The Pension Fund Committee of Lancashire County Council is scheduled to convene on Friday, 19 June 2026. The meeting's agenda includes a review of the committee's constitution and terms of reference, alongside discussions on the Lancashire County Pension Fund's budget, audit plan, and governance matters. Further topics for consideration encompass responsible investment, the investment strategy statement, and pension administration performance updates.

Constitution, Membership and Terms of Reference of the Committee

The committee is set to review its constitution, membership, and revised Terms of Reference, which were approved by Full Council on 21 May 2026. This includes the appointment of County Councillor J Tetlow as Chair and County Councillor Mrs M Atkinson as Deputy Chair. The report details the allocation of seats to different political groups and nominations for co-opted members representing various organisations, including Blackburn with Darwen Borough Council, Blackpool Council, City and Borough Councils, Trade Unions, and Further/Higher Education Institutions. Amendments to the committee's Terms of Reference include the deletion of specific matters reserved under the Lancashire Local Pension Partnership Ltd Shareholder Agreement, consolidating these into a new Pensions Shareholder Governance Committee. The role of Independent Investment Advisers and an Independent Person is also being redefined.

Pensions Shareholder Governance Committee

This item will update the committee on the establishment of a new Pension Shareholder Governance Committee, approved by Full Council on 21 May 2026. This new committee will handle shareholder decision-making functions for any pensions-related companies, consolidating responsibilities previously held by the Employment Committee and the Pension Fund Committee. The report outlines the committee's purpose, composition, and terms of reference, which include decisions on dividend policy, strategic plans, and governance frameworks for companies like Local Pensions Partnership Ltd (LPPL) and Local Pensions Partnership Investments Ltd (LPPI). An informal Pensions Company Directors Panel will also provide additional governance support.

Lancashire County Pension Fund 2025/26 Budget and Outturn

The committee will consider the final outturn position of the Fund's budget for the financial year ending 31 March 2026. The report indicates that actual expenditure exceeded income by £82.3m, which was an improvement on the anticipated deficit of £101.4m. This deficit was offset by a growth in the Fund's assets, resulting in a net increase of £297.5m in assets under management compared to the previous year. The report details variances in income from contributions and transfers, as well as investment income, and expenditure on benefits, transfers out, and administrative and investment management expenses.

Lancashire County Pension Fund External Audit Plan 2025/26

This report outlines the external audit plan for the financial year 1 April 2025 to 31 March 2026, conducted by Grant Thornton. The audit aims to provide an opinion on whether the financial statements present a true and fair view of the Fund's financial position and performance. The plan details the audit approach, materiality levels, significant risks identified (including management override of controls, valuation of Level 3 investments, and valuation of directly held properties), and the planned audit procedures. The audit is scheduled to take place between July and September 2026.

Lancashire County Pension Fund - Governance Matters

This report provides an update on risk management and governance issues relating to the Lancashire County Pension Fund since the March 2026 meeting. It covers the implications of the Pension Schemes Act 2026, which introduces strengthened governance requirements from 30 June 2026, and outlines the Fund's current position regarding these requirements, including the appointment of a Senior LGPS Officer and an Independent Person. The report also details breaches recorded over the past year and discusses the ongoing review of the Fund's risk register, with a focus on investment strategy, funding, geopolitical risks, and a new risk related to Local Government Reorganisation.

Pension Related Training and Revised Training Plan 2026/27

The committee will review training undertaken by its members since March 2026 and consider the revised Training Plan for 2026/27. The plan aims to ensure members have sufficient knowledge and understanding to fulfil their roles, particularly in light of strengthened requirements coming into effect on 30 June 2026. The updated plan includes additional investment-related training sessions and outlines online learning modules, bespoke workshops, and external training opportunities. The report also details the progress of members in completing LGPS Online Learning Academy (LOLA) modules and the upcoming Annual Knowledge Assessment.

Appointment of the Independent Person for Lancashire County Pension Fund

This report summarises the procurement process for appointing an Independent Person for the Fund, a role mandated by new regulations arising from the Fit for the Future reforms. A Procurement Panel, comprising the Head of Fund, Chair and Deputy Chair of the Committee, and a co-opted member, conducted interviews with shortlisted candidates. The report recommends the appointment of Ms Marian George, who currently serves as an Independent Investment Advisor to the Fund, for a three-year term commencing 1 July 2026. Ms George has extensive experience in pensions, investments, and governance.

Responsible Investments Report

This report focuses on the responsible investment aspects of the Fund's activities, detailing the work undertaken by its pooling partner, Local Pensions Partnership Investments Limited (LPPI). Appendix A provides a dashboard summary for January to March 2026, outlining LPPI's engagement on climate transition, governance, and policy developments. Key takeaways include an increase in green exposure within the portfolio and continued stewardship activity, including voting against management on issues of board independence and diversity. The report also references the Pension Schemes Act 2026 and upcoming guidance on Investment Strategy Statements.

Investment Strategy Statement - Investment Beliefs

The committee is asked to consider and comment on a review of the Fund's Investment Strategy Statement (ISS), including proposed revisions to its underpinning investment beliefs. The ISS is required to be reviewed every three years, with the current one last updated in June 2023. New LGPS regulations are due to come into force at the end of June 2026, which may influence the content of the ISS. The report highlights the Fund's strong financial position following the 2025 actuarial valuation and outlines a review process that includes training sessions for committee members on topics such as investment objectives, local investments, and strategic asset allocation. The proposed revisions to the investment beliefs aim to clarify wording, emphasise the long-term nature of the Fund, and introduce a new belief related to local investments.

Pension Administration Performance Update

This report provides an update on pension administration services delivered by Local Pensions Partnership Administration Ltd (LPPA) for the period January to March 2026 (Quarter 4). The report indicates that LPPA exceeded its Service Level Agreement (SLA) target of 95%, achieving 99.2% overall performance. However, additional metrics highlight challenges in ensuring first pension payments are made within 30 days of retirement, partly due to employer notification timeliness and the complexity of processing payments for members with Additional Voluntary Contributions (AVCs). The report also covers performance against regulatory disclosure requirements, complaint statistics, customer satisfaction scores, and project updates on the McCloud Remedy and Pensions Dashboard.

Urgent Business

Under this heading, any item of urgent business may be considered if the Chair deems it necessary due to special circumstances.

Date of Next Meeting

The next meeting of the Pension Fund Committee is scheduled for 18 September 2026.

Exclusion of Press and Public

The committee will consider whether to exclude the press and public from the meeting during the consideration of specific items where exempt information is likely to be disclosed, in accordance with Section 100A(4) of the Local Government Act, 1972.

Part II (Not open to Press and Public)

This section of the agenda includes items that will be discussed with the press and public excluded. These are the Investment Performance Report and the Investment Panel Update.