The Pension Fund Committee and Pension Board of Scottish Borders Council met on Thursday 18 June 2026 to review the Fund's financial performance, governance, and future strategy. Key decisions included approving the draft annual report and accounts for 2025/26 for external audit, and endorsing a vision statement for collaboration across Scottish LGPS funds. The committee also noted the positive financial outturn for 2025/26, with an underspend of £309,000.

Internal Audit Annual Assurance Report 2025/26

Jill Murray, Chief Officer Audit & Risk, presented the Internal Audit Annual Assurance Report for the SBC Pension Fund for 2025/26. The report concluded that the systems of governance, risk management, and internal control operating within the Fund during the year were appropriate and effective, with improvements demonstrated during the year. The committee acknowledged the assurances provided in the report and the breadth of work undertaken by the internal audit function. A minor recommendation was made to enhance transparency regarding ESG evaluations within investment performance reports, suggesting an executive summary be included in public sessions.

Pension Fund Risk Register Update

Jill Murray also provided an update on the Pension Fund Risk Register, focusing on the Administration category of risks. The report detailed reviews of several risks, including Over-Reliance on Key Officers, Failure to process Payments on time, and Cyber Security. While most risks were assessed as Amber or Green, Cyber Security remained a critical risk with a score of 10 (Critical Impact, Unlikely Likelihood), with ongoing actions to address partially effective controls. The committee approved the review of the Administration category of risks and noted that the next update in September 2026 would cover Governance and National Policy/Regulations.

Governance Policy and Compliance Statement 2026

Jill Murray presented the revised Governance Policy and Compliance Statement for the Scottish Borders Council Pension Fund for 2026. The statement demonstrated full compliance with published best practice guidance. Minor updates were noted, including amendments to reflect the General Code compliance tracker, updated SBC Financial Regulations, and the attendance of the Independent Professional Observer. The committee approved the revised statement for inclusion in the Pension Fund Annual Report and Accounts 2025/26.

General Code of Practice Compliance Tracker

The committee received an update on the General Code of Practice Compliance Tracker, which indicated that the Scottish Borders Council Pension Fund demonstrates good governance and follows best practice guidelines. Key focus areas completed in Q1 2026 were noted, and outstanding actions related to Business Continuity Plan, Data Readiness and Information Asset Review, and Cyber Security Policy – Incident Response Plan were highlighted, with completion dates set for June and September 2026. The committee approved the General Code Compliance Actions to 31 March 2026.

Business Plan 2026/27 - 2028/29

Jill Murray presented the draft Pension Fund Business Plan for 2026/27 to 2028/29. The plan outlines actions to support the aims and objectives of the Fund over the next three years. The committee noted the completed actions for 2025/26 and approved the draft Business Plan for 2026/27 to 2028/29.

Pensions Administration Performance 2025/26

Ian Angus, HR Shared Services Manager, presented the Pensions Administration Performance for 2025/26. The report highlighted that all pension payments and lump sums were made on time, and annual benefit statements were issued ahead of statutory deadlines. The team successfully completed the connection to the Pensions Dashboard Ecosystem and implemented a new Member Self-Service system, all without additional resources. The committee noted the performance and approved its inclusion in the Pension Fund Annual Report and Accounts 2025/26.

Attendance 2025/26 and Training Plan 2026/27

Jill Murray presented the report on attendance and the training plan for 2026/27. It was noted that all members of the Pension Fund Committee and Pension Board had met the training and meeting attendance requirements for 2025/26. The proposed training for 2026/27 will focus on Financial Markets and Products Knowledge, Actuarial Valuations, Pension Administration, and Responsible Investments. The committee approved the training areas for focus for 2026/27.

Pension Fund Budget Outturn to 31 March 2026

Jill Murray reported on the Pension Fund Budget Outturn for 2025/26, showing a total expenditure of £8.783m against a budget of £9.092m, resulting in an underspend of £309,000. The underspend was primarily attributed to reduced investment management fees. The committee noted the actual expenditure and the cash flow position.

Draft Annual Report and Accounts 2025/26

Jill Murray presented the draft Annual Report and Accounts for the Pension Fund for 2025/26. Key highlights included a positive absolute return of 5.7% on investments, with the Fund's value reaching £1 billion for the first time. The committee noted the draft report and accounts and approved their submission for review by the external auditors, Audit Scotland.

Information Update

Jill Murray and Ian Angus provided an information update. This included positive feedback on the Independent Professional Observer, an overview of responsible investment activities, and notification of changes to the Pension Board and Investment Sub-Committee membership. Updates were also provided on the Scheme Advisory Board working group and the launch of a National LGPS Procurement Framework.

Local Government Pension Scheme (LGPS) Vision Statement

Jill Murray presented a report seeking approval for the Scottish Borders Council Pension Fund to collaborate with other Scottish LGPS Funds on a vision statement. The statement outlines a shared ambition for investment pooling, sharing expertise, improving efficiency, and delivering enhanced value. The committee approved the Fund's collaboration to progress the vision statement and the engagement of officers to develop a detailed Memorandum of Understanding (MoU).

The meeting concluded with the move to private business.