The Local Pension Board of Leicestershire Council met on Wednesday 14 October 2026 to discuss the administration and communication strategies of the pension fund, budget monitoring, additional voluntary contributions, and risk management. Key discussions included the challenges of increasing employer onboarding, the need for additional resources, and the proposed changes to AVC investment choices.

Pension Fund Administration and Communication Strategies

The Board reviewed proposed changes to the Fund's Administration and Communication Strategies, which aim to clarify employer responsibilities, introduce a service level agreement (SLA), and enhance communication channels. Ian Howe, Pensions Manager, presented the report, highlighting that while many areas of pension administration continue to function well with positive customer feedback, the increasing number of employers and payroll changes present the largest current challenge. The proposed administration strategy includes clearer expectations and escalation routes for employers, with a focus on improving completion times for admission agreements and onboarding. The communication strategy has been separated into its own document, aiming to provide clear information to members, employers, and elected officials. The Board was invited to provide feedback on these draft strategies before they are finalised and presented to the Pension Committee.

During the discussion on administration, Dr. Dee North, an employer representative, raised concerns about staff stress due to resource reallocation and questioned the adequacy of current call handling times, suggesting a need for more staff. Councillor Andrew Innes also highlighted the employer situation as a sticky situation and questioned accountability and potential penalties for employers not meeting their obligations. Ian Howe explained the complexities of employer onboarding, including TUPE transfers and the legal necessity of admission agreements. He also noted that while penalties can be charged, the primary concern is protecting members' benefits, which has historically prevented the termination of agreements even in difficult cases. A suggestion was made for a workshop to collaboratively develop ideas for improving employer engagement and resource allocation.

Pension Fund Budget Monitoring Update

Bhulesh Kachra, Strategic Finance Manager, presented the Pension Fund's budget monitoring update for 2026-27 and forecasts for 2027-28. The report detailed the fund's expenditure, with the majority allocated to investment management expenses. The budget for LGPS Central, the fund's pool, remains at £3.7 million, reflecting increased costs associated with the Fit for the Future programme and expanded services. Investment management fees were noted to be lower than expected in 2025-26 due to lower assets under management and a one-off rebate, but are forecast to increase in subsequent years due to higher asset values and a greater proportion of investments in more expensive private market funds. The report also outlined staffing costs, which are projected to increase to accommodate additional pension officers and support for employer and i-Connect work. The Board noted the forecast figures and discussed the cost per member metric, with Mr. Kachra explaining that it is influenced by investment performance and the type of investments held.

Additional Voluntary Contributions (AVCs)

Ian Howe presented a report on Additional Voluntary Contributions (AVCs), detailing a proposed change to the fund's AVC investment choices and improvements for AVC payers. The current provider, Prudential, has been re-selected following a tender process. A key change involves replacing the existing With Profits Fund with PruFund for new AVC payers from Quarter 1 2027. PruFund uses a similar investment approach but offers a more modern smoothed fund structure. Existing members in the With-Profits Fund can continue or switch to other options. The report also highlighted the development of a new online retirement planning calculator by Prudential, which will be accessible to all scheme members. Additionally, the report touched upon Salary Sacrifice Shared Cost AVCs, an option available to employers, which can offer tax and National Insurance savings for both employees and employers. The Board noted the report and was invited to make comments to the Pension Committee.

Risk Management and Internal Controls

Kat, presenting the Risk Management and Internal Controls report, outlined updates to the Fund's risk register. A new risk related to Local Government Reorganisation (LGR) was added, reflecting the potential administrative and legal burdens during the transition to new unitary councils. However, due to a government-announced pause and review of the LGR programme, the timescale for this risk remains unclear, and it is proposed to keep the risk on the register for ongoing review. Several existing risks were also updated: Risk 2 (Market returns below expectations) was moved from green to amber due to increased concentration of oversight with LGPS Central. Risk 8 (Contributions not paid accurately or on time) was updated to reflect a positive Internal Audit review. Risk 17 (Pension Dashboards) saw further actions added, including the development of a governance policy and a planned internal audit. Risk 18 (Changes due to Fit for the Future and Investment Pooling) moved from amber to green, reflecting progress in implementing governance reforms, including the appointment of a Senior LGPS Officer and an Independent Person. The Board noted the report and the updates to the risk register.