The Lancashire County Council Pension Fund Committee is scheduled to meet on Friday, 12th December 2025, to discuss several key items including pension-related training for committee members, budget monitoring, responsible investments, and an update on the Funding Strategy Statement Consultation. Members will also consider the Local Pensions Partnership Annual Report and Accounts 2024/25. Some items, such as an update on the LCPF Strategic Plan 2024/25, a shareholder update from the Local Pensions Partnership, and an investment performance update report, will be discussed in private due to the likely disclosure of exempt information.

Funding Strategy Statement Consultation

The committee will receive an update on the consultation regarding the Funding Strategy Statement (FSS). The report pack states that the FSS dictates how the Fund engages with employers over the next three years and is the key driver of scheme employer contributions.

The committee will be asked to approve key parameters of the proposed Funding Buffer, Recovery Period, Future Service Discount Rate and Past Service Discount Rate. The report pack notes that approving these parameters would reduce average total employer pension contribution rates across the Fund from 17.1% to a provisional 10.8% of pensionable pay.

The consultation on the draft FSS launched on 1 October 2025 and closed on 30 November 2025. According to the report pack, the Fund received 23 responses to the questionnaire, 3 written responses and held 50 meetings with representatives from 90 separate employers.

The report pack states that some employers have expressed concerns that the parameters used within the valuation are too prudent and have requested that the Fund offset some prudence to enable employer contribution rates to be reduced further. The report pack notes that these employers were primarily councils and academies.

The report pack states that the Fund has considered potential support mechanisms that councils across Lancashire may choose to adopt, subject to the Fund's agreement, to help reduce their overall contribution rates, including:

• Allowing councils to pre-pay employer pension contributions over a period of 2 years, allowing a discount in the contributions paid earlier than that certified by the Actuary.
• Considering approaches by councils and larger employers to increase the pension strain allowance from the standard amount proposed.
• Considering approaches by councils affected by Local Government Reorganisation to use a surplus position for pension strain payments during the next 3-year contribution period should the need arise.

Responsible Investments Report

The committee will discuss a report on responsible investment activity by Local Pensions Partnership Investments Limited (LPPI). The report includes a summary of activity covering the period 1st July 2025 to 30th September 2025.

The report pack states that on 16 October 2025, Full Council resolved to ask the Pension Fund Committee to review all Environmental, Social and Governance requirements and Net Zero targets of the LCC Pension Fund to ensure that Net Zero commitments do not go beyond statutory requirements and impact on the Fund's fiduciary responsibility to current and future pensioners.

The report pack also refers to Ministerial guidance published in 2016 by the Department of Communities and Local Government, under the title Local Government Pension Scheme – Guidance on Preparing and Maintaining an Investment Strategy Statement, which imposes a requirement on Pension Funds to consider factors that are financially material to the performance of their investments.

The report pack notes that LPPI has made a voluntary public commitment to the goal of aligning the investment portfolio with net zero emissions by 2050, but that this does not affect investment performance, with all investment decisions being primarily based on commercial principles of risk adjusted returns.

The report pack highlights several key takeaways from the report:

• LPPI co-sponsored and contributed to a white paper with The Good Economy on place-based impact investing¹.
• LPPI hosted its fourth annual conference in September, focusing on collaboration among partner funds and industry leaders, and discussing implications of regulatory changes.
• GLIL Infrastructure invested in a landmark UK project to future-proof water supply for millions in the Northwest, delivering regional economic benefits and job creation.

Local Pensions Partnership Annual Report and Accounts 2024/25

The committee will consider the Local Pensions Partnership Limited Annual Report and Accounts for the year ended 31 March 2025. The report includes a group strategic report and the financial statements of the company.

The report pack notes that the shareholders agreement for Local Pensions Partnership Limited (LPP) entitles the shareholders to receive the Annual Report and Accounts of LPP.

The report pack states that overall, LPP (incorporating both LPPI and LPPA) made an operating profit (pre-tax, pre-pension liability obligations) of £0.6m in 2024/25.

Budget Monitoring 2025/26 - Q2

The committee will review the financial results for the 6 months to 30 September 2025 and note the budget and forecast variances. The report sets out the income and expenditure of the Pension Fund for the 6-month period to 30 September 2025 and provides a forecast for the year ending 31 March 2026.

The report pack notes that at the start of the year, it was forecast that expenditure would exceed income by £101m in 2025/26, but that as at the mid-year review, it is forecast that expenditure will exceed income by £87m.

Pension related training for Committee members

The committee will receive an update on training involving members of the Committee which has taken place since the last meeting in September 2025.

The report pack notes that knowledge and understanding are extremely important in the governance of pension funds within the Local Government Pension Scheme (LGPS) as it is a complex and technical matter which is ever evolving.

The report pack states that Councillor Mr Joel Michael Tetlow, in his role as Chair of the Pension Fund Committee, has undertaken induction training with a range of key stakeholders including the Head of Fund and other fund officers, Democratic Services and the CEO of LPP.

The report pack also notes that County Councillors Rick Edwards, Gordon Johnson, Steve Rigby, D Shaw, and Russell Walsh participated in the Pensions UK conference (14-16 October 2025).

The report pack states that County Councillors Joanne Ash, Rick Edwards, Gordon Johnson, and Ashley Joynes participated in the LGA – LGPS Fundamentals (3 days, October, November, December 2025).

The report pack notes that County Councillors Joanne Ash, Mrs Marion Atkinson, Andy Blake, Ellie Close, Ashley Joynes, Steve Rigby and coopted members Councillor Liz Johnson, Mr P Crewe and Ms J Eastham participated in the LCPF Investment Strategy workshop (25 November 2025).

The report pack also notes that all core LOLA² modules have been completed by County Councillors Joanne Ash, Mark Clifford, Gordon Johnson, Ashley Joynes, and Russell Walsh, and coopted members Ms J Eastham and Ms S Roylance.

Investments In Occupied Territories (Israel)

The committee will receive further information regarding Fund investments in Israel.