The Investment and Pension Fund Committee of Devon Council met on Friday 27 February 2026 to discuss a range of important matters concerning the management and future direction of the Devon Pension Fund. Key decisions included approving the transition to the LPPI investment pool, adopting a new Conflicts of Interest Policy, and endorsing the Funding Strategy Statement.

Transition to LPPI Investment Pool

The Committee approved the transition of the Devon Pension Fund's investment pooling arrangements from Brunel to Local Pension Partnership Investments (LPPI). This significant decision involves Devon County Council becoming a shareholder in LPPI Holdings Ltd, providing the required regulatory capital, and appointing the Assistant Director – Pensions and Investments as a Director of LPPI Holdings Ltd. An Advisory Management Agreement with LPPI was also approved. The Committee also authorised the Director of Finance and Public Value and the Director of Legal and Democratic Services to finalise agreements and manage the wind-down of Brunel Pension Partnership Ltd. The Assistant Director – Pensions and Investments will act as the nominated Shareholder Representative for Brunel Pension Partnership from 1 March 2026. This transition is driven by government aspirations to have all assets transitioned to LPPI by 1 April 2026, a tight timeframe that was noted with concern by members. The estimated £3 million regulatory capital requirement, necessary under Financial Conduct Authority regulations, was also discussed, with disappointment expressed regarding the lack of direct government funding. The Committee emphasised the importance of maintaining scheme member representation within the new governance structures and ensuring continuity of responsible investment policies.

Funding Strategy Statement and Triennial Valuation

The Committee approved and adopted the Funding Strategy Statement (FSS) following employer consultation. The FSS outlines the approach to managing the fund's assets and liabilities to ensure solvency and long-term cost efficiency. The report noted that consultation responses from employers were minimal, with a detailed submission received from the Department for Education regarding the treatment of academies. Officers confirmed that the strategy treated academies equitably compared to other employer types. An update on the 2025 Triennial Valuation was also provided, indicating an overall funding level of 100% for the Devon Fund, though individual employer funding levels vary. The formal Valuation Report is expected to be published by 31 March 2026.

Conflicts of Interest Policy

A new, fund-specific Conflicts of Interest Policy was approved by the Committee. This policy builds upon the Devon County Council's existing constitutional guidance but introduces additional requirements tailored to the governance of the Local Government Pension Scheme (LGPS) fund. Key elements include annual declarations, a dedicated Fund Register of Interests maintained by the Senior LGPS Officer, and formal procedures for identifying, managing, and monitoring conflicts. The policy extends to external advisers and addresses specific LGPS governance and fiduciary safeguards. The Committee noted that clearer examples of potential and actual conflicts would be beneficial for future iterations of the policy.

Fund Member Survey Results

The results of the 2025 Fund Member Survey were noted, with over 5,200 responses received. The survey indicated strong support for the Fund's fiduciary duty to maximise returns at an appropriate level of risk. A clear majority of respondents were against investments in weapons manufacturing, tobacco, and companies linked to international law violations, with more balanced views on fossil fuels and other controversial investments compared to previous surveys. The Committee agreed to forward the survey results to LPPI for consideration in their implementation of the Devon Fund's investment policies. Discussions highlighted the challenge of engaging deferred members and the value of postal surveys in reaching a broader demographic.

Investment Management Report

The committee reviewed the Investment Management Report as at 31 December 2025. The Fund's value stood at £6.84 billion, with a quarterly return of +2.3% and a financial year-to-date return of +11.6%. Following recent rebalancing, the Fund remained slightly overweight to equities, but within acceptable tolerances. Concerns were raised regarding the concentration in major US technology stocks within both passive and active equity portfolios, and officers agreed to enhance reporting on the Fund's exposure. The importance of responsible investment continuity during the transition to LPPI was reiterated.

Peninsula Pensions Administration Update and Performance Statistics

The committee received an update on the performance of Peninsula Pensions, noting generally strong results for the quarter ending 31 December 2025, with 94% of all cases completed within statutory timescales. The team highlighted ongoing workload pressures, particularly from the McCloud remedy work and seasonal peaks, but also noted improvements in backlog reduction and case recording. A minor amendment to the Administering Authority Discretions was approved to strengthen resilience in handling Stage 2 appeals under the Internal Dispute Resolution Procedure by including deputies for the Director of Finance and Public Value and the Director of Legal and Democratic Services.

Peninsula Pensions Employer Performance Report

The committee reviewed employer performance data for the quarter ending 31 December 2025. Broadly steady levels of starter and leaver notifications were reported, with continued monitoring of employer timeliness. Seven employers incurred fines for persistent late data submission, following prior warnings. Assurance was given that all previously issued fines had been paid, and employers with slower processing times were being contacted directly to improve compliance.

Internal Audit Plan 2026/27

The proposed Internal Audit Plan for 2026/27 was approved. The plan includes an increase in planned audit days to reflect wider regulatory change and aligns with emerging LGPS risks. The Committee sought clearer explanations on audit prioritisation in future reports and received assurance that the plan remains flexible.

Governance - Senior LGPS Officer and Independent Person

The committee considered the appointment of a Senior LGPS Officer and an Independent Person, as required by new LGPS regulations. The Assistant Director – Pensions and Investments was designated as the Senior LGPS Officer. The committee approved the revision of the specification for the Independent Advisor role, which has an expanded remit beyond investment advice, and approved the undertaking of a procurement process to appoint an Independent Person. Discussions touched upon potential conflicts arising from the Independent Person's role in scrutinising both the Committee's work and supporting the Pension Board.

Pension Fund Treasury Management Strategy 2026/27

The Treasury Management Strategy for 2026/27 was adopted. The strategy, which applies to the management of the Fund's cash allocation for short-term pension payments, remains broadly consistent with previous strategies and focuses on security, liquidity, and yield.

The meeting also noted the minutes of the Devon Pension Board and the Brunel Oversight Board.