The Pensions and Investments Committee of Derbyshire Council met on Wednesday, 2 September 2026, to discuss the fund's investments, stewardship activities, and the implications of local government reorganisation. Key decisions included approving the investment strategy, noting updates on the Local Government Pension Scheme (LGPS), and approving changes to the governance arrangements for the LGPS Central Pool. However, a recommendation to continue membership of the Local Authority Pension Fund Forum was not carried.

Investments Report

The committee received a report reviewing the fund's asset allocation, investment activity, and long-term performance analysis. Anthony Fletcher, the independent external adviser, provided his assessment. The committee resolved to note Mr. Fletcher's report, the asset allocations, total assets, and long-term performance analysis, and to approve the combined recommendations outlined in the report. This approval signifies a decision on the fund's investment strategy for the upcoming period.

Stewardship Report

Neil Smith, Investments Manager, presented a report on the stewardship activities undertaken by LGPS Central Limited (LGPSC), the fund's pooling company. The committee resolved to note these activities, indicating an acceptance of the progress and approach outlined by LGPSC in managing the fund's investments responsibly.

Local Government Reorganisation

Dawn Kinley, Head of Pension Fund, introduced a report detailing the implications of Local Government Reorganisation (LGR) for the Derbyshire Pension Fund. The report outlined the proposed changes, which will result in the abolition of the existing county, city, district, and borough councils in Derbyshire and the creation of two new unitary authorities. This reorganisation necessitates a new administering authority for the Pension Fund from 1 April 2028.

The committee resolved to note the administering authority options that had been considered for the Pension Fund from 1 April 2028. These options included splitting the role between the two new unitary authorities (deemed not viable), designating one of the new unitary authorities as the administering authority, designating the East Midlands Combined County Authority (EMCCA), or creating a new Single Purpose Pensions Authority (SPPA). The committee also noted the intention to develop a more detailed appraisal of two specific options: designating the role to one of the new unitary authorities, or creating a new SPPA. This indicates a decision to further investigate these two pathways for the future administration of the pension fund.

Local Government Pension Scheme Update

Steve Webster, Pension Services Manager – Employers, presented an overview of recent developments impacting the administration and governance of the Local Government Pension Scheme (LGPS). The report covered several key areas:

• LGPS Fit for the Future – Fund Governance: Statutory guidance was published on 29 June 2026, detailing requirements for enhanced knowledge for pension committee members, the appointment of an LGPS Senior Officer and an Independent Person, and mandatory Independent Governance Reviews. An update on the fund's implementation progress will be provided at the next meeting.
• Actuarial Valuation and Funding Strategy Statement: The 2025 actuarial valuation, completed by Hymans Robertson LLP as of 31 March 2025, was reported. The valuation showed an improved overall funding level of 122% (up from 107% in 2022) and a decrease in the average employer contribution rate to 16.5% of payroll. The next valuation is scheduled for 31 March 2028.
• LGPS Scheme Advisory Board Annual Review: The 2025/26 Annual Review was published in February 2026, summarising the Board's activities and outlining priorities for 2026, including embedding Fit for the Future reforms and increased engagement with pension committees.
• LGPS Scheme Annual Report 2025: Published in May 2026, this report provides aggregated data on the LGPS, showing 6.81 million members, 15,704 participating employers, and £402 billion in total assets as of the end of the 2024-25 financial year.
• LGPS Access and Fairness Changes: Regulations effective from 1 April 2026 implement government reforms to improve equality and fairness in scheme benefits. Key changes include the equalisation of survivor benefits, changes to cohabiting partner benefits, death grant reforms, and measures to address the gender pension gap. The fund has issued guidance to employers and is reviewing historic cases.
• LGPS Access and Protections – Elected Members: Regulations effective from 11 May 2026 restore and extend LGPS access for elected members, including councillors and mayors, with the aim of increasing access to public service pensions and supporting recruitment.
• Pensions Dashboards Update: The Pensions Dashboards Programme is progressing, with LGPS funds required to connect by 31 October 2026. The focus remains on data quality, member matching, and accurate pension values.
• McCloud Update: Work continues on implementing the McCloud remedy, which addresses age discrimination in public service pensions. This involves identifying affected members, recalculating benefits, and updating records.
• Inheritance Tax: Reforms from April 2027 will bring most unused pension funds and death benefits within the scope of inheritance tax, with specific exemptions for surviving spouses or civil partners. The fund is monitoring further guidance.
• Adjustment to the SCAPE rate: An increase in the SCAPE discount rate from CPI + 1.7% to CPI + 2.0% was announced on 19 May 2026. This has triggered a review and reissue of LGPS actuarial factors, impacting various member calculations. The fund has updated its administration system to reflect these revised factors.

The committee resolved to note these updates, acknowledging their impact on the administration and governance of the LGPS.

Local Authority Pension Fund Forum Membership

Dawn Kinley, Head of Pension Fund, presented a report on the Derbyshire Pension Fund's membership of the Local Authority Pension Fund Forum (LAPFF). The LAPFF aims to promote high standards of corporate governance to protect the long-term value of local authority pension funds.

During the discussion, the Chair expressed his disagreement with the recommendation to continue membership, citing reasons of duplication of work with LGPS Central Limited and underlying investment managers, the commitment of officer and committee time in light of local government reorganisation and pooling arrangements, and reputational risk from collective positions.

The recommendation to approve continued membership was put to a vote and was not carried. Councillors Care, Ashby, Monkman, and Hobson voted in favour of the recommendation.

LGPS Central Pool Governance Arrangements

Neil Smith, Investments Manager, introduced a report on changes to the governance arrangements of the LGPS Central Pool and sought approval for changes to the Derbyshire Pension Fund's representation within these arrangements.

The committee resolved to:

• Note the changes to the governance arrangements of the LGPS Central Pool.
• Approve the appointment of the Chair of the Pensions and Investments Committee, or their nominee, as the Council's representative on the LGPS Central Pool's Oversight Board.
• Approve the appointment of the Pension Fund's LGPS Senior Officer, once in position, to represent the Council's shareholding in LGPS Central Limited, with delegated authority to make decisions and vote on shareholder matters.
• Approve the appointment of the Fund's Investments Manager and/or their nominee to represent the Pension Fund on the LGPS Central Pool's Client Forum.
• Note that the LGPS Senior Officer, once in position, will determine attendance at meetings of the Partner Fund Officer Group.

These resolutions ensure the Pension Fund is appropriately represented within the evolving governance structure of the LGPS Central Pool.

Exclusion of the Public and Exempt Minutes

The committee moved to exclude the public from the meeting for the discussion of exempt minutes, as per Section 100(a)(4) of the Local Government Act 1972. The exempt minutes of the meeting held on 3 June 2026 were then resolved to be approved as a correct record.