The Pensions Committee of Hertfordshire Council was scheduled to discuss significant changes to the Local Government Pension Scheme's (LGPS) investment pooling arrangements, including a move to the Border to Coast Pension Partnership. The committee was also set to review the fund's asset rebalancing strategy in light of these upcoming changes and evolving investment policies.

Decision on the Pension Fund Investment Pool

The committee was scheduled to consider a report outlining the findings from an evaluation of investment pooling options for the Hertfordshire Local Government Pension Scheme. The report recommended becoming a partner and shareholder of the Border to Coast Pension Partnership (BCPP). This move is in response to government requirements for LGPS pools to delegate investment strategy implementation, take principal advice from the pool, and transfer legacy assets. The Hertfordshire Pension Fund currently pools its investments within the ACCESS investment pool, but the government rejected ACCESS's business case, instructing member councils to join another investment pool. BCPP was identified as the preferred partner due to its governance, cost efficiency, and alignment with government standards. The report detailed the necessary legal agreements, including an Inter Authority Agreement and a shareholder agreement, to join BCPP. It also outlined proposed changes to the current Inter Authority Agreement with the ACCESS pool to facilitate its wind-down. The committee was asked to recommend to the County Council that it agree to these arrangements, including setting up a Joint Governance Committee and delegating functions to it, becoming a shareholder of BCPP, and amending the ACCESS Inter-Authority Agreement.

Asset Rebalancing Review

A report was scheduled to be presented to the committee for an annual review of the Hertfordshire Pension Fund's current investment portfolio against its strategic target asset allocation. The review, provided by Mercer, was based on market values as of 30 November 2025. The report indicated that equities were slightly overweight, while bonds and alternative assets were slightly underweight. In light of upcoming changes to the strategic asset allocation, which proposed a decrease in equities and an increase in bonds, and the impending transition to the Border to Coast Pension Partnership (BCPP) where BCPP will have full control over investment decisions from April 2026, the report recommended specific asset rebalancing activities. These included rebalancing from overweight regional UBS equity positions to UBS Index-Linked Gilts, and consolidating remaining regional passive equities into the UBS Climate Aware Fund. This consolidation was also intended to simplify the transition to BCPP and reduce the fund's carbon footprint. The report detailed the estimated transaction costs for these proposed rebalancing activities.