The Investment and Pension Fund Committee of Devon Council met on Friday 26 June 2026, approving the Pension Fund Budget for the upcoming year and the draft Training Strategy. The committee also agreed to request that the issue of divestment from companies in countries judged guilty of genocide be placed on the agenda for the Partner Fund Strategic Forum.

Pension Fund Budget Approved

The committee approved the Pension Fund Budget for 2026/27, as detailed in Appendix 1 of the Investment Management Report¹. This budget outlines the projected income and expenditure for the fund, including contributions, benefit payments, administrative costs, and investment management expenses. The report noted that employer contributions were higher than budgeted due to higher than anticipated pensionable pay, and income from transfers into the fund was also significantly higher than forecast due to efforts to clear inter-fund transfers. Benefit payments were also higher than budgeted, primarily due to an increase in lump sum payments, which are difficult to forecast accurately.

Training Strategy and Mandatory Training Approved

The committee approved the draft Training Strategy for 2026/27 and acknowledged the mandatory training requirements for members of the Pension Board and the Investment and Pension Fund Committee. The new regulations, which came into force on 30 June 2026, require these members to be conversant with LGPS rules, fund policies, and pension law. The strategy outlines a focus on the CIPFA/Scheme Advisory Board Knowledge and Skills framework, with mandatory training including the completion of Barnet Waddingham's Enlighten online training videos. The strategy also details plans for ongoing training, induction for new members, and specific briefings on topics such as investment pooling with Local Pension Partnership Investments (LPPI), potential new investment opportunities, responsible investment, and regulatory changes.

Divestment from Countries Judged Guilty of Genocide to be Discussed at Strategic Forum

A Notice of Motion submitted by Councillor Gent, proposing divestment from companies based in countries judged guilty of genocide by the International Court of Justice (ICJ), was considered. The committee resolved not to make a recommendation back to the Council at this time. Instead, they requested officers to ask LPPI to place the issue on the agenda for the Partner Fund Strategic Forum for discussion. The report accompanying the motion noted that the ICJ is currently handling cases against Israel, Myanmar, and Russia, but has not yet issued final judgments in these cases. The motion specified that divestment would be limited to companies based in countries where a government has been judged guilty of genocide, aiming to avoid the complexities of companies operating in or assisting such regimes. The report also highlighted that a significant proportion of fund members, in a survey, expressed strong negative views on investments in companies violating international criminal law.

Investment Strategy Statement Review

The committee approved the approach to revising the Investment Strategy Statement as set out in the report. This review is part of the requirement under new LGPS Investment Regulations to implement the Government's Fit for the Future agenda, with a revised Investment Strategy Statement to be in place by 31 March 2027. The revised statement will be structured around prescribed themes including the roles of the administering authority and asset pool, target return, risk appetite, funding level, contribution stability, strategic asset allocation, responsible investment objectives, and local investment objectives. A consultation process with scheme employers and members is planned for October to November 2026.

Climate Change and Carbon Footprint

The committee noted the current position against the agreed targets in the Fund's climate change policy. The report detailed the analysis of the Fund's carbon footprint as at 31 December 2025, showing a slight increase in the Weighted Average Carbon Intensity (WACI) from 133 tCO2e/mGBP in December 2024 to 146 tCO2e/mGBP in December 2025. Despite this small increase, the figure represents a 65.5% reduction from the baseline position in March 2019. The report also highlighted that the target to invest 5% of the total Fund in renewable energy infrastructure by 2025 had been met, with £338 million invested, representing approximately 5% of the total Fund value. The transition to the LPPI pool was noted as a factor requiring engagement to ensure continued progress on climate targets.

Investment Management Report

The committee received the Investment Management Report, which provided an overview of the Fund's value and asset allocation as at 31 March 2026. The total Fund value stood at £6,727.7 million, with an annual investment return of 9.9%. The report detailed the geographical split of the Fund's equity allocations, noting a lower allocation to North America and developed Asia/Pacific compared to the MSCI All Country World Index (ACWI), and a higher allocation to the UK, Europe, and Emerging Markets. The report also noted that active equity portfolios were the main reason for underperformance against benchmarks during 2025/26, with underweights to oil, defence, and material companies being significant factors. The funding level as at 31 March 2026 was estimated at 102.9%, an increase from the 2025 Triennial Valuation of 100.1%, largely due to positive investment returns.

Investment Pooling Update

The committee noted the establishment of governance arrangements for the Devon Pension Fund's participation in the LPPI pool and the transition of assets to LPPI's management. The initial transition of assets from Brunel was completed in early April, with costs of £1.46 million incurred for the Emerging Markets transition. The report outlined the process for transitioning ACS funds, listed market funds, and private market funds. The wind-down of Brunel is underway, with staff transitioning to LPPI or LGPS Central, and a phased redundancy programme in progress. The committee was informed that a revised Investment Strategy Statement will be required by 31 March 2027, with a consultation process planned for later in the year.

Peninsula Pensions Administration Update and Performance Statistics

The committee noted the Peninsula Pensions performance report for the quarter ending 31 March 2026. Overall performance against statutory disclosure regulations was 95%, with 94% for high priority procedures. The team continued to focus on processing deferred benefit and amalgamation cases in preparation for the Pension Dashboard, as well as historical rectification calculations related to the McCloud Age Discrimination ruling. The report highlighted an increase in work volumes over the last 12 months compared to the previous year, reflecting more efficient capturing of all work types. The McCloud remedy work was progressing, with 322 outstanding cases, primarily awaiting information from third parties.

Peninsula Pensions Employer Performance Report

The committee reviewed and noted the employer performance information, which details the controls and procedures for monitoring the timely receipt of administration data from employers. The report provided information on 'starter' and 'leaver' notifications received from Devon Fund Employers for the period 1 January to 31 March 2026, including the timeliness of receipt. Peninsula Pensions is working with several employers to improve data delivery, and charges have been made to three employers totalling £350 for outstanding data. Reports are also being issued to employers outlining outstanding data requirements and reinforcing the consequences of non-compliance.