The Local Government Pension Scheme Local Pension Board of Hertfordshire Council met on Thursday 16 July 2026 to review the fund's risk register, governance, and investment performance. Key discussions included updates on employer risks, the implementation of new regulatory requirements, and the financial health of the pension fund.

Pension Fund Risk Register Report

The Board reviewed the Hertfordshire Local Government Pension Scheme (LGPS) Risk Register for the period January to March 2026. Three risks were identified as exceeding the tolerated risk threshold: ineffective management and governance of the fund, skills or knowledge gaps at the administering authority, and ineffective investment decision-making. The retirement of the Head of Pensions and ongoing recruitment for a Governance Manager contributed to the first two risks remaining above tolerance levels. The move to a new asset pool also kept the investment decision-making risk above the threshold.

Employer Risk

The Board received an update on employer risks for the period January to March 2026. The number of employers categorised as 'red' risk increased from seven to nine. Of these, eight were considered 'true red risks'. These included one ceased employer with an outstanding deficit, which is now being managed under a debt spreading agreement, four historical employers with no indemnity arrangements, and three employers who were late in providing contribution forms or paying contributions. The report also detailed updates to risk monitoring intended for implementation from April 2026, including changes to how deficit recovery and outstanding admission agreements are monitored.

Governance

Taryn Ahlberg, Head of Pensions, presented an update on key governance developments affecting the Hertfordshire Pension Fund. This included regulatory updates on LGPS Access and Fairness, which introduced changes such as the equalisation of survivor benefits and improvements to buy-back arrangements for unpaid leave. Elected members are now also able to join the LGPS from May 2026. The report also covered the 'Fit for the Future' governance requirements, with regulations coming into force on 30 June 2026. A governance work programme running to 2029 was outlined, alongside a forward plan for committee and board meetings and a schedule of policy and strategy reviews. The report noted that the fund was 72% compliant with the General Code of Practice, with five areas remaining under assessment.

Hertfordshire LGPS and FPS Q4 2025/26 LPPA Performance Report

Chris from LPPA provided an update on performance for the fourth quarter of 2025/26. Casework performance remained strong, hitting service level targets at 98.8% for the quarter. While there was a slight drop in employer retirement notifications received with at least 30 days' notice, the fund was still able to pay benefits promptly. Contact centre average wait times were generally within targets, though March saw some days with higher demand. Customer satisfaction scores remained consistent at around 90%. Chris also detailed ongoing projects, including work on the McCloud Remedy, Pensions Dashboard, and the implementation of new scape factors, noting the significant operational pressures due to ongoing regulatory change.

Training Update

Taryn Ahlberg presented an update on training for committee and board members. The report highlighted the increasing importance of training and knowledge requirements within the LGPS governance framework, particularly with the 'Fit for the Future' regulations extending these requirements to pensions committee members and officers. The training plan for 2026-27 was outlined, focusing on statutory knowledge and understanding requirements, fund business planning, and current and emerging issues. The results of a recent knowledge and understanding assessment were also discussed, showing board members scoring well, particularly in funding.

Draft Audit Plan

Robert Winterton, Finance Manager, introduced the draft audit plan prepared by KPMG LLP, the fund's external auditors. Sudhanshu Dadej from KPMG presented the plan, outlining the audit approach for the financial year ending 31 March 2026. Key audit risks identified included management override of controls, the completeness and accuracy of investments, the valuation of investments, and the actuarial position of the fund. Materiality for the audit was set at £64.2 million. The audit timetable indicated fieldwork had begun, with findings expected by October 2026.

Investment Strategy Statement

Phillip Prasad, Investment and Pooling Analyst, reported on the consultation feedback for the draft Investment Strategy Statement (ISS). Two responses were received, both supportive, with no changes proposed to the document presented in March. The report also detailed the timeline for the new updated ISS, which will be presented to the Pensions Committee in September and the Pension Board in October, following further consultation.

Investment Performance and Funding Update Report as at 31 March 2026

Robbie from Mercer presented the investment performance report for the quarter ending 31 March 2026. The fund's investments underperformed the benchmark during the quarter, returning -0.6% against a benchmark of -0.1%. However, longer-term performance showed outperformance over the ten-year period. The report also included an update on the fund's funding position, prepared by the fund's actuary, Barnett Waddingham. As at 31 March 2026, the estimated funding level was 115.9%, an increase from 112.2% at 31 March 2025, representing a surplus of £986 million.

Dates of Future Meetings

The Board noted the dates for future meetings, including informal sessions for training and discussions.

Other Part I Business

There was no other business raised for discussion in the public session.

The meeting then moved into Part II, where the press and public were excluded due to the likely disclosure of exempt information relating to financial and business affairs.