The Pensions and Investments Committee of Derbyshire Council met on Wednesday 03 June 2026 to discuss the Derbyshire Pension Fund's investment performance, actuarial valuation, and administration. The committee was also scheduled to review the Fund's risk register, climate risk management report, and plans for implementing the 'Fit for the Future' reforms for the Local Government Pension Scheme (LGPS).

Investment Report

The committee was scheduled to review the Derbyshire Pension Fund's investment performance. The report pack detailed the Fund's asset allocation, investment activity since the previous meeting, and long-term performance analysis. It also sought approval for the investment strategy, incorporating recommendations from the Director of Finance and an independent external adviser, Mr. Fletcher. The report included a comprehensive table outlining the recommended practical asset allocation across various asset classes, such as UK equities, global sustainable equities, private equity, and bonds. Market returns over the preceding twelve months were analysed, with particular attention paid to global equity performance in sterling and US dollar terms, and UK fixed income returns. The report also provided a longer-term performance analysis, noting that while the Fund performed in line with its benchmark over ten years, it had underperformed on one, three, and five-year bases. Specific reasons for underperformance in Global Sustainable Equities and Private Equity were detailed. The report recommended adjustments to category weightings, aiming to reduce exposure to growth assets and increase exposure to income and protection assets, while also maintaining a defensive cash allocation.

Derbyshire Pension Fund Actuarial Valuation

A key item on the agenda was the Derbyshire Pension Fund's Actuarial Valuation as at 31 March 2025. This triennial exercise determines the Fund's liabilities compared to its assets and the contributions needed to cover future benefits. The report indicated a significant improvement in the Fund's funding position since the previous valuation in 2022, with the funding level increasing from 100% to 135%, resulting in a larger surplus. The report detailed the combined employer contribution rates, noting an average reduction compared to the previous valuation, primarily due to higher assumed future investment returns. The valuation results, including the breakdown of assets and liabilities, were presented, along with an analysis of risks and sensitivities, such as economic and demographic factors. The report also included information on climate change scenario analysis and gender pension gap reporting, as required by new regulations.

LGPS Fit for the Future Implementation

The committee was set to receive an update on changes to the governance of the Local Government Pension Scheme (LGPS) and the management of its investment assets, stemming from the Pension Schemes Act 2026 and associated regulations. This included plans for implementing the 'Fit for the Future' requirements, which mandate stronger governance and asset pooling. The report detailed the Pension Schemes Act 2026 and the Local Government Pension Scheme (Pooling, Management and Investment of Funds) Regulations 2026, which require administering authorities to delegate investment strategy implementation to their asset pool, LGPS Central Limited (LGPSC). The committee was asked to approve updated terms of reference for itself, reflecting these policy changes, and to note the proposal for the Chair to be involved in the selection process for a newly required Independent Person. The report also outlined the Fund's investment management arrangements, with a significant portion of assets now managed through LGPSC vehicles, and provided an update on the expansion of the LGPS Central Pool to include additional partner funds.

Half Year Pension Administration Performance Report

This report covered the period from 1 October 2025 to 31 March 2026, detailing the pension administration activities undertaken by the Derbyshire Pension Fund team and their performance levels. The report highlighted the team's primary role in accurately calculating and paying pension benefits, managing transfers, and providing information to members. It noted a high level of vacancies within the administration team, largely due to internal promotions and staff resignations, and outlined ongoing recruitment and training efforts. The report detailed workload data, including casework turnaround times against key performance targets, with achievements of 99% compliance in five out of seven indicators. However, it also noted an increase in backlog cases for aggregations and deferred membership, with a dedicated backlog team being established to address these. The report also provided updates on collaborations with other LGPS funds and industry groups, including the East Midlands Pension Officers' Group and the LGPS Joint Communications Group.

Risk Register

The committee was scheduled to consider the Derbyshire Pension Fund's Risk Register. This document identifies key risks, describes their potential impact, and assigns impact and probability scores to determine an overall risk score. The register outlines current mitigation controls and procedures, as well as proposed further actions. High-risk items identified included systems failure/cybercrime attack, underperformance of investment returns from LGPS Central Limited, insufficient cyber-liability insurance, and the administrative impact of the McCloud judgement. The report detailed the existing controls and proposed further actions for these high-risk items, including regular reviews of security arrangements, ongoing monitoring of LGPS Central's performance, and continued efforts to manage the administrative challenges posed by the McCloud remedy.

Climate Risk Management Report

This report presented the Derbyshire Pension Fund's public Climate Risk Management Report, prepared by LGPS Central Limited. The report analysed the Fund's approach to climate-related risks and opportunities, structured around the four pillars of the Task Force on Climate-Related Financial Disclosures (TCFD): Governance, Strategy, Risk Management, and Metrics & Targets. The report detailed the Fund's carbon risk metrics for listed equities, fixed income, and private market funds, including Scope 1, 2, and 3 emissions, Weighted Average Carbon Intensity (WACI), and fossil fuel exposure. It also outlined the Fund's updated Climate Strategy targets, aiming for net zero carbon emissions by 2050, and provided progress updates against these targets. The report noted the challenges in data availability and consistency for certain asset classes and highlighted the Fund's engagement activities with investee companies through various stewardship partners.

Exclusion of the Public and Confidential Appendix

The agenda indicated that the public would be excluded from the meeting for item 10, Exclusion of the Public, and item 11, Climate Risk Management Report Confidential Appendix. This was to allow for the disclosure of exempt information, as defined by the Local Government Act 1972, where the public interest in maintaining the exemption outweighed the public interest in disclosure.

Local Government Pension Scheme Investment Pooling

This item was scheduled to provide an update on the Derbyshire Pension Fund's involvement in investment pooling. The report likely detailed the ongoing development of the LGPS Central Pool, including any updates to governance documents such as the Inter Authority Agreement and Shareholders' Agreement. It would also have covered the new Fiduciary Management Agreement and the expansion of the Pool to include additional partner funds. The report was expected to address how the Fund's assets are being transitioned into LGPS Central's products and the ongoing oversight of the pooling company's performance and effectiveness.

Summary of AADPs and Ombudsman Escalations During 2025/26

This report was scheduled to provide a summary of applications for adjudication of disagreements (AADPs) and any cases escalated to The Pensions Ombudsman during the period 2025/26. This would likely include details of complaints made by scheme members against the Fund or employers, the outcomes of any Stage 1 and Stage 2 appeals, and any cases referred to The Pensions Ombudsman. The report would aim to provide an overview of the types of disputes arising and the effectiveness of the Fund's complaints and appeals procedures.