The Pension Committee of Gloucestershire Council met on Thursday 11 June 2026 to discuss the Gloucestershire Pension Fund's governance, operations, funding, and investment performance. The meeting agenda included updates on regulatory changes, the transition to LGPS Central, risk management, and the Fund's financial statements.

Gloucestershire Pension Fund Business Update - Governance & Operations

Matthew Trebilcock, Head of Pensions, presented an update on the governance and operational matters of the Gloucestershire Pension Fund. The committee was asked to note the draft Pension Board minutes from 28 April 2026, the new regulatory framework the Fund would operate under, and the delegations actioned to enable the Fund to join LGPS Central. Updates were also provided on the Risk Register, including amendments, and the governance and operational updates for the 2025/26 budget outturn and the 2026/27 business plan.

Key governance updates included information on the Pension Schemes Bill, which received Royal Assent on 29 April 2026, and amendments to LGPS Regulations concerning member benefits and elected member pensions. The committee was informed about the new LGPS (Pooling, Management and Investment of Funds) Regulations 2026 and the LGPS (Amendment) (Governance) Regulations 2026, which were set to take effect from 30 June 2026. These regulations introduced changes to implementation timescales, FCA authorisation requirements, direction powers, investment strategy statement requirements, consultation processes, and borrowing and liquidity.

The report detailed the activity undertaken to develop and assure the documentation for LGPS Central, highlighting a robust governance oversight, comprehensive legal documentation, independent legal assurance, and a controlled sign-off process.

The committee was presented with the Fund's Risk Register, which indicated that Risk 1 (Governance arrangements) remained above its target due to new committee members requiring training, while Risk 7 (Pooling transition costs) had moved back to its target following the Fund's joining of LGPS Central. Risk 17 (Exit costs from Brunel) was also noted as having moved back to target.

Operational updates included a review of Key Performance Indicators (KPIs), which showed performance remaining above the 90% threshold over a rolling 12-month period, although transfers out had fallen short of the 90% target in the last quarter. Case volumes were reported as steady but with an upward long-term trend. The 2025/26 budget outturn showed an overall overspend of £1.453 million (24%), which was in line with forecasts. This was largely attributed to Brunel wind-up costs and transition costs to LGPS Central. The Business Plan for 2026/27 outlined core projects including asset pool transition, governance reforms, benefit regulatory reforms, cyber security, and the rollout of the iConnect employer portal.

Gloucestershire Pension Fund Update - Funding & Investment

Matthew Trebilcock, Head of Pensions, presented an update on the Fund's funding position, investment performance, and responsible investment activity. The committee was asked to note the Fund's position at 31 March 2026, including investment performance, and to request any necessary clarifications.

The estimated funding position at 31 March 2026 showed assets of £3.98 billion against liabilities of £2.75 billion, resulting in a surplus of £1.23 billion and a funding level of 145%. This represented a slight decrease from the 2025 valuation funding level of 152%. The report noted that the funding position was sensitive to assumed future investment returns.

Investment performance for the quarter to 31 March 2026 showed a decrease in the Fund's total market value by £67.753 million, to £3,957.742 million. Over the previous 12 months, total Fund assets underperformed the strategic benchmark by 2.9%, with a return of 10.0%. Performance over the three years to 31 March 2026 was 8.5% annualised, behind the strategic benchmark by 1.6%. A quarterly market commentary highlighted geopolitical tensions and rising energy prices as factors influencing market movements.

The report detailed investment activities, including calls into private markets and the transition of assets from Brunel Pension Partnership to LGPS Central. Notably, listed equity transitions were scheduled for April–May 2026, with the management of various portfolios transferred to LGPS Central from 1 April 2026.

Updates on responsible investment included the LAPFF Quarterly Engagement Report, the submission of the Fund's 2026 Stewardship Code report, and Brunel's Climate Change Progress Report 2026. The report highlighted strong progress on portfolio decarbonisation, with listed equities ahead of target and corporate bonds on track. However, progress on alignment and stewardship was noted as slower, requiring further improvement.

An independent advisor's report was presented, providing detailed analysis on the Fund's overall performance, underlying managers, investment mandates, and long-term capital market assumptions.

Audit Plan 2025-26

Nigel Gabb, Strategic Pensions Manager, presented the External Audit Plan for the financial year ending 31 March 2026, prepared by KPMG. The committee was asked to note the plan, which outlined KPMG's approach to the audit, the audit cycle timeframe, and associated fees. The planned audit fee was £94,968, with materiality set at £35.9m. The audit was scheduled to commence on or around 15 June 2026, with formal findings to be considered in September 2026. Key developments noted included the Fund joining LGPS Central as a new pooling partner, which would result in the Brunel Pension Partnership shareholding being written down to zero.

Annual Review of Analytics for Climate Transition

Matthew Trebilcock and Nigel Gabb presented an update on the Fund's net zero commitments. The report highlighted continued strong progress on portfolio decarbonisation, with listed equities ahead of target and corporate bonds on track. However, progress on alignment and stewardship required further improvement. The analysis indicated that a proportion of reported emissions reductions were driven by valuation effects rather than underlying emissions reductions, emphasizing the importance of engagement with companies. Data availability for private markets had improved, allowing for initial analysis, but further work was needed before formal targets could be set. The report also detailed enhancements to the analytical approach, including EVIC-adjusted carbon footprint analysis. Next steps included considering formalising 2035 targets, exploring climate solutions targets, progressing private markets data aggregation, and potentially allocating to natural capital.

Draft Investment Strategy Statement & Investment Policy Review

Matthew Trebilcock and Nigel Gabb provided an update on the review and development of the Fund's Investment Strategy Statement (ISS) and Investment Policy. The committee was asked to note the revised timetable for finalising these documents, extended to December 2026, to align with the expected publication of statutory guidance. A draft ISS was presented for information, reflecting initial outputs from an investment beliefs workshop. The process included further review by the Pension Board in July 2026, consultation with stakeholders in Autumn 2026, and final approval by the Committee in December 2026. The report also summarised the findings of the Responsible Investment Member Survey, which indicated strong support for responsible and sustainable investment, with a preference for stewardship over divestment and climate change as the primary priority.

Gloucestershire Pension Fund Funding & Investment Performance Benchmarking

Matthew Trebilcock presented findings from the 2025 actuarial valuation, confirming a strong funding position with a funding level of 152% and a surplus of £1.2 billion. The Fund ranked highly compared to its peers. Employer contribution rates had decreased significantly to an average of 19.3% of pay. The report noted that the improvement was driven by higher assumed future investment returns and positive investment performance over the inter-valuation period. The analysis indicated that the Fund's funding strategy met regulatory requirements for solvency and long-term cost efficiency. A provisional summary of investment performance relative to the LGPS universe average showed outperformance across all reported periods, particularly over the three-year period.

The meeting also included discussions on the Gloucestershire Pension Fund Business Plan 2026/27, the 2025 Triennial Valuation, Cashflow Monitoring, and the exclusion of the press and public for certain agenda items. Exempt minutes and further business updates were also discussed.