The Local Pension Committee is scheduled to meet on Friday, 5 December 2025, to discuss a range of topics including an update from LGPS Central, the valuation of pension fund investments, and the fund's climate-related disclosures. Also to be discussed are investment advisor objectives for 2026, the implications of local government reorganisation, and risk management and internal controls.

Climate-Related Disclosures and Responsible Investment

The committee will be provided with the Fund's 2025 Climate Related Disclosures Report, and an update on the Responsible Investment (RI) Plan 2025. The report pack states that representatives from LGPS Central will deliver a presentation as part of this item.

The Climate Related Disclosures Report is structured around the four pillars of the Task Force on Climate-Related Financial Disclosures (TCFD): governance, strategy, risk management, and metrics and targets. The report pack notes that the Fund is aiming to achieve net zero by 2050, with an ambition to achieve this sooner.

The report pack states that the Fund has achieved its first interim target of reducing the weighted average carbon intensity¹ (WACI) by 50% by 2030, with an actual reduction of 55.6%. It also states that the Fund has achieved its second interim target of having reduced its financed emissions by 40%, with an actual reduction of 42.2% from a baseline set in 2019, by 2030 for in-scope investments.

The report pack says that the Fund now has over £1.5 billion (circa 20% of the total Fund) directly allocated to climate-related investments across equity, debt, infrastructure and forestry.

The report pack also notes that within the equity portfolio 75.8% of equity financed emissions are considered to be aligned/aligning to the Paris Agreement, or under an engagement programme.

The report pack states that LGPS Central have proposed two additions to the Climate Stewardship Plan (CSP):

• ArcelorMittal
• RWE It is also proposed to remove Taiwan Semiconductor Manufacturing Company from the CSP.

The report pack includes a quarterly voting report, and highlights some engagement activity from partners, including LGPS Central and the Local Authority Pension Fund Forum (LAPFF).

LGPS Central Presentation

Representatives from LGPS Central are scheduled to provide a presentation to the committee. According to the report pack, the presentation will focus on public market investments and will also cover:

• A general markets update
• The four public market investments that the Fund holds with Central: the global active equity fund, global climate multi factor fund, global investment grade bond fund and the global multi asset credit fund.

Valuation of Pension Fund Investments

The committee will receive an update on investment markets and the performance of individual asset classes, as well as the total value of the Fund's investments as of 30 September 2025. The report pack includes the scope for the annual review of the Fund's strategic asset allocation (SAA).

The report pack includes a summary of global asset class performance over various time frames as at quarter end 30 September 2025. It notes that the standout classes over the longer term remain listed global equity, US listed equity, private equity and gold.

The report pack states that the annual meeting of the LPC on 31 January 2025 approved an increase to listed equity to 41% (from 37.5%) of total fund assets, a reduction to the property allocation to 7.5% of total Funds assets from the existing (2024) 10% target, and a reduction to the private global credit allocation from a 10.5% allocation to 9.5%.

The report pack notes that the level of cash held by the Fund is higher than the SAA limit of 0.75% of total Fund assets. It states that at the quarter ended 30 September 2025 the Fund held £561million in cash and an additional £59million with Aegon as collateral in order to support the currency hedge.

The report pack states that at the meeting of the ISC on the 1 October 2025, it was approved to top up an additional £120m to the 2024 Central private debt sleeves (£90m to Direct Lending and £30m to real assets), to make an additional £90m commitment to the Aegon Short Dated Investment Grade corporate bond investment from general cash balances, and to make £110m per annum of new commitments to private equity, to be split as follows: £65m to the LGPS Central 2025 PE primary sleeve, £15m to the 2025 co-investment sleeve subject to satisfactory due diligence, and a further £30m earmarked for potential allocation (£15m each to secondary and venture sleeves), subject to satisfactory due diligence.

The report pack includes a capital markets update from Hymans Robertson, which notes that global growth in the first half of 2025 was partly supported by solid business investment and frontloaded orders ahead of US tariff hikes, but that growth is set to slow modestly in the second half as tariff effects deepen.

Investment Advisor Objectives 2026

The committee will be asked to approve the proposed 2026 investment advisor objectives for Hymans Robertson, the Fund's investment advisor. The report pack notes that the Investment Consultancy and Fiduciary Management Market Investigation Order 2019 requires pension scheme trustees to set strategic objectives for their investment consultants.

The report pack includes a list of objectives proposed for 2026, which include clear expectations of relationship and service standards and focus on the work to be undertaken over the next year relating to 'Fit for the future'.

Local Government Reorganisation

The committee will be informed of the possible administrative implications of Local Government Reorganisation (LGR) on the Leicestershire Local Government Pension Fund.

The report pack notes that all councils across Leicester, Leicestershire and Rutland (LLR) submitted interim plans and have submitted final proposals in November, although there is no agreement on the preferred option.

The report pack states that the preferred options included in the submitted Business Cases are a single County Unitary for Leicestershire and Rutland (County Council preferred option), an expanded City boundary with a single County Unitary for the residual County area and Rutland (Leicester City Council preferred option), and a three Unitary option North, City, South Rutland and district councils preferred option.

The report pack notes that Leicestershire County Council is currently the Administering Authority (AA) for the Leicestershire Pension Fund, which has over 180 active employers and approximately 109,000 scheme members.

The report pack sets out the potential implications from each of the preferred options. It notes that with the single County Unitary option, there would be no change to overall scheme membership within the Leicestershire Fund, but that if the County Council is replaced by a new single unitary authority, a new AA would need to be designated to take over the function of managing and administering the LGPS and maintenance of the Fund.

Risk Management and Internal Controls

The committee will be provided with information on any changes relating to the risk management and internal controls of the Pension Fund, as stipulated in the Pension Regulator's Code of Practice.

The report pack notes that the latest version of the Fund's risk register was approved by the Local Pension Committee on the 26 September 2025, and that officers meet quarterly to discuss the risk register.

The report pack states that there have been a handful of updates to text on four existing risks since the previously approved risk register, and no changes to risk scores.

The report pack notes that the wording of risk 18 has been updated to include the potential risk from local government reorganisation/devolution, alongside Fit for the Future proposals which will impact on the Fund and its pooling provider.

The report pack also includes an update on the oversight of LGPS Central, and notes that the last meeting of the Joint Committee took place on 17 October 2025.

The report pack states that the Leicestershire County Council Corporate Governance Committee met on the 24 November 2025 to consider the external audit of the 2024/25 statement of accounts, including the pension fund accounts that were previously presented to the Local Pension Committee at the September meeting.