The Pension Fund Committee for Durham County Council convened a meeting to address various items, including the overall value and performance of pension fund investments, updates on regulatory matters, and a review of key policy documents. The committee also planned to discuss the internal audit plan and the pension fund administration strategy. Some of these items were scheduled to be discussed in private due to the confidential nature of the information.

Overall Value of Pension Fund Investments

The committee was scheduled to receive an update on the overall value of the pension fund investments as of 30 June 2025. The report, prepared by Paul Darby, Corporate Director of Resources, was expected to include:

• The overall value of the Pension Fund's investments at 30 June 2025
• The movement in the cash balance during the quarter
• Actual cash flows for the period 1 January 2025 to 30 June 2025, along with a cash flow forecast to 30 June 2026
• Rebalancing activity undertaken during the Quarter, 1 April - 30 June 2025

The report noted that the overall value of the fund at 30 June 2025 was £3.843 billion, and the cash balance held in the Durham County Council Pension Fund bank account was £24.005 million. Fund managers also held cash of £8.523 million at that date.

The report also noted that during July 2025, £10 million was drawn down from Global Equity Alpha to replenish working cash balance requirements.

The report included a table highlighting the fund balance by fund manager and asset class as of 30 June 2025:

*Not within scope of rebalancing

Performance Measurement of Pension Fund Investments

The committee was scheduled to review a report providing an overview of the investment performance of the Pension Fund to 30 June 2025. The report, produced by Northern Trust, the Fund's custodian, included:

• The fund managers' benchmarks
• The total fund performance for the quarter to 30 June 2025, plus the last 1, 3, 5 and 10 years and since inception
• Individual fund managers' performance in absolute and relative terms against the relevant benchmarks, for the quarter to 30 June 2025, plus the last 1, 3, 5 and 10 years and since inception

The report included a table summarising the investment hierarchy:

Internal Audit Plan 2025/26

The committee was scheduled to be updated on the progress of the Internal Audit Plan for 2025/26. The report from Tracy Henderson, Chief Internal Auditor and Corporate Fraud Manager, was expected to inform members of the work carried out by Internal Audit between 1 April 2025 and 31 March 2026.

The report included a summary of the approved audit plan, with the status of each audit:

Regulatory Update

The committee was scheduled to receive a briefing on developments in matters specific to the Local Government Pension Scheme (LGPS) and other relevant non-LGPS matters. The report from Paul Darby, Corporate Director of Resources, was expected to cover:

• Levelling Up White Paper – LGPS Local Investment Plans
• MHCLG Consultation – LGPS: Next Steps on Investments
• HM Treasury – Pensions Review – Terms of Reference: Phase One
• LGPS 'Fit for the Future' Consultation
• LGPS 'Access and fairness' Consultation
• Review of the LGPS 2022 Fund Valuations and looking ahead to 2025 Valuation
• Mandatory TCFD Reporting¹
• Cost Control Mechanism & Review
• McCloud²
• MHCLG Consultation – LGPS: Fair Deal – Strengthening Pension Protection
• MHCLG consultation – LGPS: Changes to the Local Valuation Cycle and the Management of Employer Risk
• Ongoing Consultation – Guaranteed Minimum Pensions (GMP)
• Changes to the LGPS Revaluation Date and Lifetime Allowance
• Department for Education (DfE) Guarantee
• LGPS Scheme Advisory Board (SAB)
• Non- LGPS Specific Matters

Pension Fund Administration Strategy

The committee was scheduled to review the Pension Fund's Administration Strategy. The report from Paul Darby, Corporate Director of Resources, was expected to provide an overview of the strategy and summarise its key aspects.

The Administration Strategy outlines the policies and performance standards adopted by the Fund in the delivery of its pensions administration services. It is designed to enable Scheme Employers and the Pension Fund to work collaboratively, ensuring compliance with statutory obligations, whilst providing a cost effective, transparent service to scheme members.

The report included the following recommendations:

• Note the report and provide any comments on the approach set out in the Strategy.
• Delegate authority to the Head of Pensions to implement the Strategy, taking into account feedback of Scheme Employers and Local Pensions Board, and to keep the Strategy up to date.

Review of Pension Fund Policy Documents - Funding Strategy Statement

The committee was scheduled to review the Pension Fund's key Policy Documents, primarily the Funding Strategy Statement (FSS), as well as the Investment Strategy Statement (ISS). The report from Paul Darby, Corporate Director of Resources, noted that both documents are reviewed periodically, with the FSS reviewed at least triennially, and the ISS at least annually.

The report included the following recommendations:

• Review the content of the draft FSS and provide any comments on the current version
• Note the content of the ISS currently in place and provide any comments on the current version
• Authorise the Head of Pensions to consult the Fund's employers (and other appropriate consultees) on the provisions of the draft FSS and agree to receive a finalised version in December
• Authorise the Head of Pensions to keep the ISS up to date

The draft FSS, included as an appendix to the report, sets out Key Funding Principles for adoption by the Fund, including the Funding Target, Management of Risk, Main Actuarial Assumptions, Setting of Employer Contributions and Monitoring of Employer Covenant. It also includes links to the Fund's other Key Policy documents.

Exclusion of the Public

The agenda included a resolution relating to the exclusion of the public during the discussion of items containing exempt information.