The Local Government Pension Scheme Local Pension Board is scheduled to meet on Friday 6 November 2026 to review a range of reports concerning the fund's strategy, investments, and financial statements. Key discussions are expected to cover updates on strategy and policy, cashflow modelling, the draft investment strategy statement, and the pension fund's statement of accounts.

Strategy & Policy Update Report

The Board is scheduled to receive an update on changes to several key policies following a review. These include the Communication Policy, Discretions Policy, and Conflict of Interest Policy. Additionally, two new policies are set to be presented, developed in response to new requirements under the Fit for the Future regulations: a Training Strategy and a Data Improvement Strategy.

The Communication Policy has been reviewed and streamlined, focusing on how the Fund and its administrator, LPPA, communicate with stakeholders. The Discretions Policy has seen minor amendments for clarity, with the discretion regarding the publication of an Administration Strategy removed as it is now a statutory requirement. The Conflict of Interest Policy has been updated to reflect the inclusion of the LGPS Senior Officer and Border to Coast Pensions Partnership. The Training Strategy aims to ensure all individuals with responsibilities to the Fund meet knowledge and understanding requirements, while the Data Improvement Strategy outlines how the Fund monitors data improvement.

Pension Fund Cashflow Modelling

A report on pension fund cashflow modelling, prepared by Howden, is scheduled for discussion. This modelling, undertaken as part of the 2025 actuarial valuation, assesses the Fund's expected future cashflow position under various scenarios, including changes in payroll levels, Local Government Reorganisation (LGR), and inflation. The analysis aims to help officers, the Pensions Committee, and the Local Pension Board understand the Fund's current and potential future cashflow position and manage associated risks.

The modelling indicates that employer contribution reductions from the 2025 valuation will significantly impact the Fund's net cashflow. Excluding investment income, the Fund is projected to remain cashflow negative throughout the projection period, with annual negative cashflow increasing over time. While allowing for investment income, the base scenario projects a positive net cashflow, but highlights an increasing reliance on investment income to maintain this position. Alternative scenarios, particularly those involving payroll reductions, suggest periods of negative net cashflow even after accounting for investment income.

Draft Investment Strategy Statement

The Board is invited to review a draft Investment Strategy Statement (ISS) before it is issued for consultation with scheme employers and member representatives. This draft has been prepared to comply with the Local Government Pension Scheme (Pooling, Management and Investment of Funds) Regulations 2026, which mandate the maintenance and publication of an ISS. The statement is based on a template developed by Border to Coast and has been tailored to the Fund's specific investment arrangements and objectives. The Fund's Responsible Investment Policy, agreed in July 2026, remains unchanged and is attached for reference.

Pension Fund Statement of Accounts

An update on the Pension Fund's Annual Report and Statement of Accounts for 2025/26 is scheduled for discussion. The draft accounts, including the Pension Fund's statement of accounts extract, were published on 29 June 2026, in line with the regulatory deadline. The report shows a net asset value of £7,086 million for the scheme as of 31 March 2026. Further adjustments are pending agreement with the Fund's auditors, KPMG LLP, regarding updated investment manager valuations. The report details the valuation hierarchy of investments, with Level 3 assets (such as property, private equity, and infrastructure debt) representing a significant portion of the Fund's value. The finalisation of the audit and the signing of the accounts are anticipated in December 2026.

Border to Coast Governance

The Board will receive an overview of the governance arrangements within Border to Coast Pensions Partnership (the Pool) and how these interact with the Hertfordshire Pension Fund's governance framework. The report aims to clarify the roles of the Fund, the Pool, the Joint Committee, officers, shareholders, and the Border to Coast board, highlighting the mechanisms for accountability and oversight. It will also cover the outcomes of shareholder voting at the Annual General Meeting on 15 July 2026 and upcoming shareholder matters for 2026/27. The governance framework ensures a separation of responsibilities, with administering authorities retaining control over funding strategy and strategic asset allocation, while delegating implementation to the Pool.

Investment Performance and Funding Update Report

An update on the Pension Fund's investment performance and funding level as at 30 June 2026 is scheduled. The overall investment performance for the quarter was 5.3%, underperforming the benchmark of 6.5%. However, this quarterly performance exceeded the discount rate assumption of 5% used in the 2025 actuarial valuation. The approximate updated funding level as at 30 June 2026 is 118.0%, indicating a surplus of £1.13 billion. The report details the performance of individual investment managers against their benchmarks and provides an update on the Fund's liabilities and assets rolled forward from the 2025 valuation.

Dates of Future Meetings

The Board is invited to note the dates of future meetings, scheduled for 11 December 2026, 5 March 2027, 16 April 2027 (informal), and 18 June 2027.