The Investment and Pension Fund Committee of Devon Council met on Friday 27 February 2026 to discuss a range of important financial and governance matters. Key decisions included approving the transition of investment pooling arrangements to Local Pension Partnership Investments (LPPI), adopting the Funding Strategy Statement, and approving a new Conflicts of Interest Policy.

Investment Pooling Arrangements

A significant decision was made to approve the transition of the Fund's pooling arrangements from Brunel to Local Pension Partnership Investments (LPPI). This involves Devon County Council becoming a shareholder in LPPI Holdings Ltd, providing the required regulatory capital, and appointing the Assistant Director – Pensions and Investments, Mark Gayler, as a Director of LPPI Holdings Ltd. An Advisory Management Agreement with LPPI was also approved. The committee also authorised the Director of Finance and Public Value and the Director of Legal and Democratic Services to undertake necessary tasks to progress the implementation of the Shareholder Agreement and Advisory Management Agreement, including agreeing documentation, contracts, and financial expenditure. Furthermore, delegated powers were granted to progress the wind-down of Brunel Pension Partnership Ltd and to authorise the Assistant Director – Pensions and Investments to act as the nominated Shareholder Representative for Brunel Pension Partnership from 1 March 2026.

Concerns were raised about the tight government timescales for this transition. The committee discussed the estimated £3 million regulatory capital requirement, noting disappointment that the government had provided no direct funding. It was confirmed that some Brunel staff had secured positions with LPPI, which was seen as beneficial for a smooth transition and continuity of investment strategy, particularly regarding responsible investment. The need for a body to enable elected member involvement in the scrutiny of LPPI, similar to the Brunel Oversight Board, was emphasised, with a focus on maintaining scheme member representation. An initial stakeholder event was planned for April, allowing each fund to send up to five representatives.

Governance - Senior LGPS Officer and Independent Person

The committee considered the regulatory requirements to appoint a Senior LGPS Officer and an Independent Person to oversee investments, governance, and administration. The Assistant Director – Pensions and Investments, Mark Gayler, was formally designated as the Senior LGPS Officer, a role required by the Local Government Pension Scheme (Amendment) Regulations 2026. The committee expressed confidence in Mr. Gayler. The Independent Advisor to the Committee, Anthony Fletcher, left the room for discussions regarding the appointment of an Independent Person.

Members noted the expanded remit of the Independent Person, which would go beyond the existing investment-only advisory contract. A tender process will be undertaken to appoint this role. Discussions highlighted concerns about a potential conflict of interest, as the Independent Person would contribute to the Committee's work while also supporting the Pension Board, which scrutinises the Committee's actions. Officers clarified that this dual role was mandated by the government, and the Independent Person would not be expected to attend all Pension Board meetings but could provide training or briefings. The suitability of appointing a firm rather than an individual was also discussed, given the broad scope of the role. The committee resolved to approve the revision of the specification for the Independent Advisor and to undertake a procurement process for the appointment.

Internal Audit Plan 2026/27

The committee approved the Internal Audit Plan for 2026/27. The plan includes an increase in planned audit days to reflect wider regulatory changes and is aligned with emerging risks within the Local Government Pension Scheme (LGPS). Members sought clearer explanations in future reports regarding audit prioritisation and weighting. Assurance was given that the plan is flexible and that significant changes could be brought back to the Committee. Clarification was provided that audits of actuarial processes would focus on the Fund's data provision to actuaries and the implementation of recommendations, rather than the actuarial calculations themselves.

Investment Management Report

The committee noted the Investment Management Report, which detailed the Fund's value, asset allocation, performance, funding level, budget forecast, cash management, and voting and engagement activity as at 31 December 2025. The Fund's value stood at £6.84 billion, with a quarterly return of +2.3% and a year-to-date return of +11.6%. The Fund remained slightly overweight in equities, within acceptable tolerance, with no further rebalancing proposed before the transition to LPPI. Concerns were raised about the active equity performance lagging benchmarks due to underweights in major US technology stocks, often referred to as the 'Magnificent Seven'. Members requested clearer visibility of the Fund's exposure to these stocks, and officers agreed to enhance reporting. The passive Paris-Aligned allocation was also noted to be heavily exposed to these US technology stocks. Discussions also covered future diversification and the role of LPPI in this regard, with officers confirming this would be part of ongoing discussions. It was noted that LPPI would make future rebalancing decisions under new regulations, while Devon would retain responsibility for strategic asset allocation and investment beliefs. The importance of responsible investment continuity during the move to LPPI was reiterated.

Triennial Valuation and Funding Strategy Statement

The committee approved and adopted the Funding Strategy Statement. This followed employer consultation, which received minimal responses, although a detailed submission was made by the Department for Education regarding the treatment of academy trusts. The strategy statement treats academies equitably compared to other employer types. No substantive changes were deemed necessary from the version presented for consultation in September 2025.

Conflicts of Interest Policy

A new Fund-specific Conflicts of Interest Policy was approved. This policy introduces annual declarations and a dedicated register. The policy had previously been considered by the Devon Pension Board with no substantive comments or suggested changes. The committee suggested that clearer examples of potential and actual conflicts would be beneficial for inclusion in the guidance.

Fund Member Survey

The results of the 2025 Member Survey were approved for forwarding to LPPI for consideration in their implementation of the Devon Fund's investment policies. The survey, which received over 5,200 responses, indicated strong support for the Fund's fiduciary duty to maximise returns, a clear majority against investment in weapons manufacturing and tobacco, and balanced views on fossil fuels and other controversial investments. Members discussed the challenges of engaging deferred members and refining future survey methodologies. The clear opinion of respondents against investing in companies linked to controversial weapons and breaches of international law was highlighted as a significant signal for the Fund's direction. The AI summary provided in the report was noted as an accurate and fair representation of the survey responses.

Pension Fund Treasury Management Strategy 2026/27

The committee adopted the Treasury Management Strategy for 2026/27. The strategy presented was not substantially different from previously adopted strategies.

Peninsula Pensions Administration Update and Performance Statistics

The committee approved a revision to the Administering Authority Discretions to enhance resilience in handling Stage 2 appeals under the Internal Dispute Resolution Procedure. Peninsula Pensions reported generally strong administration performance for the quarter ending 31 December 2025, completing 94% of all cases within statutory timescales. However, workload pressures, particularly from McCloud remedy work and seasonal employer activity, were noted.

Peninsula Pensions Employer Performance Report

The committee noted the employer performance data for the quarter ending 31 December 2025. Broadly steady levels of starter and leaver notifications were reported, alongside continued monitoring of employer timeliness. Seven employers incurred fines for persistent late submission of data, following prior warnings. Assurance was given that all previously issued fines had been paid, and employers with slower processing times were being contacted directly to improve compliance.

Other Matters

The minutes of the Devon Pension Board meeting held on 3 February 2026 and the Brunel Oversight Board meeting held on 11 December 2025 were noted. The committee also noted the dates of future meetings.