The Pensions Panel of Staffordshire Council met on Tuesday 3 March 2026 to review the fund's investment performance, responsible investment and stewardship activities, and to approve annual investment strategies and adviser objectives for the upcoming financial year. Key discussions included the fund's performance against its benchmark, engagement with companies on climate change and human rights, and the strategic direction for managing pension fund cash.

Pension Fund Investment Performance and Portfolio of Investments as at 31 December 2025

The Panel received a report detailing the Staffordshire Pension Fund's investment performance for the quarter ending 31 December 2025. The Fund returned +2.92%, underperforming its strategic benchmark return of +3.27% by -0.35%. While global equities rose during the quarter, buoyed by interest rate cuts from the US Federal Reserve and strong corporate earnings, the Fund's equity portfolio was the worst performing asset class against its benchmark. The infrastructure portfolio was the best performing asset class in absolute terms, while property was the lowest performing in absolute terms. Despite the quarterly underperformance, the Fund's longer-term annualised returns since inception remained at +7.95% per annum, exceeding the Actuary's investment return assumption of 5.9%. The total market value of the Fund as of 31 December 2025 was £8.509 billion, an increase of approximately £230 million from the previous quarter.

Annual Investment Strategy for Pension Fund Cash 2026/27

The Panel considered the proposed Annual Investment Strategy (AIS) for the investment of internally managed pension fund cash for the 2026/27 financial year. The strategy adheres to the principles of prudent investment, prioritising security and liquidity before seeking the highest rate of return. The report highlighted the implications of the upcoming 'Fit for the Future' reforms, which will divide the Fund's cash into 'operational cash' (managed by the Fund) and 'investment cash' (managed by LGPS Central). The AIS for 2026/27 has been prepared on the same basis as previous years for operational cash, with a strategic asset allocation to cash of 1.0%. The strategy also outlined guidance on standard and non-standard investments, including investments in the UK Government, local authorities, money market funds, and banking providers, with specific limits and durations detailed. The report also addressed credit outlook changes, including the Bank Recovery and Resolution Directive and ring-fencing legislation, and advised a cautious approach to bank deposits.

Responsible Investment & Stewardship (RI&S) Report for the Quarter Ended 31 December 2025

The Panel received the RI&S report for Q4 2025, which included updates from the Local Authority Pension Fund Forum (LAPFF) and LGPS Central. The report detailed ongoing engagement with companies on critical issues such as climate change, human rights, and natural capital. Key achievements included LAPFF's continued efforts to encourage companies to hold shareholder votes on their climate transition plans, with 8 companies committing to this by the end of the quarter. Engagements with companies like Shell and BP highlighted efforts to address climate risks and influence corporate strategy. The report also detailed LAPFF's increased focus on conflict-affected and high-risk areas (CAHRAs), with a position statement published and letters sent to FTSE 100 companies requesting details on their approaches to operating in these regions. The report also covered engagements on human rights in the luxury goods sector and the impact of the upcoming Employment Rights Act on zero-hour contracts. Voting highlights included votes against executive pay packages at Tesla and JD Weatherspoon, and support for shareholder resolutions at Microsoft concerning human rights and AI oversight.

2026/27 Investment Consultant and Independent Investment Adviser Objectives

The Panel was asked to approve the 2026/27 Investment Consultant Objectives for Hymans Robertson and the objectives for the Fund's Independent Investment Advisers. These objectives are set annually in response to regulatory requirements and aim to ensure the Fund's investment strategy delivers required returns, supports a stable funding approach, and aligns with LGPS asset pooling objectives. The report noted that with the imminent implementation of the 'Fit for the Future' reforms via the Pensions Bill 2025, LGPS Central would become the Fund's Principal Investment Adviser. Given the uncertainty and phased transition, it was deemed appropriate to set objectives in the current format for Hymans and the Independent Investment Advisers for one further year. The objectives for the Independent Investment Advisers are designed to act as a check and balance on the Fund's Principal Adviser.

The meeting also included the confirmation of the minutes from the previous meeting held on 2 December 2025 and the noting of future meeting dates. The Panel then moved to exclude the public for the consideration of exempt information relating to financial updates and manager monitoring.