The Local Pension Board of Hertfordshire Council met on Thursday 16 July 2026 to review the Pension Fund's risk register, discuss governance developments, and receive updates on investment performance and the draft audit plan. Key decisions included noting the Pension Fund Risk Register, which identified three risks exceeding tolerance thresholds, and approving the proposed governance work programme.

Pension Fund Risk Register Report

Alison Sharp, Pension Governance Manager, presented the Pension Fund Risk Register for January to March 2026. Three risks were identified as exceeding their tolerated thresholds: Risk A1 (ineffective management of the fund), Risk A2 (skills or knowledge gaps at the administering authority), and Risk C5 (ineffective investment decision-making). Risks A1 and A2 were attributed to the retirement of the Head of Pensions and ongoing recruitment for the Governance Manager position, as well as uncertainty surrounding the Fit for the Future framework. Risk C5 was linked to the move to a new asset pool. While risk levels for A1 and A2 have reduced, they remain above tolerance due to ongoing recruitment and the Fit for the Future framework. The Board noted the contents of the report.

Employer Risk

Alison Sharp also presented the employer risk report for January to March 2026, which highlighted an increase in risks in the red category 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 through a debt-spreading agreement, and four historical employers with no indemnity arrangements. Three risks related to employers who were late in providing LG221 contribution forms or late in paying contributions. Fines have been issued in line with the fund's administration strategy. The Board noted the paper.

Governance

Taryn Olmberg, Head of Pensions, introduced a new report on key governance developments affecting the Hertfordshire Pension Fund. This report detailed regulatory updates, including changes to LGPS access and fairness, such as the equalisation of survivor benefits and the removal of the age 75 limit for death grants. It also covered the Fit for the Future governance requirements, with regulations coming into force on 30 June 2026. An appendix outlined a governance work programme running to 2029, a committee and board forward plan, and a schedule of policy and strategy reviews. The report indicated 72% compliance with the General Code of Practice, with five areas remaining under assessment. The Board noted the paper, with Matthew Bunyon raising a question about resourcing, to which Taryn Olmberg responded that the team was currently two members down but recruitment was underway.

Hertfordshire LGPS and FPS Q4 2025/26 LPPA Performance Report

Chris from Local Pensions Partnership Administration (LPPA) provided an update on performance and projects. Casework performance remained high, exceeding service level targets at 98.8% for the year. However, there was a slight drop in employer retirement notifications with minimum 30 days' notice in Q4, down to 45%. Contact centre average wait times were generally within targets, though March saw an average over four minutes due to concentrated demand. Customer satisfaction scores remained consistent at around 90%. Chris highlighted the unprecedented level of regulatory change impacting LGPS, including projects on access and fairness, elected members joining LGPS, scape factor changes, McLeod, and the Pensions Dashboard. He confirmed that McLeod focus is on including underpin information on annual benefit statements, with statements on track for issue by 31 August. The Pensions Dashboard is expected to go live to consumers in summer 2027. The Board noted the report.

Training Update

Taryn Olmberg provided an update on training undertaken by committee and board members in 2025-26, the results of the knowledge and understanding assessment, and the proposed training programme for 2026-27. The report highlighted the increasing statutory knowledge and understanding requirements arising from the Fit for the Future governance reforms, which will extend to pensions committee members and officers. The fund aims to demonstrate compliance through training records and assessments. The training plan for 2026-27 is themed around statutory requirements, fund business planning, and emerging issues. The Board noted the paper, with members acknowledging the positive engagement with training and the value of the assessment in shaping future programmes. Adam Morley inquired about adding external training to individual programmes, which Taryn Olmberg confirmed was possible if relevant.

Draft Audit Plan

Robert Winterton, Finance Manager, introduced Sudanshu Dadhich, Audit Engagement Manager from KPMG LLP, who presented the draft audit plan for the year ended 31 March 2026. The plan outlined the audit approach, materiality levels, and key audit risks, including management override of controls, completeness and accuracy of investments, valuation of investments, and the actuarial position of the fund. The planned audit fieldwork was scheduled to be completed by October 2026. Matthew Bunyon raised a question regarding the impact of shifting local authority account sign-off deadlines, and Sudanshu Dadhich confirmed that KPMG would adapt to meet the September deadline. The Board noted the draft audit plan.

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, one from a Pension Board member and one from an employer, with no changes proposed. The ISS was approved by the Pensions Committee on 10 July. An updated ISS, based on the 2026 regulations, is planned for presentation to the Pensions Committee in September and the Pension Board in October, following a training session and consultation. The Board noted the report.

Investment Performance and Funding Update Report as at 31 March 2026

Robert Winterton presented an update on investment performance and the fund's funding position. The estimated funding position as at 31 March 2026 was 115.9%, an increase from 112.2% in March 2025. Robbie Mercer LLC provided an overview of investment performance, noting that while absolute returns were strong (10.5% over one year), relative performance against the benchmark was behind over most periods. This was attributed to active management underperformance. The report also detailed manager performance, highlighting Bailey Gifford as a standout for the quarter due to its concentrated portfolio. The Board noted the report.

Dates of Future Meetings

The Board noted the dates of future meetings for the remainder of the year. Elaine Manzi clarified that informal meetings were primarily for training and investor meetings, with any matters requiring public discussion being moved to formal meetings.

Other Business

There was no other business raised.

The meeting then moved into Part II, with the press and public excluded.