The Pension Fund Committee of Durham County Council met on Wednesday 09 September 2026 to discuss the overall value and performance of the pension fund's investments. The meeting also covered updates on internal audit progress, regulatory changes, and governance strategies, including the selection process for an Independent Person and an update on asset pooling.

Overall Value of Pension Fund Investments

The committee was scheduled to receive an update on the overall value of the Pension Fund's investments as of 30 June 2026. This included information on the total value of the fund, the cash balance held, and cash held by fund managers. The report also detailed the movement in the cash balance during the quarter, actual cash flows from January to June 2026, and a forecast of cash flows to June 2027. Rebalancing activity undertaken during the quarter was also to be discussed, including the transfer of holdings in two CBRE assets to Border to Coast Pensions Partnership (BCPP) to fund an initial subscription into the BCPP Global Core Real Estate Fund.

Performance Measurement of Pension Fund Investments

A report was scheduled to provide an overview of the investment performance of the Pension Fund up to 30 June 2026. This report, produced by the Fund's custodian, Northern Trust, was expected to detail the fund managers' benchmarks, the total fund performance for the quarter, and for the last one, three, five, and ten years, as well as since inception. It was also to provide individual fund managers' performance in absolute and relative terms against their benchmarks.

Internal Audit Plan 2026/27 Progress Report

The committee was to receive a progress report on the 2026/27 Internal Audit Plan up to 31 August 2026. This report aimed to provide assurance on internal control systems, advise on areas requiring control improvements to manage risks, and detail any other audit work undertaken. The report indicated that three assurance audits brought forward from the previous year had final reports issued, with Substantial assurance opinions given for Pension Fund Debt Recovery, Pension Fund Admission Bodies, and Pension Fund Cash Flow Management. Several other audits for the 2026/27 year were planned or in progress.

Regulatory Update

An update was scheduled on developments relevant to the Local Government Pension Scheme (LGPS) and other non-LGPS matters of interest. Key LGPS-specific developments included new guidance on governance, pooling, and investment frameworks, which came into effect on 30 June 2026. This guidance increases the evidence required from administering authorities regarding competence, resourcing, independent assurance, investment advice, and the division of responsibilities between the Fund and its asset pool. The report also covered the implementation of the McCloud remedy, which addresses unlawful age discrimination in public service pension schemes. Non-LGPS matters included an update on The Pensions Regulator's strategy and corporate plan, and the progress of Pensions Dashboards, with schemes required to be connected by 31 October 2026.

Governance Strategy, Training Strategy and Code of Conduct

The committee was to consider draft documents for a Governance Strategy, Training Strategy, and Code of Conduct. These documents are intended to form a single governance framework, addressing strengthened requirements for leadership, competence, independent challenge, and assurance introduced by LGPS governance reforms. The Governance Strategy clarifies responsibilities and decision-making, the Training Strategy establishes knowledge and understanding expectations, and the Code of Conduct sets standards for integrity, objectivity, stewardship, and managing conflicts. The report proposed a consultation process for these drafts before final approval.

Independent Person Selection Process

A report was presented seeking approval to commence a procurement and selection exercise to appoint an Independent Person. This role is a legal requirement under the LGPS (Amendment) (Governance) Regulations 2026, intended to support the Pension Fund Committee and the LGPS Senior Officer by providing independent expertise and constructive challenge. The Independent Person will not have decision-making authority or replace existing roles but will scrutinise advice, monitor performance, and support governance reviews. The report outlined the proposed scope, principles, and delegated authority for the appointment process, with the aim of ensuring independence, quality, and value for money.

Pooling Update

The committee was to receive an update on Border to Coast Pensions Partnership's (BCPP) preparations for the strengthened LGPS pooling framework. The report detailed the practical implications for investment implementation and oversight, highlighting areas where Pension Committees will need to maintain strategic focus. It noted that BCPP has made substantial progress in integrating assets and preparing for new regulatory requirements, with a significant portion of Partner Fund assets already invested or forecast to be under Pool management. The report also outlined the evolution of BCPP's investment implementation model, governance arrangements, customer strategy, and approach to local investment.

Overall Value of Pension Fund Investments to 30 June 2026 and Pension Fund Cash Flows

This report provided an update on the overall value of the Pension Fund's investments as at 30 June 2026, which stood at £4.298 billion. It detailed the movement in the cash balance during the quarter and actual cash flows for the period from 1 January 2026 to 30 June 2026, along with a cash flow forecast to 30 June 2027. The report also covered rebalancing activity undertaken during the quarter, including the transfer of holdings in two CBRE assets to BCPP.

Performance Measurement of Pension Fund Investments to 30 June 2026

This report provided an overview of the investment performance of the Pension Fund up to 30 June 2026. It included details on fund managers' benchmarks, total fund performance for the quarter, and for various longer periods, as well as individual fund managers' performance. The report noted that valuations from Northern Trust, the Fund's custodian, did not yet reflect the transfer of two CBRE assets to BCPP Global Core Real Estate due to quarterly asset valuation cycles.

Internal Audit Plan 2026/27 Progress Report to 31 August 2026

This report informed members of the work carried out by Internal Audit during the period 1 April 2026 to 31 August 2026 as part of the 2026/27 Internal Audit Plan. It aimed to provide assurance on internal control systems, advise on areas where controls need improvement, and detail any other audit work undertaken. The report indicated that three assurance audits had final reports issued with Substantial assurance opinions.

Regulatory Update

This report briefed the committee on developments relevant to the Local Government Pension Scheme (LGPS) and other non-LGPS matters. It detailed new LGPS governance, pooling, and investment frameworks that came into effect on 30 June 2026, along with the McCloud remedy implementation. Non-LGPS matters included updates on The Pensions Regulator's strategy and the progress of Pensions Dashboards.

Governance Strategy, Training Strategy and Code of Conduct

This report explained the legislative and regulatory background to the Fund's draft Governance Strategy, Training Strategy, and Code of Conduct. These documents are intended to form a single governance framework, clarifying responsibilities, establishing knowledge and understanding expectations, and setting behavioural standards. The report proposed a consultation process for these drafts before final approval.

Independent Person Selection Process

This report sought approval to commence a procurement and selection exercise to appoint an Independent Person to support the Pension Fund Committee and LGPS Senior Officer. The role is a legal requirement under the LGPS (Amendment) (Governance) Regulations 2026 and aims to provide independent expertise and challenge. The report outlined the proposed scope, principles, and delegated authority for the appointment.

Pooling Update

This paper updated the committee on Border to Coast's preparations for the strengthened LGPS pooling framework, explaining the implications for investment implementation and oversight. It highlighted the evolution of BCPP's investment implementation model, governance arrangements, customer strategy, and approach to local investment, emphasizing the continued focus on strategic decisions by Pension Committees and implementation by the Pool.

The following items were scheduled for discussion in Part B of the meeting, during which the press and public were to be excluded due to the likely disclosure of exempt or confidential information: The Minutes of the Meeting held on 11 June 2026, Report of the Pension Fund Adviser, Report of the Independent Investment Adviser, Annual Review of Private Markets, Border to Coast Pensions Partnership Update Presentation, Border to Coast Pensions Partnership Quarterly Performance Report, Report of Alliance Bernstein, Report of CBRE Global Investment Partners, Report of Foresight, and Report of LGIM.