The Pensions Committee of Shropshire Council is scheduled to convene on Friday, 18 September 2026, to review the financial performance and governance of the Shropshire County Pension Fund. The meeting's agenda includes a comprehensive examination of audit reports, annual accounts, and corporate governance monitoring.

Third Line of Assurance: Internal Audit Outturn Report for Shropshire County Pension Fund 2025/26

The committee is set to receive the Internal Audit Outturn Report for the Shropshire County Pension Fund for the financial year ending 31 March 2026. This report is expected to summarise the internal audit work undertaken and provide the Chief Audit Executive's year-end opinion on the fund's internal control environment. The report indicates that the fund's governance, risk management, and internal control processes are considered sound and working effectively, with a substantial year-end opinion anticipated, which is the highest possible rating. The report details that four out of five planned audits were completed within the financial year, with one audit deferred due to project delays. A total of 17 recommendations were made across the five audit reports, with one significant recommendation identified in relation to IT cyber self-assessment. Customer feedback surveys for the internal audit service have been positive, with 100% excellent or good responses across various scoring items.

External Audit: The Audit Findings for Shropshire County Pension Fund 2025/26

Grant Thornton UK LLP is scheduled to present its Audit Findings Report for the Shropshire County Pension Fund for the year ended 31 March 2026. The report is expected to confirm that the financial statements give a true and fair view and have been properly prepared in accordance with accounting codes and legislation. While the majority of audit work is complete, some outstanding matters remain, including the valuation of Level 3 investments, receipt of the final annual report and governance statement, and the management representation letter. Subject to the satisfactory completion of these points, an unqualified audit opinion is anticipated. The report also details the audit approach to materiality, setting it at £44.90m, and outlines the significant audit risks identified, including management override of controls and the valuation of Level 3 investments. A single recommendation for management has been made concerning member data movements.

Pension Fund Annual Accounts 2025/26

The committee will review the Shropshire County Pension Fund Annual Accounts for the year ending 31 March 2026. The report indicates that the fund increased in value by £169 million during the year, reaching £2.795 billion. Draft accounts were prepared to meet statutory deadlines, with some minor valuation increases noted for private equity, infrastructure, property debt, and private debt funds, which were within the materiality limit and did not necessitate amendments. Contributions from scheme employers were £1.8 million lower than the previous year, partly due to a decrease in pension strain payments. Scheme membership saw a slight decrease of 1.2%. Management expenses increased by £1.6 million, primarily due to the rise in the fund's value, as investment management fees are asset-based. The report also includes a detailed breakdown of financial performance forecasts and asset values for the next three years.

Corporate Governance Monitoring

A report on Corporate Governance Monitoring is scheduled for review, covering the period from 1 April 2026 to 30 June 2026. This report will provide updates on corporate governance changes, including the government's response to the Scheme Advisory Board's letter regarding investments in conflict zones, and a review of socially responsible investment issues. It will also detail the fund's voting and engagement activities, including reports from LGPS Central, Columbia Threadneedle Investments, and the Local Authority Pension Fund Forum (LAPFF). The report will also address the latest correspondence with the Palestine Solidarity Campaign (PSC) concerning investments in conflict areas and confirm the fund's intention to apply for continuation of its UK Stewardship Code credentials under the new 2026 framework.

Pensions Administration Monitoring

The committee will receive an update on Pensions Administration performance, team capacity, and key project delivery for the first quarter of the 2026-27 financial year. The report indicates that most Key Performance Indicator (KPI) measures met the 95% target, with targeted actions underway for those falling short. Progress on the Pension Dashboard implementation, Annual Benefit Statements, McCloud remedy work, Access and Fairness changes, employer performance, and communications activity will be summarised. The report highlights that 11 out of 14 KPIs achieved the target for completion within statutory timescales. A new process for allocating work within the Membership and Benefits team has been introduced, showing improvements in transfer task processing. The team is also considering resource needs for additional work arising from regulatory changes.

Governance Update

A Governance update report will be presented, detailing regulatory breaches recorded from 1 April 2026 to 30 June 2026, and any stage 1 or stage 2 appeals received under the Internal Dispute Resolution Procedure (IDRP). The report will also seek approval for updated fund policies, including a new Workforce Strategy. Significant governance changes stemming from the Fit for the Future legislative reforms are also to be discussed, including the appointment of an LGPS Senior Officer, an Independent Person, and the requirement for Independent Governance Reviews. The report outlines the key actions required by administering authorities to implement these changes, including updating constitutions, governance strategies, and training plans.

Pensions Administration Strategy

The committee is scheduled to review the Pensions Administration Strategy, which outlines the administration processes for the fund and its stakeholders, including policies and performance standards. This strategy is shared with employers to ensure they are aware of their responsibilities. The report also includes a Value for Money statement, comparing Shropshire's administration costs to the average of other LGPS funds, indicating that Shropshire's costs are below the average.

Workforce Strategy 2026-29

A Workforce Strategy for 2026-2029 is presented for approval. This strategy aims to ensure the Shropshire County Pension Fund has the capacity, capability, and resilience to meet its objectives, addressing challenges such as recruitment and retention of skilled staff, loss of corporate knowledge, and skills gaps due to legislative changes. It outlines priorities for implementing a workforce plan, ensuring competitive pay and grading, and enhancing learning, development, and career pathways.

LGPS England & Wales Scheme Advisory Committee (SAB) Review

Updates from the LGPS England & Wales Scheme Advisory Committee (SAB) are scheduled for discussion. This includes a statement on statutory guidance supporting the Fit for the Future reforms, explaining the roles of the Independent Person and Senior LGPS Officer. The report also summarises a report on the 2025 local fund valuation exercise, highlighting improved funding levels and reduced employer contribution rates.

Investment Strategy Statement

The committee will review the Investment Strategy Statement, which sets out the fund's investment objectives, asset allocation, and approach to social, environmental, and ethical issues. The current strategic asset allocation, agreed in June 2023, is detailed, along with a slight shift in the final quarter of 2025/26 to reduce equity allocation and invest in UK Government gilts. The report also discusses the fund's progress in meeting the Government's LGPS - Fit for the Future Requirements and its work with LGPS Central Limited on governance and investment reforms.

Climate Stewardship Plan and Climate Change Strategy

Updates on the fund's Climate Stewardship Plan and Climate Change Strategy are on the agenda. The Climate Stewardship Plan identifies specific companies and portfolio managers for stewardship activities, while the Climate Change Strategy outlines the fund's approach to addressing climate-related risks and opportunities, with a commitment to net zero by 2050. The report details engagement activities undertaken by LGPS Central, Columbia Threadneedle Investments, and LAPFF, covering themes such as climate change, natural capital, human rights, and sensitive/topical issues. It also includes examples of voting decisions and detailed engagement outcomes with companies like BP, ArcelorMittal, Rio Tinto, and LyondellBasell.

Pooling Report

A Pooling Report will be presented, detailing charges made by LGPS Central to partner funds for governance, operator, and product development costs. It will also outline other transactions between partner funds and LGPS Central, such as interest payable, and provide a breakdown of LGPS Central's investment management expenses charged to partner funds. The report includes information on asset under management and performance by product/service, as well as transition costs and savings projections related to pooling.

Audit Opinion and Certificate

The committee will receive the Audit Opinion and Certificate from Grant Thornton UK LLP regarding the Shropshire County Pension Fund financial statements. This statement confirms the consistency of the pension fund financial statements within the annual report with the audited financial statements of Shropshire Council.

Statement of Responsibilities for the Statement of Accounts

The committee will review the Statement of Responsibilities for the Statement of Accounts, outlining the responsibilities of the Section 151 Officer as Chief Financial Officer and the council's responsibilities in managing its financial affairs.

Fund Policies

An update on various fund policies is scheduled, including the Pensions Administration Strategy, Governance Compliance Statement, Funding Strategy Statement, Investment Strategy Statement, Climate Stewardship Plan, Climate Change Strategy, and the Business Plan 2026-2029. These policies are available on the Shropshire County Pension Fund website.

Glossary

A glossary of terms relevant to the pension fund and its operations is provided for reference.

Contact Us

Contact details for Pension Services, including telephone numbers, email, and postal address, are provided for further information.