Sutton's pension fund passed £1 billion for the first time, rising £102m to £1,081m. A 114% funding level has already cut what the council and schools pay in.
Sutton Council’s pension fund passed £1 billion for the first time in the year to 31 March 2026, and the result is already showing up in the council’s own budget.
The draft annual report goes to the Pension Committee on Tuesday 29 September. It records net assets rising from £979m to £1,081m, an increase of £102m in one year (Annual Report and Accounts 2025-2026).
The number that matters to council taxpayers
The fund pays the pensions of people who worked for the council, for Sutton schools and academies and for organisations that have taken over council services. Employers pay in, and the rate they pay is set every three years by an actuary.
The 2025 valuation concluded during the year and put the fund’s funding level at 114%, with a surplus of £117m. Three years earlier, at the 2022 valuation, the funding level was 101%.
Because of that surplus, the total contribution rate paid by employers from 2026/27 fell by about 4% of payroll compared with 2022. For the council, that is money that stays in the general fund at a point when it is cutting elsewhere.
One caution on the figures. The report gives the surplus twice, and not identically: the chair’s foreword calls it “c£100m”, while the actuarial section of the same document states £117m. We have used the actuarial figure. The next valuation is due in 2028.
How the investments did
At total fund level the return over the year was 9.1%, which was slightly behind the average for local government pension funds. The report benchmarks against the Pensions & Investment Research Consultants universe of all LGPS funds, whose one-year average was 9.6%.
Over three years the picture reverses. Sutton returned 8.7% against a PIRC average of 7.4%, which the report says puts the fund in the top quartile of LGPS funds.
The fund has also moved more of its money into the London Collective Investment Vehicle, the pool shared by the capital’s councils. Pooled assets reached 91% at the end of March 2026, up from 84% a year earlier, after new investments in a buy and maintain credit fund, a private debt fund and index linked gilts.
Pooling saved £389,000 in 2025/26, marginally down from £395,000, because the fund also bought £70,000 of share capital in the London CIV during the year. The cumulative saving over five years is £1.638m.
Money in, money out
The fund remained cashflow positive, meaning contributions covered the pensions being paid:
- contributions received: £46.062m, up £385,000 on 2024/25
- benefits paid: £43.328m, up from £42.600m
Membership grew by 754 people to 19,883, spread across 69 employers. The split at the end of March 2026:
| Member type | Number |
|---|---|
| Active (still paying in) | 6,368 |
| Deferred | 8,148 |
| Pensioners and dependants | 5,367 |
Within that, the number of active members employed directly by the council fell from 2,571 to 2,503, while scheduled bodies such as academies rose from 3,628 to 3,712 and admission bodies rose from 110 to 153. The growth in the fund’s membership is not growth in the council’s workforce.
The cost of running the scheme fell again, to £272 per member, from £277 the year before and £447 in 2022/23. The report attributes that mainly to investment management costs, which have dropped from £350 per member in 2022/23 to £197.
What it means for you
Nothing here changes anyone’s pension. Local government pensions are defined benefit and set by national regulations, so a surplus does not raise them and a deficit would not cut them.
What it changes is the council’s budget. A fund in surplus costs its employers less, and the employers here are the council, Sutton’s schools and academies, and contractors running former council services. That is the practical local effect of a 114% funding level: roughly 4% of payroll that no longer has to be paid into the fund from April.
Two things to watch. The accounts are draft and still subject to external audit, and the auditor’s opinion will be added before publication; the statutory deadline for the final report is 1 December 2026. And the committee’s stated priority for 2026/27 is implementing the governance changes required by the government’s Fit for the Future reforms to the local government pension scheme, which push funds further towards pooling.
The Pension Committee meets at the Civic Offices, St Nicholas Way, and its papers are public. Committee Services can be reached on 020 8770 4990.
More Sutton local information: council tax bands, bin collection days, planning applications and house prices.
Sources: Sutton Council Pension Committee, 29 September 2026: Annual Report and Accounts 2025-2026 and Appendix A, the draft LBS Pension Fund Annual Report 2025-26. Full agenda at moderngov.sutton.gov.uk.
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