The Hertfordshire Pension Fund Local Pension Board met on Thursday 16 July 2026 to review the fund's risk register, governance developments, and investment performance. Key decisions included noting the fund's risk register, which highlighted three areas exceeding tolerance thresholds, and approving updates to the investment strategy statement.

Pension Fund Risk Register Report

Alison Sharp, Pension Governance Manager, presented the Pension Fund Risk Register for the period January to March 2026. Three risks were identified as exceeding the tolerated risk threshold: ineffective management of the fund (Risk A1), skills or knowledge gaps at the administering authority (Risk A2), and ineffective investment decision-making (Risk C5). Risks A1 and A2 remain above tolerance due to the ongoing recruitment process for the Governance Manager position and uncertainty surrounding the Fit for the Future framework. Risk C5 remains above threshold due to the move to a new asset pool. The Board noted the contents of the report.

Employer Risk

Alison Sharp also presented the Employer Risk Report for January to March 2026. The number of risks in the red category increased from seven to nine. Of these, eight were considered true red risks. These included one ceased employer with an outstanding deficit, which is now subject to a debt-spreading agreement, four historical employers with no indemnity arrangements, and three employers who were late in providing contribution forms or payments. Fines have been issued to the latter group in line with the fund's administration strategy. The Board noted the paper.

Governance

Taryn Olmberg, Head of Pensions, provided an update on key governance developments affecting the Hertfordshire Pension Fund. This included regulatory updates on LGPS access and fairness, such as the equalisation of survivor benefits and the ability for elected members to join the LGPS from May 2026. The Fit for the Future governance requirements, which came into force on 30 June 2026, were also discussed. An appendix outlined a governance work programme running to 2029, a committee and board forward plan, and a schedule of policy and strategy reviews. The report indicated 72% compliance with the General Code of Practice, with five areas still under assessment. The Board noted the paper.

Hertfordshire LGPS and FPS Q4 2025/26 LPPA Performance Report

Chris from Local Pensions Partnership Administration (LPPA) presented the performance report for Quarter 4, ending March 2026. Casework performance remained strong, hitting service level targets at 98.8% for the year. The average wait time for the contact centre was 3 minutes and 32 seconds, with customer satisfaction consistently around 90%. Chris highlighted the significant regulatory changes impacting LGPS funds, including McLeod, Dashboard, and local government reform. He also provided updates on projects such as access and fairness, LGPS for elected members, scape factor changes, and the pensions dashboard, which is expected to go live in summer/autumn 2027. The Board noted the report.

Training Update

Taryn Olmberg presented an update on training undertaken by committee and board members in 2025/26, the results of the recent knowledge and understanding assessment, and the proposed training program for 2026/27. The Fit for the Future reforms extend statutory knowledge and understanding requirements to pensions committee members and officers. The report indicated a positive level of engagement with training, with board members showing strong participation. An annual knowledge assessment and gap analysis will be circulated to committee and board members and officers. The training plan for 2026/27 is themed around statutory knowledge, fund business planning, and emerging issues. The Board noted the paper.

Draft Audit Plan

Robert Winterton, Finance Manager, introduced the draft audit plan prepared by KPMG LLP, the fund's external auditors. Sudanshu Dadhich, Audit Engagement Manager from KPMG, outlined the planned approach for the audit of the Pension Fund financial statements for the year ended 31 March 2026. Key audit risks identified include management override of controls, completeness and accuracy of investments, valuation of investments, and the actuarial position of the fund. The audit fieldwork had already begun, with completion of fieldwork and presentation of findings expected by October 2026. The audit fee for 2025/26 was set at £111,000. KPMG confirmed their independence. The Board noted the draft audit plan.

Investment Strategy Statement

Phillip Prasad, Investment and Pooling Analyst, reported on the consultation feedback for the draft Investment Strategy Statement (ISS). Two responses were received, one from a Pension Board member and one from an employer body, both supportive of the proposals. No changes were proposed to the ISS presented in March, and it was approved by the Pensions Committee on 10 July. An updated ISS, based on the 2026 regulations, is planned for presentation to the Pensions Committee in September and the Pension Board in October, following further consultation. The Board noted the report.

Investment Performance and Funding Update Report as at 31 March 2026

Robert Winterton presented an update on the fund's investment performance and funding position. The estimated funding position as at 31 March 2026 was 115.9%, an increase from 112.2% as of 31 March 2025. Robbie Mercer from Mercer provided an overview of the investment performance for the quarter ending 31 March 2026. The fund's returns were strong on an absolute basis (10.5% for the year), but behind benchmark over most periods. The report noted that the asset position reflected the position prior to transition activity in Q2. The Board noted the report.

Dates of Future Meetings

The Board was invited to note the dates of future meetings for the remainder of the year and into 2027. Elaine Manzi, Democratic Services Officer, clarified that informal meetings are for training and investor meetings and would not involve public-facing discussions.

Other Part I Business

There was no other business raised for discussion in the public session.

The meeting then moved into Part II, which was closed to the press and public due to the likely disclosure of exempt information relating to financial and business affairs.