The Shropshire Council Pensions Committee met on Friday, 20 March 2026, to discuss the audit plan for the Shropshire County Pension Fund, the pension fund treasury strategy for 2026/27, and pensions administration monitoring. Key decisions included the approval of the audit plan for the upcoming financial year, the adoption of the treasury strategy, and noting the progress and performance of the pensions administration team.

Audit Plan for Shropshire County Pension Fund 2025/26

Grant Thornton presented their audit plan for the Shropshire County Pension Fund for the year ending 31 March 2026. The plan outlined the scope of the audit, which includes forming an opinion on the Fund's financial statements and assessing whether sufficient arrangements are in place for the conduct of its business and the safeguarding of public money. Significant risks identified for the audit include management override of controls and the valuation of Level 3 investments. The audit team detailed their planned procedures to address these risks, including evaluating the design effectiveness of management controls over journals and testing unusual journals. Materiality for the audit was set at £44.9 million for the Fund's financial statements, equating to 1.71% of gross investment assets, and a lower specific materiality of £14.3 million for the Fund Account. The proposed audit fee for the year is £90,404, with an additional fee variation of £5,000 anticipated for testing triennial valuation data. The plan also detailed the IT audit strategy, focusing on the Business World – Unit 4 and Altair systems, and outlined the interim audit work to be conducted in March 2026.

Pension Fund Treasury Strategy 2026/27

Justin Bridges, Head of Pensions – LGPS Senior Officer, presented the proposed Pension Fund Treasury Strategy for 2026/27. The strategy governs the management of the small working cash balances held by Shropshire Council for the Pension Fund, which are invested separately from the Council's own cash. The strategy aims to ensure the security of capital and liquidity of investments, while also seeking optimal returns. Recommendations included delegating authority to the LGPS Senior Officer to manage the Fund's day-to-day cash balances, approving the Treasury Strategy, and authorising the officer to place deposits and amend lending lists and limits in line with the Administering Authority's creditworthiness policy. The strategy adopts the same methodology as Shropshire Council's Treasury Strategy for determining minimum credit ratings, utilising information from MUFG Corporate Markets, and incorporates credit watches, credit outlooks, and Credit Default Swap (CDS) spreads. Country limits were also proposed, restricting counterparties to countries with a minimum sovereign credit rating of AA- from Fitch Ratings. The strategy anticipates potential further reductions in the Bank Rate, with balances expected to be invested short-term in accordance with the approved lending list.

Pensions Administration Monitoring

Vicky Jenks, Pensions Administration Manager, provided an update on the performance and issues affecting the pensions administration team. The report detailed team workloads and performance against Key Performance Indicators (KPIs), with 10 out of 14 KPIs achieving at least 95% of cases completed within legal time limits. Challenges were noted in the KPI for deferred benefits due to staff resignations and maternity leave, with recruitment underway. Improvements were highlighted in the KPIs for transfers, attributed to a change in resourcing. A new process for allocating work within the Membership and Benefits team, based on individual skill sets and capacity, was introduced from February 2026. The report also provided statistics on mortality screening, communications, and employer performance, noting that i-Connect data received on time was at 90% in September, October, and November 2025, and monthly contributions received on time were at 97-98%. Projects in progress included the 2025 valuation, the Pension Dashboards project, and preparations for the 2026 Pensions Increase. The report also included CIPFA benchmarking data, showing Shropshire's administration costs per member (£30.34) to be lower than the average (£40.52). Significant regulatory updates were also detailed, including changes to death grants, survivor benefits, qualifying additional pension arrangements, and the abolition of the lifetime allowance, with most changes set to take effect from 1 April 2026.

Governance

The Pensions Administration Manager also presented a report on governance, detailing regulatory breaches recorded from 1 April 2025 to 30 December 2025. No breaches were deemed 'materially significant' to require reporting to The Pensions Regulator. Four Internal Dispute Resolution Procedure (IDRP) cases were received and completed, all upheld and relating to decisions not to pay pension benefits on ill-health grounds. Fund policies reviewed and approved by the Committee included the Funding Strategy Statement as part of the 2025 valuation and the Medium-Term Business Plan 2026-29. The report also provided an update on the 'Fit for the Future' consultation, noting that regulations were due to come into force from 1 April 2026, and outlined the Fund's progress in meeting these recommendations, including the appointment of Justin Bridges as the LGPS Senior Officer and the ongoing review of the Governance Compliance Statement to become a 'Governance Strategy'. Vacancies on the Committee and Board were also addressed, with Thomas Biggins appointed as a Pensioner Representative to the Committee and Nick James appointed as a member representative to the Board.

Corporate Governance Monitoring

Peter Chadderton, Pensions Investment and Responsible Investment Manager, presented the Corporate Governance Monitoring Report. This report informed the Committee of corporate governance changes, including updates on the government's LGPS - Fit for the Future consultation and a review of socially responsible investment issues. The report detailed actions taken by the Fund's stewardship partners, LGPS Central, Columbia Threadneedle Investments, and the Local Authority Pension Fund Forum (LAPFF), during the quarter from 1 October 2025 to 31 December 2025. An update was provided on the Fund's position regarding the Palestine Solidarity Campaign's letter concerning investments in conflict zones, with the Government confirming that divestment decisions were a matter for central government. The report also confirmed the Fund's success in retaining its signatory status to the FRC's Stewardship Code. An update to the Climate Stewardship Plan was presented, reflecting recommendations from the Climate Risk Report. The Committee was asked to note and accept the position on voting and engagement activity and approve the revised Climate Stewardship Plan.

The meeting also included discussions on the Pension Bill 2026, which received royal assent and brought into law the recommendations from the Fit for the Future consultation. LGPS Central became responsible for all of the Fund's investments from 1 April 2026. The report also addressed the definition of 'local' investments, which would be considered in the exempt part of the meeting.

The Committee resolved to note and accept the position on voting and engagement activity, including reports from LGPS Central, Columbia Threadneedle Investments, and LAPFF, as well as the update from MHCLG on investing in companies in conflict zones and the update on the Pension Bill 2026. They also noted and accepted changes to the Climate Stewardship Plan.

The meeting concluded with a closed session to discuss exempt minutes and new employer admissions, followed by presentations on the investment portfolio, investment strategy, and investment monitoring. A training session on Understanding the Accounting and Audit Regulations was held immediately after the meeting.