The Lancashire County Council Pension Fund Committee met on 20 June 2025, and approved the updated training plan for 2025/26. The committee also noted the financial performance of the fund for the year ending 31 March 2025, and received updates on external audit activity and responsible investment matters.

Constitution, Membership and Terms of Reference

The committee noted the constitution and membership of the Pension Fund Committee. It was confirmed that Paul Crewe and Sue Roylance would continue as co-opted members representing Trade Unions. The committee also noted that paragraph t) of the Terms of Reference had been removed as it was a duplicate.

Lancashire County Pension Fund - Budget 2024/25

The committee noted the financial performance of the Lancashire County Pension Fund for the year ended 31 March 2025. The Head of Fund, Mr Greene, confirmed that officers have been actively engaging with Local Pensions Partnership Administration Limited (LPPA) to identify the cause of the increase in lump sum payments.

The budget for the financial year ending 31 March 2025 was approved by the Pension Fund Committee on 10 March 2024. The original budget expectation was that expenditure would exceed income by £70.6m. Actual experience shows that expenditure exceeded income by £27.4m. This actual position is a large improvement on the anticipated position, £43.2m better than expected.

Councillor County Steve Rigby asked about the increase in lump sum payments:

On the text on page 22, I'm a bit confused about the total benefits payable, 0.16. The amount paid per lump sum increasing by 28%. That's a fairly big variation. And how long is it going to take the LPPA to find out what's going on? Somebody's been giving away a lot of toffees, haven't they?

The Head of Fund responded that they were working with LPPA to understand the change, and would bring more detail to the September meeting.

The committee requested an update on the reasons for the overall adverse variance of the retirement lump sum payments being in excess of budget be presented to the next meeting.

Lancashire County Pension Fund - External Audit Plan 2024/25

The committee noted the external audit plan for 2024/25, which sets out a programme of work to give an opinion on whether the financial statement to be included in the LCPF Annual Report gave an accurate representation of the financial position and performance of the Fund at 31 March 2025.

Georgia Jones, Engagement Lead from Grant Thornton, took the Committee through the external audit plan and highlighted key sections.

The committee requested that a further report on the outcome of the external audit be presented to a future meeting.

Responsible Investments Report

The committee noted the update on responsible investment matters during Q1, as set out in the report presented. The Head of Fund presented a report on responsible investment matters covering Q1 of 2025 (January to March) and together with Mr Rule, Chief Executive of Local Pensions Partnership Ltd (LPP), answered questions from committee members. It was noted that further information on green/brown exposures and Environmental Opportunities would be given at the second induction session for committee members on 2 July 2025.

Councillor Brown asked about ethical investments and the ethical investment policy, and whether the council would consider setting up another subgroup to look at all aspects of ethical investments this pension fund is doing. The Head of Fund responded that the government requires a review of the responsible investment policy every three years, and that they had recently reviewed the policy and agreed it at the last pension fund committee.

Councillor County Rick Edwards asked about the increase in brown and green exposure, and the open-ended fund focused on climate migration. The Head of Fund responded that green and brown metrics cover about 70% of the portfolio, and that they would give more information on the Environmental Opportunities Fund at the induction session in a couple of weeks' time.

Councillor M Smith asked for confirmation of what the council is doing to prevent working with organisations that accept human rights abuses and modern slavery. Mr Rule responded that they have their own response to investment policies, which drive how they should be looking at things like human rights and modern slavery.

Training Plan 2025/26 and pension related training for Committee members

The committee approved the updated Training Plan for 2024/25, as set out in Appendix A to the report presented. The Head of Fund presented a report on the updated Training Plan for 2025/26 which set out the internal, external, and online training to support members of the committee in developing and maintaining their knowledge and understanding of pension relation matters. The report also highlighted the participation of committee members in training activity since the last meeting and the Head of Fund confirmed that Co-opted member Paul Crewe had attended the PLSA Local Authority Conference on 16/18 June 2025.