Here's a summary of the North Yorkshire Council Pension Fund Committee meeting held on 12 September 2025: The committee reviewed the fund's budget and cash flow, discussed the quarterly funding and investments report, and received an update on the asset allocation strategy. Members also approved the updated Funding Strategy Statement and Admissions and Terminations Funding Policy.

Triennial Valuation

The committee received a presentation on the preliminary results of the 31 March 2025 triennial valuation from Aon. Further details are expected to be discussed at the next meeting. Triennial valuations are carried out every three years to assess employer contribution rates, and to ensure that the North Yorkshire Pension Fund (NYPF) can meet its future liabilities to its members.

Budget and Cash Flow

The committee reviewed the budget and cash flow report, noting a forecast underspend of £0.1m against the 2025/26 budget of £40.7m. This was attributed to reduced performance fees payable to Baillie Gifford, following disinvestment. Further savings on investment base fees could be expected in future.

The fund's cash position was also discussed, with the fund holding cash well above the usual level due to disinvestment activities. At the end of July 2025, the cash balance was £181 million, or 3.6% of the total value of the fund. This cash is expected to reduce as it is invested in index-linked bonds and used to meet capital calls for UK real estate, infrastructure and private credit investments.

The committee also received an update on the fund's statutory accounts and annual report, and noted that the audit was progressing but had been hampered by staff absences.

Quarterly Funding and Investments Report

The committee considered the quarterly funding and investments report from Aon. Total fund performance was ahead of the composite benchmark over the quarter and three-year periods, but behind over the five-year period to 30 June 2025. The five-year performance continues to be impacted by volatility and challenging market conditions in the early 2020s.

The report noted that global equity markets rose over Q2 2025, despite a significant correction in the early weeks of the quarter. UK investment grade credit spreads narrowed, and the UK nominal gilt yield curve shifted downwards across short and medium-term maturities.

The report also included a review of the fund's investment managers, and Aon's market outlook and favoured investment strategies.

Investment Strategy - Asset Allocation Update

The committee received an update on recent changes to the fund's asset allocation. Following the February 2025 committee meeting, where a new strategic asset allocation was agreed, initial rebalancing steps have been taken. These included:

• Fully redeeming UK equities during April and May 2025, with the proceeds invested in the Border to Coast Inflation Linked Bond fund.
• Partial redemptions from Baillie Gifford Long Term Global Growth in June and July 2025, with proceeds invested in cash.
• Further partial redemptions from Ballie Gifford Long Term Global Growth in August and September 2025, with proceeds invested in the Border to Coast Inflation Linked Bond fund.

The fund has also committed c.£37.5m to the Border to Coast UK Real Estate fund, with £13.1m having been drawn down in July 2025.

Pension Board Minutes

The committee reviewed the minutes of the Pension Board meeting held on 3 July 2025. Key items discussed at the board meeting included:

• Government consultations on a potential second phase for pooling.
• A potential candidate for the Employer Representative vacancy.
• Internal audit issues and feedback from the knowledge assessment.
• A minor amendment to the Board's Terms of Reference to comply with the new General Code of Practice issued by the Pensions Regulator (TPR), to specifically outline that Members of the Pension Board are able to resign from the Board.
• The draft Annual Report of the Pension Board for 2024/25.
• An update on McCloud and the updated Governance Documents that were considered by the Pension Fund Committee.
• Internal Audit Reports.
• The Annual Review of Dispute Cases Report and Exercise of Discretions.
• Training.
• The Work Plan.

Pension Administration

The committee considered a report from the Treasurer regarding pension administration. The report covered a range of topics, including:

• Membership Statistics: As of 30 June 2025, the fund had 30,846 active members, 38,851 deferred members, and 33,560 pensioner members.
• Performance Statistics: For the period 1 April 2025 to 30 June 2025, 96% of measured work was completed within target, and 92% of customers surveyed ranked the service as good or excellent.
• Commendations and Complaints: The fund received four commendations and two complaints during the quarter.
• Annual Benefit Statements: The deferred benefit statements were published on 30 June 2025, and the active statements were published on 31 July 2025.
• Breaches Policy & Log: There were no new entries in the Breaches Log this quarter.
• Governance Documents: The committee approved the updated Funding Strategy Statement and Admissions and Terminations Funding Policy.
• McCloud: McCloud information has been included in the 2025 annual benefit statements.
• Pensions Dashboard: Data errors identified as part of the test load have been corrected and the fund is now connected to the Dashboard as far as it can be ahead of the LGPS connection date of 31 October.
• New TPR General Code of Practice: Officers have undertaken a review of the amber and red items in the compliance checker and have updated the position in line with changes that have been made. An update report is included at Appendix 5 which shows the changes since the last report was produced.

Public Questions

The committee addressed questions raised by members of the public, Richard Tassell and Howard Green, during the meeting held on 27 June 2025, regarding investment strategy and climate change.

Richard Tassell questioned the committee about divesting their remaining investments in oil and gas. The committee responded that they believed that aiming to influence company behaviour through engagement was an appropriate and constructive approach, and that divestment would lose any influence they may have and would be likely to put shares in the hands of investors with little or no interest in this issue.

Howard Green questioned the committee about the apparent contradiction between the council's climate change strategy and the pension fund's investments in fossil fuel producing industries. The committee responded that the Pension Fund is managed on a completely different basis and has different objectives, policies and strategies to the Council's other arrangements, and that the Pension Fund has its own policy on responsible investment and carbon neutral objectives, where the aim is to be carbon neutral by 2050 or sooner.

Governance Arrangements

The Head of Investments presented a report reviewing a range of governance documents and seeking the committee's approval of them.

The following was discussed:

• Members voiced concern over regulatory changes outlined in the report which would align the Council's Responsible Investment Policy to Border to Coast's policy.
• Members considered whether higher levels of sensitivity in relation to overpayments from another authority were appropriate.
• It was noted that the Knowledge and Skills Policy may be subject to future revision to establish a clearer framework.
• The Officer advised that it was an appropriate moment to adopt the Border to Coast policy, noting that the Council's position has historically aligned with that of Border to Coast, and that the latter's policy is more comprehensive in its detail. It was clarified that alignment was not binding and that should BtC shift direction then the council would still determine how assets were allocated, and other options could be explored.

The committee resolved to approve the governance documents listed in the report and to note the draft 2024/25 NYPF Statement of Accounts.

McCloud Determination

The officer provided an update on the McCloud determination¹ to the committee. It was noted that other Pension Funds were in a similar position, and that officers were very confident they would meet the deadline. Members were minded to approve the extension of the processing deadline subject to compromise with the Pension Board.