The Pensions Committee of Cornwall Council met on Thursday 17 September 2026 to review the Cornwall Pension Fund's investment performance, administration, and governance. The committee noted the fund's financial position, recommended that the Constitution and Governance Committee approve proposed changes to the council's constitution, and resolved to formally adopt the draft Administration Strategy Statement following a period of consultation.

Cornwall Pension Fund Business Update - Part 1 - Investments

The committee received a comprehensive update on the Cornwall Pension Fund's investment performance for the quarter ending 30 June 2026. The fund's total market value increased by £163 million to £2,824 million, with a positive return of 6.5%, placing it ahead of its actuarial return target. This recovery was attributed to a strong performance in equities, driven by an interim ceasefire in the Middle East and increased investment in artificial intelligence (AI). Representatives from LPPI, who began managing the fund's investments during this quarter, provided an overview of market conditions, noting increased volatility due to geopolitical factors, inflation, and interest rate expectations.

Discussions also covered the fund's exposure to inflation and geopolitical risks, with officers explaining that the diversified portfolio helps mitigate concentration risk. The committee was assured that measures were in place to protect against inflationary impacts. Regarding exposure to oil and fossil fuels, it was clarified that the fund has limited exposure, and some energy companies are investing in renewable energy. Officers agreed to provide a breakdown of regional classifications.

A summary of the interim funding position was presented by the fund's actuary, Hymans Robertson. While the investment return target of 6.2% had not been achieved in the previous valuation period, the overall investment strategy was deemed appropriate and currently ahead of target. The committee was informed about the methodology for setting the discount rate assumption, which had been revised downwards due to market trends.

Concerns were raised about the performance of certain Gresham House investments, which were performing significantly below expectations and being closely monitored. Further details were promised for a closed session. The committee was reminded that the Local Impact Portfolio aims to support investments within Cornwall, alongside broader UK investments. Investments within this portfolio include those managed by Octopus, a commitment to affordable housing through the PGIM portfolio, and investments in renewable energy infrastructure through the Schroders Greencoat solar portfolio.

The committee also discussed the impact of a declining number of Cornwall Council staff in the fund. The fund's actuary reassured members that there were sufficient capital reserves to meet future pension liabilities, as funding and contribution strategies are based on long-term projections. The fund's membership extends beyond Cornwall Council to approximately 150 participating employers.

The Head of Pensions and Treasury addressed correspondence from the Palestine Solidarity Campaign (PSC) regarding fund investments and alleged breaches of international law. It was clarified that decisions on boycotts, divestment, and sanctions are matters for central government and foreign policy, not local authorities. The Scheme Advisory Board (SAB) is seeking further clarification from the government on this issue. The committee was reminded of the fund's fiduciary duty to secure pension benefits by maximising investment returns. LPPI confirmed its continued compliance with all applicable UK sanctions and legal requirements.

The committee resolved to note the fund's position as at 30 June 2026, including investment performance and the statement regarding the conflict in Gaza, and to seek further clarification from officers as required.

Cornwall Pension Fund Business Update - Part 1 - Benefits Team

The committee received an update on the administration activities of the Cornwall Pension Fund (CFP) Benefits Team for the last quarter. The report detailed ongoing and future business issues related to the administration of the Local Government Pension Scheme (LGPS). Key statistics presented included movements in active and non-active membership, unprocessed leavers, and unclaimed refunds.

Officers addressed questions regarding the number of outstanding tasks, clarifying that figures represented a running total of cases within the work queue. The performance and administration statistics presented did not include data relating to the Firefighters' Pension Scheme, which is a separate scheme.

An identified error concerning the duplication of transfer quote requests submitted through the online member portal was explained as a result of the move to a new system, and members were reassured that it did not indicate wider data concerns. The low completion rate for transfer cases was attributed to external factors and dependencies on third parties, with an update on the Superannuation Contributions Adjusted for Past Experience (SCAPE) rate change and its implications for members and employers.

The committee was informed about a complaint received, with a summary of the investigation and current position provided. The results of the first employer survey were discussed, with a generally positive outcome and no significant concerns identified. Increasing employer engagement was highlighted as a priority for future surveys. Discussions also touched upon future LGPS changes, particularly academy fund consolidation, and safeguards to prevent contribution rate shopping.

The committee resolved to note the update provided within the report and to seek clarification and further assistance from officers as required.

Cornwall Pension Fund Business Update - Part 1 - Governance

An update on the governance of the Cornwall Pension Fund was presented, covering areas such as the Pension Board, payment of contributions, the risk register, fund attendance and training records, and the Fit for the Future Governance Work Plan.

Officers responded to questions regarding training attendance, stating there were no current concerns and that training was targeted towards key areas relevant to upcoming decisions. Work was underway to develop a more formal knowledge assessment process.

An update was provided on the Fit for the Future governance work plan, highlighting the need to review and update policies and governance documents to comply with new statutory guidance issued by the Ministry of Housing, Communities and Local Government (MHCLG). Amendments to the Council's Constitution were detailed, which would require submission to the Constitution and Governance Committee for approval.

Preparations for the actuarial tender process were underway, with a detailed timetable developed. Volunteers were sought to participate in interview panels for the tender evaluation.

Regarding the Overpayment of Pension Policy, officers clarified that overpayments could occur due to the timing of death notifications, and the fund operated a de minimis threshold of £250 for recovery.

The committee resolved to note the governance update, recommend that the Constitution and Governance Committee approve the proposed changes to the Council's Constitution, and formally adopt the draft Administration Strategy Statement following a period of consultation.

LPPI Update

The committee received an update on the activities of LPPI (Local Pensions Partnership Investments). Representatives from LPPI provided information on key issues, including the level of investment proposed for the UK Scale-Up Fund, with participating pension funds indicating a commitment of up to £1 billion. Individual fund allocations were yet to be determined.

It was noted that while Cornwall-based businesses could potentially benefit from the UK Scale-Up Fund, the initiative was at an early stage, and investment would be sought across the UK rather than being specifically allocated to Cornwall. Separate arrangements are in place to support local investment opportunities.

Members were advised that the Client Relationship Manager and Client Portfolio Manager would normally attend committee meetings regularly, supported by other representatives as needed, with attendance driven by committee requirements and training programmes.

The committee resolved to note the update given by LPPI representatives and to seek further clarification and information as required.

Cornwall Pension Fund Business Update - Part 2 - Investments

The committee considered a Part 2 report providing an update on the fund's investment activities. This included an update on the underperformance of Gresham House, primarily attributed to the performance of Wildanet. Further updates were promised. Representatives of LPPI provided an update on recent investment activity, including the PGIM Affordable Housing Fund and the Gresham House British Sustainable Infrastructure Fund II. The Pensions Investment Manager provided details on the formal wind-down of the Brunel Pension Partnership.

The committee resolved to note the detailed position of the fund as at 30 June 2026 and the activity covered in the appendices, and to seek clarifications and further information from officers as required.