infrastructure) • Macquarie Infrastructure – 9.35% (Infrastructure) • LCIV MAC Fund – 7.84% (Bonds/MAC) Bottom 3 • LGIM Index Linked Gilts – -7.97% (Bonds) • Adams Street – -15.11% (Private Equity) • M&G Investments – -35.49% (Private Debt) 3-Year (p.a.) Top 3 • Macquarie Infrastructure – 16.99% (Infrastructure) • LCIV Infrastructure Fund – 9.84% (Infrastructure) • Permira – 9.60% (Private Debt) Bottom 3 • Adams Street – -11.04% (Private Equity) • LGIM Index Linked Gilts – -13.78% (Bonds) • M&G Investments – -17.76% (Private Debt) 32 DRAFT 5-Year (p.a.) Top 3 • Macquarie Infrastructure – 15.77% (Infrastructure) • LGIM Unit Trust Equity – 14.78% (Equities) • Permira – 7.23% (Private Debt) Bottom 3 • Adams Street – -0.03% (Private Equity) • LGIM Index Linked Gilts – -7.18% (Bonds) • M&G Investments – -9.17% (Private Debt) 33 DRAFT Comparative Performance The graph above shows the Fund’s investment returns in comparison with UK Local Authorities average over one, three and five-year periods. The performance difference is partly attributable to the cautious investment philosophy and risk averse asset allocation strategy adopted by the Fund. 4.57 3.05 6.95 3.40 3.60 8.30 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 1 year 3 Years 5 Years Percentage % LB Hillingdon Comparitive Performace as of 31 March 2025 LB Hillingdon Local Authority Universe 51 19 13 5 5 7 0 55 18 10 2 4 8 3 0 1 02 03 04 05 06 0 Equities Bonds Alternatives Diversified Growth/Dislocation Private Debt Property Cash LB Hillingdon Comparitive Asset Allocation as of 31 March 2025 Asset Allocation Comparison Local Authority Universe % Asset Allocation Comparison LB Hillingdon % 34 DRAFT Responsible I nvesting The Fund is committed to being a long-term steward of the assets in which it invests and expects this approach to protect and enhance the value of the Fund in the long term. External investment managers are expected to undertake appropriate monitoring of underlying investments regarding their policies and practices on all issues that could present a material financial risk to the long-term performance of the Fund such as corporate governance and environmental factors, integrating material ESG factors within its investment analysis and decision-making. The Fund’s approach to engagement recognises the importance of working in partnership to magnify the voice and maximise the influence of investors as owners. The Fund expects its investment managers to work collaboratively with others if this will lead to greater influence and deliver improved outcomes for shareholders and more broadly. The fund appreciates that to gain the attention of companies in addressing governance concerns; collaborating with other investors sharing similar concerns may be an effective tool. Exercise of voting rights To ensure effective and consistent use of the voting rights, investment managers are tasked with exercising the voting rights accruing to the Fund. If important issues affecting residents do emanate from actions of invested companies, the Pensions Committee will contact investment managers in charge of assets of such a company to make their opinion known and ask for such to be presented at meetings with the company or reflected in their voting pattern. The graph above shows a breakdown of voting activities by reporting, Fund’s investment managers during 2024-25 financial year (LGIM & LCIV). LGIM were the most active in terms of voting activities by attending and voting at 15,105 meetings. 15,105 140,008 104,868 33,209 1,931977 14,076 11,308 2,727 41 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 Meetings Resolutions Votes With Against Abstention Fund Managers' Voting Data 2024-25 LGIM LCIV 35 DRAFT All man agers’ voting activity relates to the managers’ votes cast for the funds rather than Hillingdon specific shares. Custody The Northern Trust Company acts as the global custodian of the Fund's assets. As part of its normal procedures Northern Trust holds all assets in safe custody, settles trades, securities lending, collects dividend income, provides data for corporate actions, liaises closely with all the investment managers and reports on all activity on a monthly and quarterly basis. Where holdin gs are in pooled funds, the underlying assets held by the relevant funds' custodian are reported to Northern Trust. Regular service reviews take place with Northern Trust to ensure continuous monitoring of the Fund’s requirements. Separation of Responsibilities The Fund employs a global custodian (Northern Trust), independent to the investment managers, to be responsible for the safekeeping of all the monies invested. Northern Trust is responsible for the settlement of all investment transactions and the collection of income. As of the 31 st of March 2025, the Fund’s bank accounts were held with Nat West. Funds not immediately required to pay benefits are held as interest bearing operational cash with the bankers and the custodian. The actuary, Hymans Robertson is responsible for assessing the long-term financial position of the pension fund and issues a Rates and Adjustments statement following 16,082 154,084116,176 35,936 1,972 Consolidated Voting Breakdown 2024-25 Meetings Resolutions Votes With Against Abstention 36 DRAFT their trienn ial valuation of the Pension Fund, which sets out the minimum contributions which each employer in the Fund is obliged to pay over the following three years. D. SCHEME ADMINISTRATION Service De livery Administration of the scheme is undertaken under delegated authority by the Pensions team at Hampshire Pension Services. The administrator is responsible for: • Pensions Administration of the LGPS on behalf of London Borough of Hillingdon as the Administering Authority in accordance with relevant legislation and Committee decisions. • Exploiting information technology to improve service standards and efficiency. Hampshire and LB Hillingdon are working closely together to provide a full administration service covering the collecting, and reconciling of pension contributions, transfers of pension rights in to and out of the LGPS and deferred benefits, payment of pensions, calculations for retirements, re-employment, and death benefits. The agreement with Hampshire details agreed performance targets and key performance indicators are reviewed quarterly at Pensions Committee and Pensions Board. PERFORMANCE INDICATORS The contract with Hampshire Pension Serv ices includes several key performance indicators included to ensure that service to members of the pension fund is effective. The targets are set out below, along with actual performance. Performance indicators for 2024/25 Performance indicators for all measurable metrics Improved throughout 2023/24 due largely to the impact of the new administration provider, Hampshire Pension Services (HPS). Type of Case 0-5 days 6-10 days 11-15 day s16-20 days 21-30 days 31-40 days Total % completed on time Activ e Retirement 99 42 17 0 0 0 158 100% Deferred Retirement 109 131 64 0 0 0 304 100% Estimates 76 236 192 0 0 0 504 100% Deferred Benefits 76 18 55 237 1426 0 1,812 100% Transfers In & Out 7 11 4 0 0 0 22 100% Divorce 12 4 15 0 0 0 31 100% Refunds 13 121 90 0 0 0 224 100% Rejoiners 27 39 56 60 0 0 182 100% Interfunds 110 92 204 0 0 0 406 100% Death Benefits 123 34 40 0 0 0 197 100% GRAND TOTAL 652 728 737 297 1426 0 3,840 100% Time to Complete 37 DRAFT Below are tables of other Administration key performance indicators of activities undertaken through 2024/25. Table A - Total number of casework Ref Casework KPI Total number of cases open as at 31 March (starting position) Total number of new cases created in the year (1 April to 30 Total number of cases completed in 2024/25 Total % of cases completed in 2024/25 Total number of cases set up but not due until 2025/26 Total number of cases completed in 2023/24 Total % of cases completed in 2023/24 A1 Deaths recorded of active, deferred, pensioner and dependent 51 107 158 100% 54 197 100% A2 New dependent member benefits 11 68 79 100% 21 102 100% A3 Deferred member retirements 18 329 347 100% 9 304 100% A4 Active member retirements 5 149 154 100% 7 158 100% A5 Deferred benefits 89 1,072 1,161 100% 170 1,812 100% A6 Transfers in (including interfunds in, club transfers) 120 48 168 100% 112 162 100% A7 Transfers out (including interfunds out, club transfers) 19 228 247 100% 14 298 100% A8 Refunds 3 210 213 100% 10 224 100% A9 Divorce quotations issued 4 41 45 100% 8 31 100% A10 Actual divorce cases 0 0 0 100% 0 0 100% A11 Member estimates requested either by scheme member and employer 129 250 379 100% 109 504 100% A12 New joiner notifications 0 1,815 1,815 100% 4 2,197 100% A13 Aggregation cases 50 165 215 100% 55 182 100% A14 Optants out received after 3 months membership 0 92 92 100% 4 23 100% Total 499 4,574 5,073 577 6,194 Table B - Time taken to process casework Ref Casework KPI Suggested fund target* Actual fund target % compl et ed within fund target in year % completed in previous year B1 Communication issued with acknowledgement of death of active, df d i d d d t b 5 days 5 days 100% 100% B2 Communication issued confirming the amount of dependents pension 10 days 15 days 100% 100% B3 Communication issued to deferred member with pension and lump ti ( t ti ) 15 days 15 days 100% 100% B4 Communication issued to active member with pension and lump sum ti ( t ti ) 15 days 15 days 100% 100% B5 Communication issued to deferred member with confirmation of id l t i ( t l ) 15 days 15 days 100% 100% B6 Communication issued to active member with confirmation of pension dl t i ( t l ) 15 days 15 days 100% 100% B7 Payment of lump sum (both actives and deferreds) 15 days 10 days 100% 100% B8 Communication issued with deferred benefit options 30 days 30 days 100% 100% B9 Communication issued to scheme member with completion of transfer i 15 days 15 days 100% 100% B10 Communication issued to scheme member with completion of transfer t 15 days 15 days 100% 100% B11 Payment of refund 10 days 15 days 100% 100% B12 Divorce quotation 45 days 15 days 100% 100% B13 Communication issued following actual divorce proceedings i.e li ti f P i Sh i O d 15 days 15 days 100% 100% B14 Communication issued to new starters 40 days 20 days 100% 100% B15 Member estimates requested by scheme member and employer 15 days 15 days 100% 100% 38 DRAFT Table C - Communications and engagement Ref Engagement with online portals Percentage as at 31 March C1 % of active members registered 58.31% C2 % of deferred member registered 45.22% C3 % of pensioner and survivor members 48.38% C4 % total of all scheme members registered for self-service 50.09% C5 Number of registered users by age See separate C6 % of all registered users that have logged onto the service in the last 50.90% Communication C7 Total number of telephone calls received in year 2,164 C8 Total number of email and online channel queries received 6,647 C9 Number of scheme member events held in year (total of in-person and 17 C10 Number of employer engagement events held in year (in-person and 40 C11 Number of active members who received a one-to-one (in-person and 0 C12 Number of times a communication (i.e newsletter) issued to: a)Active members 3 (ABS, PSS, newsletter) b)Deferred members 2 (ABS, c)Pensioners 3 (Payslip/P60, newsletter, life certificate) C5: Registrations by age Under 30 30 - 44 45-54 55-64 65-74 75+ Total 715 2,730 3,312 4,981 2,757 950 15,445 Administration KPI table D – Resources Ref Resources D1 Total number of all administration staff (FTE) 9.5 D2 Average service length of all administration staff 6 years 5 months D3 Staff vacancy rate as % 4.20% D4 Ratio of all administration staff to total number of scheme members (all 3,209 D5 Ratio of administration staff (excluding management) to total number of 3,811 Table E - Data Quality Annual Benefit Statements Active Deferred E1 Percentage of annual benefit statements issued as at 31 August 99.28% 99.99% Short commentary if less than 100% 70 active statements not produced by 31/8/23, 66 due to outstanding information from employers, 4 due to an ongoing 1 deferred not produced due to service calculation error. Data category E3 Common data score 92% E4 Scheme specific data score 92% E5 Percentage of active, deferred and pensioner members recorded as 'gone away' with no home address held, or address is known to be out 1.74% E6 Percentage of active, deferred and pensioner members with an email 66.00% E7 Percentage of employers set up to make monthly data submissions 0 E8 Percentage of employers who submitted monthly data on time during N/A Employer performance 39 DRAFT STAFFING COST S ANALYSIS The administration of the Fund is outsourced to Hampshire Pension Services, under a partnership. Agreed monthly charges are invoiced to cover the administration charges along with any added costs for software licences incurred by UPM. 2.00 FTE staff are employed by pension Fund to deal with the added internal administration of the Fund and liaise with Hampshire Pension Services on issues or concerns raised by members. 2.00 FTE staff are employed by the Fund to oversee the governance and accounting side of the Fund. The decrease in costs per member from £46 in 2023/24 to £43 per head in 2024/25 is attributable to reduced governance & oversight costs (38%) in the period under review. The maturity profile of alternative investments resulted in increased performance fees paid to investment managers in this asset class as portfolios continued to wind down due to expiration of their respective investment periods. The cost comparison chart below is the latest comparative figure available from the ONS. 42.81 45.95 55.00 44.69 429.71 455.69 370.06 399.95 0.00 50.00 100.00 150.00 200.00 250.00 300.00