The Pension Fund Committee of County Durham Council met on Thursday 11 June 2026 to review the overall value and performance of the Pension Fund's investments. The meeting also covered the audit strategy for the upcoming financial year, regulatory updates impacting the Local Government Pension Scheme (LGPS), and the Pension Fund's Service Plan for the next three years.

Overall Value of Pension Fund Investments to 31 March 2026

The committee was scheduled to receive an update on the overall value of the Pension Fund's investments as of 31 March 2026. The report indicated that the total value of the fund stood at £3.995 billion, with a cash balance of £43.013 million held in the Durham County Council Pension Fund bank account. Fund managers also held an additional £35.622 million in cash. The report detailed the movement in the cash balance during the quarter and outlined rebalancing activities undertaken between January and March 2026. Specifically, the Fund transferred holdings in two CBRE assets to Border to Coast Pensions Partnership (BCPP) to fund its initial subscription to the BCPP Global Core Real Estate Fund. A further subscription to BCPP UK Real Estate was also made in May 2026. The report included a table detailing the fund balance by fund manager and asset class as of 31 March 2026.

Performance Measurement of Pension Fund Investments to 31 March 2026

A report from Northern Trust, the Fund's custodian, was scheduled to provide an overview of the investment performance of the Pension Fund up to 31 March 2026. This report was expected to detail the fund managers' benchmarks, the total fund performance for the quarter, and performance over one, three, five, and ten years, as well as since inception. It was also intended to provide individual fund managers' performance in absolute and relative terms against their respective benchmarks.

Pension Fund Audit Strategy Memorandum (Draft) Year Ending 31 March 2026

The committee was to consider a draft Audit Strategy Memorandum for the year ending 31 March 2026. This document, prepared by Forvis Mazars LLP, outlined the planned scope and timing of the audit, identified significant and enhanced audit risks, and detailed the planned responses to these risks. It also addressed the firm's independence and proposed audit fees. Key risks identified included management override of controls and the valuation of investments within level 3 of the fair value hierarchy.

Regulatory Update

A report was scheduled to brief the committee on developments in both LGPS-specific matters and other non-LGPS specific issues of interest. Key LGPS updates included new regulations concerning member benefits, such as the equalisation of survivor benefits and updates to death grant rules. The regulations allowing councillors and mayors to opt into LGPS membership from 11 May 2026 were also to be discussed, outlining the terms and conditions of this membership. Furthermore, new governance regulations requiring the appointment of a senior officer responsible for administration, governance, and investment, along with an independent person to provide advice, were to be covered. The report also detailed changes to the LGPS (Pooling, Management and Investment of Funds) Regulations 2026, which mandate participation in a single asset pool and require appropriate Financial Conduct Authority authorisation for these pools. Non-LGPS specific matters included changes to SCAPE factors for public service pension schemes, which would impact transfer values and retirement factors, and an update on the progress of the Pensions Dashboard project, with a new connection deadline of 31 October 2026.

Local Pension Board Annual Report 2025/26

The committee was to receive an overview of the work completed by the Local Pension Board during the 2025/26 financial year. The report highlighted the Board's role in assisting the Administering Authority in securing compliance with regulations and ensuring the effective and efficient governance and administration of the LGPS. It detailed the matters considered at the Board's meetings in December 2025 and March 2026, including updates on Board membership, the Pension Fund Statement of Accounts, pension administration, regulatory updates, and the approach to responsible investment. The report also included summaries of the Fund's performance against Pension Administration Key Performance Indicators (KPIs) for 2025/26.

Pension Fund Service Plan 2026-27

The committee was presented with the Pension Fund's Service Plan for the three-year period from 2026/27 to 2028/29. The plan aimed to set out the Fund's aims, objectives, and intended actions to support sustainable service delivery and operational resilience, acknowledging external factors such as changes in the pensions and investment industry, evolving working practices, and regulatory shifts. The plan detailed key areas of focus, including administration, governance, and investment, and outlined strategic actions and service level actions for the coming years. This included the completion of LGPS pooling, implementation of 'Fit for the Future' provisions, development of local investment opportunities, and ongoing review of governance arrangements. The plan also addressed the connection to the national pensions dashboard and the review of pension administration software.

Other Scheduled Discussions

The agenda also included several items for discussion in Part B, which were considered exempt or confidential information. These included the minutes of the meeting held on 12 March 2026, reports from the Independent Adviser, the Pension Fund Adviser, and various investment managers including Alliance Bernstein, CBRE Global Investment Partners, Foresight, and LGIM. An annual review of equities and a quarterly performance report from Border to Coast Pensions Partnership were also scheduled.