The Local Pension Committee of Leicestershire Council met on Friday 11 September 2026 to discuss a range of financial and governance matters relating to the Pension Fund. Key topics included updates on investment performance, responsible investment strategies, and the implications of regulatory changes such as the Fit for the Future reforms.

LGPS Central Presentation

Representatives from LGPS Central, the asset pooling company for several Local Government Pension Schemes (LGPS), were scheduled to provide a presentation. This presentation was expected to cover new services being offered to the Fund as a result of the Fit for the Future reforms, as well as an overview of private market investments. The report highlighted that the Fund had approximately £5.3 billion invested in LGPS Central's products, representing around 66% of its total assets. The presentation was also intended to detail the progression of services from LGPS Central, a private markets overview, and specific information on private equity, private credit, infrastructure, and property investments. The report noted that the Fund was currently underweight in the private credit asset class, with approximately £470 million invested against a target of 9.5% of total Fund assets.

Valuation of Pension Fund Investments

A report was scheduled to provide an update on investment markets and the performance of individual asset classes, as well as the total value of the Fund's investments as of 30 June 2026. The report indicated that global investment markets had produced positive returns in the second quarter of 2026, with global equities advancing strongly. It also noted that UK equities remained attractively priced relative to global markets. The outlook for commodities was discussed, with potential support from structural factors such as underinvestment in energy and mining sectors. The report also included a draft scope for the 2027 Strategic Asset Allocation (SAA) for comment.

Fit for the Future Update

This agenda item was scheduled to provide an update on regulatory developments related to the Fit for the Future (FFTF) programme and governance arrangements for LGPS Central. The report detailed key requirements from new statutory guidance, including enhanced knowledge and understanding for pension committee members, the mandatory appointment of an LGPS Senior Officer and an Independent Person, and arrangements for mandatory Independent Governance Reviews. It also outlined requirements for asset pooling, including FCA authorisation and the transition of all LGPS assets to be managed by pool companies. The report noted that officers had been working to meet these requirements, including the development of a training strategy and interim arrangements for the Senior LGPS Officer role.

Responsible Investment Report

The committee was scheduled to receive an update on progress against the Responsible Investment (RI) Plan 2026, as well as the Fund's quarterly voting report and stewardship activities. The report defined responsible investment as the integration of financially material Environmental, Social and Governance (ESG) factors into investment processes. It highlighted that government guidance emphasised transparency and the consideration of ESG factors where they are financially material, without directing investment in individual companies or specific investment styles. The report also detailed the Fund's voting activities through LGPS Central, Legal and General Investment Management (LGIM), and the Local Authority Pension Fund Forum (LAPFF), noting that votes against management were often related to board structure, diversity, and inadequate management of climate risk.

Risk Management and Internal Controls

This report was intended to inform the committee of any changes relating to the risk management and internal controls of the Pension Fund, as stipulated in the Pension Regulator's Code of Practice. The report detailed the Fund's risk register, which categorised risks into six areas: Investment, Liability, Employer, Governance, Operational, and Regulatory. A significant new risk was identified concerning the implications of local government reorganisation, which would require a new administering authority to be designated for the Fund. The report outlined the process and timescale for designating this authority, with options including allocation to a new unitary authority or the creation of a Single Purpose Pensions Authority (SPPA).

Pension Fund Annual Report and Accounts 2025/2026

The committee was asked to approve the appended Annual Report and Accounts for the Pension Fund for the financial year 2025/2026. The report detailed the Fund's financial performance, governance, administration, and investment strategy. It noted a strong financial performance, with assets under management reaching £7.4 billion and a funding level of 140% as of 31 March 2026. The report also highlighted progress in governance improvements and the ongoing administration of the McCloud Remedy. The accounts were subject to external audit by Grant Thornton LLP.

Board Annual Report 2025/2026

This item was to present the Annual Report of the Local Pension Board for the financial year 2025/2026. The report summarised the Board's work in assisting the Administering Authority with the effective management of the Pension Fund, including ensuring compliance with LGPS Regulations and the requirements of The Pensions Regulator. The report noted the completion of active and deferred member record updates for Annual Benefit Statements related to the McCloud Remedy and monitored remaining retrospective work. It also highlighted preparations for the national Pensions Dashboards Programme and the development of a new online Member Self-Service platform.