The Pension Fund Committee and Pension Board of Scottish Borders Council met on Thursday, 5 March 2026, to discuss a range of financial and operational matters concerning the Pension Fund. Key topics included updates on the Pension Fund's risk register, the internal and external audit plans, budget monitoring, and the proposed Statement of Investment Principles for 2026.

Pension Fund Risk Register Update

The meeting was scheduled to consider a report by the Chief Officer Audit and Risk providing an update on the review of the Pension Fund's Risk Register. This included an assessment of the Investment category of Risks and Administration Risk 305 (Cyber Security). The report outlined the current risk scores, likelihood and impact assessments, and any mitigation actions being pursued. The recommendations included approving the review of these risks and noting the schedule for future updates.

Internal Audit Annual Plan 2026/27 for the SBC Pension Fund

A report by the Chief Officer Audit and Risk was presented for approval of the Internal Audit Annual Plan for the Scottish Borders Council (SBC) Pension Fund for 2026/27. This plan is designed to provide statutory annual audit assurance and an opinion on the adequacy of the Pension Fund's control environment. The report detailed the scope of audit activity, aligned with the Global Internal Audit Standards (GIAS), and confirmed the allocation of 25 days for this assurance work.

Proposed External Audit Plan 2025/26

The committee was scheduled to consider the Annual Audit Plan for 2025/26 prepared by Audit Scotland. This plan outlines the scope and timing of the audit of the Pension Fund's annual accounts, including an opinion on whether they give a true and fair view. It also covers wider scope areas such as Financial Management, Financial Sustainability, Vision, Leadership and Governance, and Use of Resources to Improve Outcomes. The plan detailed materiality levels, significant risks of material misstatement, and the planned audit responses.

General Code of Practice Compliance Tracker

A report by the Director of Finance presented the General Code Compliance Tracker for approval. This tracker monitors the Pension Fund's progress in complying with The Pension Regulator's (TPR) General Code of Practice, introduced in March 2024. The report detailed compliance levels across regulatory requirements, TPR expectations, and best practice, highlighting key focus areas completed in the last quarter and outlining outstanding actions required to achieve full compliance.

Pension Fund Budget Monitoring to 31 December 2025 and Budget 2026/27

The Director of Finance presented a report on the Pension Fund's budget monitoring up to 31 December 2025 and sought agreement for the proposed budget for 2026/27. The report provided an updated expenditure position against the approved budget for 2025/26, explaining any variances. It also detailed the proposed budget for 2026/27, broken down by category, including Investment Management, Administration, and Oversight and Governance costs. The report also included a cash flow monitoring section, reflecting income and expenditure over the past year.

Statement of Investment Principles 2026

The meeting was scheduled to consider the revised Statement of Investment Principles (SIP) for 2026, presented by the Director of Finance. This document, required by the Local Government Pension Scheme (LGPS) Regulations, outlines the principles governing the investment operations of the Pension Fund. The report detailed the main amendments to the SIP, including updates to reflect changes in asset managers, investment strategy reviews, and the strategic asset allocation.

Information Update

A briefing paper by the Director of Finance provided an update on several monitored areas and ongoing work. This included confirmation of the successful renewal of the Stewardship Code application, an update on proposed changes to The Local Government Pension Scheme (Scotland) Regulations following a consultation, and information regarding the sale of the Heywood group to Keylane. Updates were also provided on the Member Self Service portal, the Scheme Advisory Board, Life Certificates, and staff changes within the Pensions, Investments and Accounting Team.

The meeting also included consideration of minutes from previous meetings, including the Pension Fund Investment and Performance Sub-Committee, and items likely to be taken in private, such as performance updates and specific investment strategy reports.