The Pensions and Investments Committee for Derbyshire County Council were scheduled to meet on Wednesday, 3 December 2025, to discuss the investment and stewardship of the fund, proposed changes to the Local Government Pension Scheme, and the 2025 actuarial valuation¹ of the Derbyshire Pension Fund. The committee was also scheduled to confirm the minutes of their previous meeting.

Derbyshire Pension Fund 2025 Actuarial Valuation

The committee was scheduled to discuss the 2025 actuarial valuation of the Derbyshire Pension Fund, which is required every three years under regulation 62 of the Local Government Pension Scheme (LGPS) Regulations 2013. The report pack states that the valuation is a planning exercise to determine the expected cost of providing benefits, the contributions needed, and an adjustment for the difference between the primary contribution rate and the secondary contribution rate.

The report pack notes that the initial whole fund results of the actuarial valuation of Derbyshire Pension Fund at 31 March 2025 were presented at the previous meeting. At this meeting, the committee was scheduled to consider the Fund's draft updated Funding Strategy Statement, attached as Appendix 2 of the Public Reports Pack, for consultation with relevant stakeholders, and the Fund's draft updated Admission, Cessation and Bulk Transfer Policy, attached as Appendix 3.

The Funding Strategy Statement sets out the funding policies adopted, the methodology for determining actuarial assumptions, and the time horizons considered for each category of employer. The report pack notes that the Funding Strategy Statement has been updated to comply with new guidance from the Ministry for Housing, Communities and Local Government, and to reflect the following additions/changes:

• The target funding level may be set greater than 100% as a buffer against future adverse experience.
• Increased likelihoods of success for all categories of employer, recognising increased uncertainty in the funding environment.
• Where nil rates are certified, this may be subject to an annual check.
• The stabilisation approach extended to Town and Parish councils and to Further Education Colleges.
• The stabilisation approach extended to allow contribution increases and decreases of up to 2% of pay a year for academies.
• The administering authority may permit acceleration or extension of contribution rises and reductions within the contribution stability mechanism.
• Funding levels of each individual Town or Parish Council are adjusted to the overall pool funding level at each triennial valuation.
• The Fund will not accept any form of non-cash assets in lieu of contributions.
• The default approach for the payment of funding strains relating to ill-health retirement is for them to be included in the consideration of the employer's contribution rate at the following actuarial valuation.
• Academies joining the Fund will generally pay contributions, until the next actuarial valuation, which are initially linked to the contribution rate of the councils in the Fund which operate local authority maintained schools.
• Reference to partnerships between local authorities and the NHS under Section 75 of the National Health Service Act 2006 being considered as being similar to a community admission body removed as this is not the case.
• Subject to the clarification for the legal basis for a partial cessation, the Fund will consider requests for a partial cessation on an individual basis, only where exceptional circumstances apply.
• Information on gender pension gap reporting will be added to the FSS when reporting requirements are clarified.

The Admission, Cessation and Bulk Transfer Policy sets out the Fund's approach to the admission of new employers, bulk transfers of members, and employers ceasing participation. The proposed changes to the policy include:

• The inclusion of the Department for Education's LGPS guarantee for Further Education Colleges in the event of closure.
• Clarification that a Deferred Debt Agreement requires a legal agreement signed by all parties.
• Clarification that actuarial and other professional costs incurred as a result of a Bulk Transfer will be recharged to the relevant employer.

Investment Report

The committee was scheduled to review the fund's asset allocation, investment activity, and long-term performance analysis. They were also scheduled to consider a recommendation from the Director of Finance and Anthony Fletcher, the Fund's independent external advisor, regarding the investment strategy.

According to the report pack, the value of the Fund's investment assets rose by £341m (+4.8%) between 31 July 2025 and 31 October 2025 to £7,371m, comprising a non-cash market gain of around £321m and a cash inflow from dealing with members and investment income of around £20m.

The report pack notes that the Fund is in the process of updating its Investment Strategy Statement for the impact of the government's Fit for the Future requirements², including mapping the Fund's current strategic asset allocation benchmark into line with the nine asset class categories included in the FFTF proposals, setting out the Fund's local investment target and updating the Fund's investment beliefs.

The report pack also includes a report from Anthony Fletcher, incorporating his view on the global economic position, factual information for global market returns, the performance of the Fund, and his recommendations on investment strategy and asset allocation.

Mr Fletcher notes that he remains cautious on equity markets, particularly global sustainable equities because of valuation concerns, particularly in respect of US tech/AI equities.

The report pack notes that the IIMT recommends reducing Growth Assets by 1.7% to 49.4% (0.6% underweight) (UK Equities -0.9% and Global Sustainable Equity -0.8%), increase Income Assets by 1.0% to 26.4% (Property +1.0%); increase Protection Assets by 0.8% to 20.0% (Conventional Bonds +0.6%; Index-Linked Bonds +0.1%; and Corporate Bonds +0.1%); and reduce Cash by -0.1%.

Stewardship Report

The committee was scheduled to receive an overview of the stewardship activity carried out by LGPS Central Limited (LGPSC). According to the report pack, LGPSC currently manages around £1.8bn of assets (£2.0bn on a committed basis) on behalf of the Fund through various sub-funds and limited partnership arrangements. LGPSC also provides oversight of the Fund's Legal & General Investment Management (LGIM) arrangements on an advisory basis, including the engagement and stewardship of the assets managed through LGIM pooled products.

The LGPSC report provides an overview of the investment manager's current key stewardship themes and voting and engagement activity.

The report pack includes the Q3 2025 LGPSC Stewardship Update, which provides a summary of engagement and voting activities and key stewardship developments.

Key stewardship developments mentioned in the report include:

• Key Takeaways from the OECD Corporate Governance Factbook 2025
• Exxon Mobil's Retail Voting Program
• Controlled Companies Underperform

Engagement highlights mentioned in the report include:

• CDP 2025 Non-Disclosure Campaign
• Climate
• Natural Capital
• Human Rights
• Advocacy

Voting highlights mentioned in the report include:

• General Mills Inc.
• Marks & Spencer Group plc

Local Government Pension Scheme Scheme Improvements (Access and Protections) Consultation

The committee was scheduled to be informed about the publication by the Ministry for Housing, Communities and Local Government (MHCLG) of the 'Local Government Pension Scheme in England and Wales: Scheme improvements (access and protections)' consultation. They were also scheduled to consider delegating the Pension Fund's response to the Consultation to the Director of Finance in consultation with the Chair of Committee.

The consultation covers proposed amendments to the LGPS 2013 Regulations, including:

• Amending the Normal Minimum Pension Age to age 57, following the Finance Act 2022.
• Extending access to the scheme for councillors and mayors in England.
• Introducing criteria for applications for directions from Academies into legislation, and removing the requirement for consent from the Secretary of State where all criteria are met.
• Implementing New Fair Deal protections into the LGPS, aligning across government in ensuring continued access to the LGPS for outsourced workers.