The Pensions Sub Committee of Dumfries and Galloway Council are scheduled to meet to discuss the external audit of the 2024/25 accounts, a Local Government Pension Scheme administration update, and a Pension Fund investment and accounting update. They will also consider an action plan relating to The Pension Regulator General Code of Practice, and the Pension Fund annual training plan. Some items, including a review of investment manager performance and a presentation by BlackRock, will be discussed in private.

External Audit of Pension Fund Accounts

The sub committee will be asked to receive the external auditors' report on the 2024/25 audit, approve the Letter of Representation to be certified by the Chief Financial Officer and approve the audited accounts.

According to the report pack, Audit Scotland have issued an unmodified audit opinion on the annual report and accounts, confirming they believe the accounts have been prepared in accordance with the law and relevant accounting code of practice.

The report pack also indicates that two new recommendations have been identified during this audit, relating to the development of a specific Business Continuity and Cyber Security Plan for the Pension Fund, and enhanced administration Key Performance Indicators (KPI) reporting.

Local Government Pension Scheme - Administration Annual Update

The sub committee will be asked to note an update of information regarding the National Fraud Initiative (NFI), and the annual report on Local Government Pension Scheme activity for the financial year 2024/25, in accordance with Regulation 57 of the Local Government Pension Scheme (Scotland) Regulations 2018.

The report pack states that the National Fraud Initiative (NFI) is a counter-fraud exercise which aims to prevent and detect fraud. The exercise operates across the UK public sector and includes 132 public bodies in Scotland including councils, NHS bodies, colleges and larger central government bodies.

The report pack also contains a Pension Scheme Administration Metrics Report April 2024 – March 2025, which details the performance of the Pensions Section against key performance indicators.

Pension Fund Investment and Accounting Update

The sub committee will be asked to note the Investment Update and the quarter 1 2025/26 budget monitoring position.

According to the report pack, a review of rebalancing opportunities has been carried out in consultation with Hymans Robertson LLP, the Fund's Investment Consultants, and it was agreed that it would be an opportune time to bring index linked gilts back to target level and reduce the over exposure to equity. Therefore a £14 Million transfer has been undertaken within Legal and General Investment Management (LGIM) to reduce the Fund's equity holdings (£7Million from RAFI and £7Million from Future World Global Equity) and increase investment in index linked gilts.

The report pack also details the spend for the first 3 months of the 2025/26 financial year, indicating that as at 30 June 2025 the fund had spent £766k against the budget of £5.6Million and is forecast to underspend by £163k by the end of the year, relating to vacancy savings accumulated due to the time taken to progress the recruitment of staff.

The Pension Regulator General Code of Practice - Action Plan

The sub committee will be asked to approve the action plan for improvements to ensure there is full compliance with The Code when it is reassessed in two years' time.

The report pack states that officers have identified 18 actions to address areas where the Pension Fund are not fully compliant, and that the action plan has focus on the areas where more actions are required, namely contributions, board structure and activities, and IT and cyber security.

Pension Fund Annual Training Plan

The sub committee will be asked to note the Record of Training for 2025/26, and that further updates of the Record of Training and Training Plan for 2025/26 will be brought to future meetings of this Sub Committee.

The report pack states that a formal training plan has been produced on an annual basis since 2017/18 for all Members of the Dumfries and Galloway Council Pensions Sub Committee, the Pension Board, as well as officers supporting the Pension Fund, to ensure full compliance with best practice and to ensure that Dumfries and Galloway Council Pension Fund meets and retains Professional Client status requirements as set out in Markets in Financial Instruments Directive (MiFiD II).

Review of Investment Manager Performance and Fund Manager Presentation

The sub committee will be asked to consider the contents of a report reviewing investment manager performance for the second quarter of 2025, and a presentation from fund manager BlackRock. These items will be discussed in private.