The Gloucestershire Pension Committee is scheduled to meet to discuss a business update on the Gloucestershire Pension Fund, including governance, operations, funding and investment. The committee will also be asked to approve the annual data improvement plan. The meeting will include updates on investment performance, risk management and various consultations and legislative changes impacting the Local Government Pension Scheme¹ (LGPS).

Gloucestershire Pension Fund Business Update

The committee will be asked to note the draft Pension Board minutes of 23 October 2025, the Risk Register, the audit finding report for 2024-25, and currently open consultations, governance and operational updates.

Risk Register

The committee will be asked to note the risk register. The report pack includes a summarised version of the risk register, a summary of the main changes since the previous report, and the fund's risk dashboard showing the score of all existing risks and any changes as part of that dashboard. The risk register provides a dashboard overview of the risks in the following 3 categories: governance, funding and investment (includes accounting and audit), and operational. According to the agenda item 6, Gloucestershire Pension Fund Update - Governance Operations, a new risk on Funding & Investment has been introduced in respect of the requirements in respect of the transitioning or assets to LGPS Central² and the potential cost implications of exiting their Shareholding in Brunel Pension Partnership³. This new risk has been categorised as a red risk. The following risks remain above their risk target and will be tracked through the dashboard:

• Governance
  • Risk 1, which relates to knowledge assessment, showed good progress but also highlights areas for further deployment of the training strategy/plan.
  • Risk 7, which relates to asset pooling, will remain elevated until a recommendation of a new pooling partner has been considered and access to the new pooling partner confirmed.
• Funding & Investment
  • Risk 17, a new risk, is around the transitioning of assets to the new pool, the costs incurred with this and also the potential cost of exiting the shareholding in Brunel.

Consultations

The committee will be asked to note the currently open consultations. The government remains highly active in the LGPS and have launched a further consultation on a range of issues. Key areas of the consultation are:

• Normal Minimum Pension Age
• LGPS access for Councillors and Mayors
• Academies
• New Fair Deal

Normal Minimum Pension Age (NMPA)

Following the previous decision that the NMPA for UK pension schemes should go up to 57 from 6 April 2028 for all retirements except ill-health, the consultation proposes how this would be implemented in the LGPS. If an LGPS member (active or deferred) was in the LGPS immediately before 4 November 2021, they would have a Protected Pension Age (PPA) and retain their right to take their pension from age 55 after 6 April 2028. Members joining on or after 4 November 2021 would not have a PPA. From 6 April 2028, they would only be able to take their pension from age 57. The government confirm that where an LGPS member has transferred service from a scheme where they had an actual or prospective right to a pension from 55, they will not have a PPA in the LGPS. The consultation notes that the protections will be complex to administer and states that administrators will need to go back to immediately before 4 November 2021 to confirm which of their members had an unqualified or prospective right to take benefits before 57 at that time to deliver this change.

LGPS access for councillors and mayors

The government's view is that councillors and mayors provide a vital public service and is proposing that councillors and mayors in England should have access to the LGPS. All English mayors and deputy mayors as well as councillors of principal English local authorities would have access to the LGPS. This will also apply to the Mayor of London and London Assembly Members. Councillors who are remunerated for roles (e.g. on combined authorities or audit committees) will be eligible for pension benefits on this remuneration. Elected members will participate as members in the 2014 Scheme⁴.

Academies

The government are proposing changes to the LGPS employer consolidation rules. These are largely driven by the growth in multi-academy trusts (MATs) with over half of English schools now being academies. The government notes that being able to consolidate all of a MAT's schools into one LGPS fund may bring benefits for MATs, but recognises that these benefits need to be weighed against risks at the local level. Although the proposal is framed around academies, other employers will be able to use the same approach. To ensure a balance between these factors, the consultation proposes four criteria for consolidation are put in place:

• Clear value-for-money assessment in favour of consolidation
• Pre-existing relationship with the fund the MAT wishes to consolidate into i.e. the MAT should already have academies in that administering authority.
• All administering authorities involved agree to the consolidation
• The receiving fund must be able to administer the transfer effectively

New Fair Deal

Following previous consultations, the government is seeking to implement new Fair Deal in local government, and is consulting on regulations to achieve this. Scheme members working for Fair Deal employers would retain a right to LGPS membership after being outsourced to a contractor under the new regulations. The broadly comparable scheme option would be removed and could only be used in the future in certain exceptional circumstances. Building on the 2019 consultation proposals, it is proposed that the only way for a contractor to participate in the LGPS would be though the 'deemed employer' route – where the member would be treated as being a member of their prior employer (the employer undertaking the outsourcing) for LGPS purposes, with the contractor having set responsibilities to comply with and future contracts being required to adopt a 'pass-through arrangement' for scheme contributions. The admission body route would not be permitted. All LGPS employers would be Fair Deal employers and must follow the Fair Deal requirements with the exception of higher education corporations and admission bodies.

LGPS: Fit for Future - Technical Consultation

On 20 November, a technical consultation relating to two draft statutory instruments relating to Fit for the Future reforms for the LGPS was launched. The consultation has 29 questions on two new sets of draft regulations, with a 6-week deadline of 2 January 2026.

The consultation is split into two sections. The first covers 23 questions regarding the draft Local Government Pension Scheme (Pooling, Management and Investment of Funds) Regulations 2026, which will replace the Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016 and give legal effect to the proposals set out in the Pooling and Local Investment chapters of the 'Fit for the Future' consultation. The second section asks six questions tackling the draft Local Government Pension Scheme (Amendment) Regulations 2026, which tackle the governance section of Fit for the Future.

The Local Government Pension Scheme (Pooling, Management and Investment of Funds) Regulations 2026

The draft regulations aim to put into place the Pooling and Local Investment chapters of the 'Fit for the Future' consultation. The key parts of which will be to:

• Require a Fund to participate in a pool, and only one pool.
• Require a Fund to delegate the implementation of their investment strategy to their asset pool and for pools to have the abilities to properly implement the investment strategies.
• Require Funds to take principal investment advice from their pool.
• Set out requirements as to the contents of an investment strategy.
• Require that investment strategy reviews must be undertaken within 18 months of the actuarial valuation date and that the first investment strategy under the new regulations must be published in an Investment Strategy Statement (ISS) by 30 September 2026.
• Require pools to take all reasonable steps to implement a fund's investment strategy.
• Require all assets to be controlled and managed by the relevant asset pool.
• Establish minimum standards for pools, including FCA authorisation and capacity to manage local investments.
• Require compliance from 1 April 2026, subject to passage of the Pension Schemes Bill through Parliament and with limited flexibility in specific cases

The Local Government Pension Scheme (Amendment) Regulations 2026

The regulations put into place the Governance chapter of the 'Fit for the Future' consultation. The key points are summarised below.

Governance strategy, training strategy and conflict of interest strategy

Regulations will require a Fund to prepare and publish a governance strategy, a training strategy, and a conflict of interests policy. The governance strategy will be similar to the existing governance compliance statement but with two new areas:

• where there are no scheme member or employer representative (either voting or non-voting) on the pension committee the Fund must state how their views are taken into account.
• the appointment of an independent person.

Senior LGPS officer

Regulation will require each Administering Authority to appoint a senior LGPS officer by 1 October 2026. This is a statutory role and the senior LGPS officer must ensure that the fund is appropriately managed and resourced in respect of all matters relating to the Scheme (such as administration, investment and governance) . The senior LGPS officer cannot be any individual who has another statutory local government role i.e. the section 151 officer, monitoring officer or head of paid service.

Independent person

Regulation will require each Fund to appoint an independent person as a non-voting member of their committee by 1 October 2026. The role involves advising on investment strategy, governance and administration.

Knowledge and understanding

Regulation will require that committee members and officers carrying out a delegated function must be conversant with the rules of the Scheme and any document recording policy about the administration of the Scheme. They also must have knowledge and understanding of the law relating to pensions. The level of knowledge and understanding required is that which allows that person to properly exercise their functions . These requirements are broadly the same as those that apply to pension board members under the Pensions Act 2004.

Administration strategy

Regulation will require a Fund to prepare an administration strategy which must be reviewed every three years.

Independent governance reviews

Regulation will require each Fund to undergo an independent governance review at its own cost. The first review must take place by 31 March 2028 and then again within every threeyear period from that date. The Secretary of State has the power to require an independent governance review at any time.

Pension Schemes Bill Update

The Pension Schemes Bill is part of the UK government's broader pensions reform agenda, aiming to:

• Accelerate LGPS asset pooling
• Enhance governance
• Stimulate UK investment
• Improve member outcomes

It builds on the Fit for the Future LGPS consultation in November 2024 and the Mansion House reforms⁵. The Bill is scheduled for a sitting on 3 December 2025 at report stage in the House of Commons.

Gloucestershire Pension Fund Update - Funding & Investment

The committee will be asked to note the fund's position at 30 September 2025, including the investment performance as detailed in the report and associated appendix, and request such clarifications and further information from officers as maybe required.

Funding

As the 2025 triennial valuation process is underway, the usual quarterly funding update will not be available during the remainder of this process. Normal funding level monitoring will recommence from 1 April 2026, once the new valuation assumptions are formally adopted.

Investment Update

Over the quarter to 30 September 2025, the Fund's total market value increased by £200.520m, to £3,928.604m. Over the previous 12 months, total Fund assets underperformed the strategic benchmark by 2.0%, with a return of 10.0%. Performance over the 3 years to 30 September 2025 was 10.30% annualised, which is slightly behind the strategic benchmark by 0.50%.

Quarterly Market Commentary

Global equity markets delivered strong gains in the third quarter, helped by easing tariff concerns, resilient economic data, and the US Federal Reserve's first rate cut of the year.

Investment Activities and Strategic Asset Allocation (SAA)

During the Quarter the following investment activity took place:

• During the quarter there has been a number of calls into the private markets (exc property) asset classes of:
  • Infrastructure - c£0.1m
  • Social & Affordable Housing - c£20.8m
  • Private Equity - c£2.9m
  • Private Debt - c£1.5m The current SAA is as follows:

At quarter ending 30 September 2025, the overall strategic allocations are outside target allocations, mainly due to the strong performance of equity markets. Currently, rebalancing is being cautiously approached to ensure the cost benefit of these transition costs are appropriate.

Responsible Investment Update

The Fund is a member of The Local Authority Pension Fund Forum (LAPFF)⁶. Faith Ward, Chief Responsible Investment Officer at Brunel, has received her MBE at Windsor Castle for services to pensions and the environment .

Independent Advisors Fund report and analysis

John Arthur has prepared a report, which he will deliver at the meeting, in his role as independent advisor to the Fund. The report provides further detailed analysis on the overall performance of the Fund, the underlying managers and investment mandates held by the Fund and the Long-term Capital Market Assumptions used in establishing the SAA.