The Hertfordshire County Council Pensions Committee met on 26 September 2025 to discuss employer risk and governance, performance reports, and the pension fund risk register. The committee noted the contents of several reports, including the Hertfordshire Local Government Pension Scheme (LGPS) and Fire Pension Scheme (FPS) Q1 2025/26 LPPA Performance Report, and the Investment Performance Report as at 30 June 2025. The committee also moved into a closed session to discuss specific investment matters and due diligence.

Employer Risk and Governance

The Employer Risk and Governance report for April to June 2025, presented by Alison Sharpe, Lead Pensions Governance Officer, highlighted risks linked to individual employers within the fund. The number of 'red risks' increased from seven to nine during the quarter, although Alison Sharpe clarified that only six were genuine red risks, relating to ceased employers with outstanding deficits and employers without indemnity arrangements in place. Fund officers are collaborating with Barnett Waddingham¹ to analyse admitted bodies and find ways to minimise risks. Councillor Ian Albert, Vice-Chair Pensions Committee, asked about possible solutions for indemnity arrangements, and Alison Sharpe explained that while some older employers aren't obliged to have such arrangements, the fund approaches them to agree on solutions. The committee noted the contents of the report.

LPPA Performance Report

John Crowhurst, Chief Customer Officer at LPPA, presented the Hertfordshire LGPS and FPS Q1 2025/26 LPPA Performance Report, covering April to June. Overall performance was positive, with most service level agreement (SLA) targets met. John Crowhurst noted that member satisfaction was generally higher for deferred members (around 70%) than active members (around 55%), and that satisfaction correlated with how quickly people were paid after retirement. He also highlighted that only 39% of retirement notifications were received on time between April and June, an increase from 22% in the previous quarter. LPPA is considering one-to-one service review meetings with larger employers to improve this.

John Crowhurst also mentioned that LPPA is launching an employer satisfaction survey in Q3 and that the numbers in the data project update look scary, but the data quality is actually in a really good position.

Taryn Ahlberg, Pension Governance Manager, added that LPPA had made the council aware of an issue with the pensions dashboard, and that the council would be notifying the Pensions Regulator (TPR) of the delay.

Councillor Ian Albert welcomed the work of the complaints board and suggested a visit to LPPA's offices in Preston for committee members. Councillor Matthew Hurst raised concerns about retirement notifications, with John Crowhurst and Taryn Ahlberg responding that they were working to raise awareness with employers. Councillor Stuart Roberts raised concerns about call centre performance, and John Crowhurst responded that they were looking at ways to improve the service. Councillor Adrian England, Executive member for Sustainability, asked about financial hardship, and John Crowhurst confirmed that there was a mechanism for prioritising cases where members were in financial hardship. The committee noted the report.

McCloud Remedy

John Crowhurst reported on remedy activity for both the Local Government Pension Scheme (LGPS) and the Fire and Rescue Service schemes, stating that 70% of records had been assessed to identify who requires an underpin calculation². He confirmed that payments to members of the fire service scheme had commenced in September, with the aim to have all 27 members paid by the end of November.

Pensions Dashboard Delay

John Crowhurst informed the committee of a potential delay in connecting to the pensions dashboard ecosystem, due to issues with Civica's testing. He reassured members that this would not impact members at this stage, as the live launch to members is not expected until late 2026 or early 2027. Taryn Ahlberg confirmed that LPPA had made the council aware of the issue and that they would be notifying the Pensions Regulator (TPR) of the delay. The committee agreed to inform the regulator of the position.

Pension Fund Risk Register Report

Taryn Ahlberg presented the Pension Fund Risk Register Report, explaining that the risk categories had been significantly revised to align with the Pensions Regulator's general code of practice guidance³. The LGPS and FIRE pension scheme risk register summaries and dashboards have now been separated. The risk dashboard highlighted four risks currently assessed as exceeding the tolerated risk threshold: skills and knowledge gaps, conflicts of interest, ineffective investment decision making, and poor administration. Councillor John Graham raised concerns about IT security, suggesting that the risk of an IT breach should be rated higher. Taryn Ahlberg responded that member data is held by LPPA, who have several accreditations, and that the council has a business continuity plan and is working on a cyber risk policy. The committee agreed to contact LPPA to get their stance on IT security and to consult with experts at Hertfordshire County Council. The committee noted the contents of the report.

Investment Performance Report

Jonathan Crowther from Mercer presented the Investment Performance Report as at 30 June 2025, summarising that the fund had moved ahead by just over £200 million in terms of its asset value. He noted that the fund was overweight in growth and bond sections and underweight in diversifiers, but that this had been addressed by moving into a real asset warehouse⁴. He also noted that protected equities and property had underperformed, while Bailey Gifford had performed well. Councillor Ian Albert questioned when underperformance would affect the five-year performance, and Jonathan Crowther explained the complexities of benchmarking and the impact of strong performance dropping off after five years. He suggested a discussion about the nature of benchmarks and their relevance. Councillor Adrian England asked how the benchmark compared to other ships, and Jonathan Crowther clarified that the benchmark was specific to the fund's asset allocation. Councillor John Graham asked about equity protection, but this was deferred to Part Two of the meeting.

In response to a question about the underperformance of some equity managers, Jonathan Crowther explained that Dodge & Cox were value managers and that their underperformance was not a concern. Patrick Towey added that the composition of equity managers allowed the fund to perform well in different economic cycles. In response to a question about the transition to a new pool, Jonathan Crowther explained that the transition would be a gradual process over three years. Patrick Towey added that there would be a consultative approach and that the focus was on getting the governance piece done by 1 April next year. The committee noted the report.