The Aberdeen City Council Pensions Committee and Pension Board met on 12 September 2025, to discuss the North East Scotland Pension Fund (NESPF). Key items included noting the external auditor's report, approving the audited annual report and accounts, and agreeing to extend the implementation phase of the McCloud remedy for certain members.

NESPF Annual Audit Report

The committee reviewed the North East Scotland Pension Fund Annual Audit Report and Covering Letter, which summarised the findings from the 2024/25 annual audit. Anne MacDonald, Senior Audit Manager, External Audit, presented the report, which concluded that the accounts were free from material misstatement and that the fund had broadly effective arrangements in place to secure best value.

The report noted that governance could be further strengthened if the long-term vacancies in the membership of the Pensions Committee were filled.

The committee resolved to note the report.

Audited Annual Report and Accounts

The committee considered and approved the Audited Annual Report and Accounts for the North East Scotland Pension Fund (NESPF). Jonathan Belford, Chief Officer – Finance, thanked the team for their work in preparing the accounts.

The committee resolved to:

• note that officers would look to provide clarity around the management expenses in future reports, in relation to page 68 of the report
• note that officers could provide data on benchmarking of the Fund performance with other Funds outwith the meeting, but with the caveat that the figures were not necessarily comparing like for like due to different investment strategies, in relation to a query from Members
• note that officers would look into the significantly higher figures for private equity management fees further with the Accounting team and provide clarity to Members outwith the meeting via service update, in relation to a query highlighting the significantly higher figures for private equity management fees
• approve the recommendations within the report

Strategy Update

The committee considered a report by the Chief Officer – Finance, which provided various updates and recommendations to changes to the North East Scotland Pension Fund.

The report provided an update on:

• the Pension Fund Annual Benefit Statements
• amendments to the Local Government Pension Scheme (Scotland) Regulations 2018
• the Pension Board, its annual report and details of the newly appointed Chair (Alan Walker) and Vice Chair (Councillor David Gordon)
• Mental Health Aberdeen and Robert Gordon's College exiting the Scheme

The report advised that the following documents had also been updated:

• Appointment of Advisers
• Governance Compliance Statement

The committee resolved to:

• note that officers would share a copy of the submission with Members, in relation to the impact of the amendments to the Local Government Pension Scheme
• note that officers could discuss with authorities such as the Scottish Public Pensions Agency and Central Government any potential changes to regulations which would be helpful to the Scheme, noting for example that it could be a more expensive scheme for employers to participate in
• approve the recommendations within the report

McCloud Remedy Determination

The committee considered a report by the Chief Officer – Finance, which provided an update on the Fund's decision to exercise its flexibility under the Local Government Pension Scheme (Remediable Service)(Scotland) Regulations 2023 to make a determination to extend the implementation phase of the McCloud Remedy to 31 August 2026.

The report recommended that the Committee note the contents of the report for reassurance, which they resolved to do.

Investment Strategy

The committee considered a report by the Chief Officer – Finance which provided an update with regard to the Principles for Responsible Investment (PRI) submission.

The report recommended that the Committee note the contents of the report for assurance, which they resolved to do.

Asset and Investment Manager Performance Report

This item was considered with the press and public excluded from the meeting.

The committee considered a report by the Chief Officer – Finance which set out the investment activity of the North East Scotland Pension Fund for the three month period ending 30 June 2025.

The committee resolved to:

• note that officers would look to reduce the number of acronyms used in future reports
• note that officers would look to include data on annual performance, as well as quarterly in future reports, in relation to the tables on page 272 of the agenda
• note that the Investment Manager would liaise with Councillor Duncan Massey outwith the meeting to discuss some of detail in respect of page 273 of the agenda
• note that officers would update Members as this matter progressed, in relation to page 284 of the agenda
• note the report