The Pension Fund Committee met on Wednesday 17 June 2026 to review the administration of the council's Local Government Pension Scheme (LGPS) function and to receive an update on the Pension Fund's investment performance up to 31 March 2026. The committee noted the content of both reports.

Administration of the Council's LGPS Function

The committee received an update on the administration of the council's Local Government Pension Scheme (LGPS) function. The report detailed the ongoing work of the pensions administration team, including business as usual activities, the migration from Member Self Service (MSS) to Engage, and the introduction of online payslips for pensioners. The team is also working on identifying members in scope for the McCloud judgement remedy and has resumed granting councillors access to the LGPS.

Key developments highlighted include:

• Engage System: The migration from MSS to Engage has been completed, with positive feedback received from members who have successfully registered. However, issues are being investigated regarding members with Hotmail or MSN email addresses.
• Online Payslips: Pensioners will now receive payslips and other documents via email, a move aligned with the council's digital programme. This was not feasible in April and May due to contract finalisation delays, but the pensions increase letter was issued alongside the April payslip, ensuring timely receipt of information and saving on postage costs.
• Discretions Policies: The council's discretions policies, which are 10 years old, are due for review in the coming months.
• McCloud Judgement: Work continues to identify members eligible for the remedy, with the team applying previous unaggregated service that had been kept separate.
• Councillor Access to LGPS: Councillors have been granted access to the LGPS again from 11 May 2026. Two members of the pensions team attended a councillors' induction to outline the benefits of the LGPS and provide information packs and option forms.
• Fit For the Future Regulations: The LGPS (Pooling, Management and Investment of Funds) Regulations 2026 and the LGPS (Amendment) Regulations 2026 come into effect from 30 June 2026. These regulations mandate participation in asset pools and impose new governance requirements, including the publication of strategies and policies, the appointment of a senior LGPS officer and an independent person, and the implementation of mandatory knowledge and understanding arrangements. A full report on these requirements will be presented at the next meeting.
• SCAPE Rates: The Minister for Pensions announced an increase in certain SCAPE discount rates. This necessitates the suspension of calculations for certain non-club transfers, aggregations, and cash equivalent values for divorce until revised rates are available.
• Pension Dashboard: Data is now being loaded automatically to the national pension dashboard daily in preparation for its go-live in October.

The report also noted that the administration team met three out of four performance targets for the quarter.

Pension Fund Quarterly Update to 31 March 2026

The committee received an update on the Pension Fund's investment performance for the quarter ending 31 March 2026. The total value of the Fund at this date was £1,160 million, a decrease of £21 million from the previous quarter.

Key findings from the report include:

• Overall Performance: The Fund underperformed its benchmark over the reporting quarter, delivering a return of -1.47% compared to the benchmark's -0.25%. Over the twelve-month period, the Fund also lagged its benchmark by -0.54%.
• Longer-Term Performance: Over three years, the Fund returned 8.30% per annum, underperforming its benchmark by 0.23% per annum. Over five years, the Fund returned 4.36%, trailing the benchmark by 1.17%. However, over the ten-year period, the Fund achieved an annual return of 6.74%, outperforming the benchmark return of 6.45% by 0.29% per annum.
• Mandate Performance: Four out of ten mandates delivered returns that met or exceeded their respective benchmarks during the quarter. Three of the Fund's five equity mandates underperformed their benchmarks. The UK equity market, represented by the FTSE All-Share benchmark, delivered a positive return of 2.41%, with the Fund achieving a slightly higher return of 2.43%. The emerging markets portfolio also performed well, delivering a return of 1.10%, ahead of its benchmark.
• Asset Allocation: The Fund's asset allocation is broadly aligned with its strategic benchmark. However, the Fund is underweight in the Real Estate Long Income Fund, Buy and Maintain Bonds, and index-linked gilts, and overweight in cash, low-carbon equities, and property. Rebalancing is not currently required.
• Market Review: Global equities declined over the first quarter of 2026, influenced by the Middle East conflict, which impacted oil supplies and trade flows, contributing to inflation concerns and a reassessment of interest rate expectations. US and European equities also fell, while the Japanese market performed strongly. The UK economy expanded modestly, and the Bank of England held interest rates. Government bond yields rose across developed markets due to geopolitical uncertainty and rising oil prices.

The report also detailed the Fund's cash balances, which stood at £8.985 million at 31 March 2026. The committee noted the financial implications of investment performance on required contributions and the legal duty to ensure value for money in pension arrangements.