The Gloucestershire Pension Committee met on 18 September 2025, to discuss the fund's performance, audit and climate-related financial disclosures. The committee noted the progress of the pension fund audit, reviewed climate transition analytics, approved the fund's Taskforce for Climate Related Financial Disclosures (TCFD) report, and discussed governance and operational updates, as well as funding and investment matters.

Here's a detailed look at the key discussion points:

• Brunel Pension Partnership and LGPS Central Limited merger
• Pension Fund Audit & Financial Statements 2024-25
• Climate Change and Net Zero Targets
• Pension Fund Annual Report 2024-25
• Taskforce for Climate Related Financial Disclosures Report 2024-25
• Governance & Operations
• Funding & Investment

Brunel Pension Partnership and LGPS Central Limited merger

The committee discussed the government's instruction for the Brunel Pension Partnership to merge with another Local Government Pension Scheme (LGPS) pool, as part of the Fit for the Future consultation¹. The Head of Pensions explained that no rationale had been given as to what criteria the Brunel Pension Partnership had not met. Councillor Colin Hay, Deputy Leader & Cabinet Member for Finance, Assets & Transformation, felt that pooling was a substantial risk to the fund and requested officers to incorporate this into the risk register.

Pension Fund Audit & Financial Statements 2024-25

The committee reviewed the draft Audit Findings Report (AFR) from KPMG regarding the 2024-25 pension fund audit. Nigel Gabb, Strategic Pensions Manager -Investment & Accounting, noted that there were no identified audit misstatements. However, the audit was not yet complete, with some items still outstanding, including:

• Completion of work on Level 2 & 3 Pooled Investment Vehicles (PIV) receipt of requests and finalization of valuation differences
• Completion of work on disclosures --- receipt of responses to queries (i.e., FVH, investment risks, commitments)
• Completion of work on membership data --- receipt of requests (i.e., contribution returns)
• Completion of work over period end and post-closing journals in respect of completeness
• Receipt of responses and supporting documentation over investment fees and lump sums
• Receipt of responses to queries on investment transactions and confirmation
• Review of the updated draft financial statements
• Continued update of risk assessment procedures
• Completion of Partner and Manager review and quality control procedures

KPMG highlighted control weaknesses in the current SAP system related to access levels, segregation of duties, and the ability to post journals without transaction descriptions. A new SAP system is under development and is expected to be operational in early 2026. The committee was asked to note the Draft Audit Findings Report provided by KPMG for the year to 31 March 2025 and that the Pension Fund Financial Statements for 2024-25 are commended to the Audit & Governance Committee.

Climate Change and Net Zero Targets

The committee reviewed the annual Analytics for Climate Transition (ACT) analysis, which assesses the fund's progress toward its net zero commitments. These commitments include achieving net zero emissions by 2045, a 50% carbon reduction by 2030, allocating 30% of the fund to sustainable assets by 2025, and decarbonisation targets for listed equities and corporate bonds.

The key findings of the analysis were:

• The fund's listed equity and corporate bond portfolios are ahead of the decarbonisation pathway.
• Good progress has been made on alignment and climate solutions.
• It is too early to set net zero targets for private markets due to insufficient data.

Since the 2020 baseline, the carbon footprint of listed equities has decreased by 64.2%, and bonds have decreased by 41.0% since the 2021 baseline. The fund is estimated to be ahead of its target of allocating 30% of the total fund to sustainable and low-carbon assets by 2025, with approximately 31% already allocated.

The committee was asked to note the progress on the Funds net zero commitments.

Pension Fund Annual Report 2024-25

The committee considered the draft statutory annual report of the Pension Fund for 2024-25, which includes information on management, financial performance, investment policy, administration arrangements, and a statement from the fund's actuary. The report also includes a provisional draft of the Pensions Board Report for 2024-25, pending approval by the Pensions Board in October 2025. The committee was asked to note the Pension Fund Annual Report 2024-25 and, subject to any feedback, delegate final approval of the Annual Report to the Chair of the Pensions Committee.

Taskforce for Climate Related Financial Disclosures Report 2024-25

The committee reviewed the Taskforce for Climate Related Financial Disclosures (TCFD) Report for 2024-25, which provides an update on actions taken by the fund to support the transition to a low-carbon economy and manage climate risks. The report covers governance, strategy, risk management, and metrics and targets, and reflects the fund's commitment to transparency and responsible investment. The committee was asked to approve the Fund's TCFD Report for 2024-25 and, subject to any feedback, delegate final approval to the Chair of the Pensions Committee.

Governance & Operations

The committee received an update on governance and operational matters, including employer updates, the LGPS Access and Fairness consultation, the Pension Schemes Bill, and the risk register. The committee noted the draft Pension Board minutes of 19 March 2025, the Risk Register, and the governance and operational updates provided in the report. The committee also agreed to delegate the response to the LGPS Access and Fairness Consultation to the Chair of Pensions Committee.

Funding & Investment

The committee was updated on matters relating to the funding and investment performance of the fund. The Fund's total market value had increased by £143.927m, to £3,728.084m. Over the previous 12 months, total Fund assets underperformed the strategic benchmark by 0.3%, with a return of 6.8%. Performance over the 3 years to 30 June 2025 was 8.0% annualised, which equals the strategic benchmark. The committee noted the fund's position at 31 March 2025, including the investment performance as detailed in the report. Members were also advised of the Fund's funding position, market value, asset allocation, investment performance for the quarter ending 31 March 2025. It was noted the provision of this information to the Committee was important in ensuring the Committee discharged its responsibilities with regard to the governance of the Fund.