The Hertfordshire County Council's Local Government Pension Scheme Local Pension Board met on 10 October 2025, for a virtual meeting, during which they reviewed employer risk and governance, the performance of the Local Pensions Partnership Administration (LPPA), the pension fund's risk register, and investment performance. The board noted the reports and provided comments.

Employer Risk and Governance

The board reviewed the Employer Risk and Governance report, which provided a quarterly update on employer risk and performance for the pension fund, covering the period from 1 April to 30 June 2025. The report detailed the current status of risk monitoring of scheme employers and the performance of the administering authority against performance indicators.

Scheme employers are monitored monthly and rated as red (high risk), amber (medium risk), or green (low risk), depending on their potential impact on the pension fund. As of 30 June 2025, there were nine employers in the red risk category, an increase of two since the last quarter. However, the report clarified that only six of these were true red risks, with the remainder being an amalgamation of green or amber risks.

The report also provided an update on outstanding admission agreements¹, noting that the fund had received four new applications for admission during the quarter.

LPPA Performance Report

The Hertfordshire LGPS Q1 2025/26 LPPA Performance Report was presented to the board, offering an update on performance during the first quarter of 2025/26, along with more recent activity in the second quarter. The report included an executive summary, updates on projects such as the McCloud remedy², LPPA's Efficiency and Service Improvement Programme, the Data Project, and the Pensions Dashboard³. The report highlighted that LPPA had exceeded targets for total active and deferred annual benefit statements (ABS), including those related to the McCloud remedy. The board also received updates on employer monthly returns, the employer focus group, and complaints, appeals, and breaches.

Pension Fund Risk Register Report

The board received an update on the Hertfordshire LGPS Risk Register for the period April to June 2025. The report outlined the pension fund's approach to managing identified risks, in line with the updated Risk Management Policy approved by the Pensions Committee on 7 July 2025. The policy was updated to reflect the requirements of The Pensions Regulator's (TPR) General Code of Practice.

The updated policy places greater emphasis on risk ownership and reinforces the importance of risk management as a key component of fund governance. Risks are grouped under five overarching categories, as defined by TPR's Code of Practice: the governing body, risk management, funding and investment, additional investment matters, and administration and payment of benefits.

The Risk Dashboard highlighted four risks currently assessed as exceeding the tolerated risk threshold, with three having experienced an increase in their risk scores. These included skills or knowledge gaps at the administering authority, ineffective investment decision-making, and poor administration, including failure/delays in implementing regulatory changes.

Investment Performance Report

The Investment Performance Report as at 30 June 2025, prepared by Mercer, was presented to the board. The report indicated that the overall investment performance of the pension fund for the quarter was 3.2%, underperforming against the fund's benchmark of 3.9%. The fund's investments also underperformed the benchmark over the one-year and three-year periods, but outperformed over the five-year and ten-year periods.

During the quarter, five of the fund's investment manager mandates outperformed against their benchmark: Baillie Gifford (Global Equity), Robeco (Emerging Markets Equity) and UBS (Global Climate Aware Equity); Bluebay (Multi-Asset Credit); and LGT (Alternatives). Ten of the fund's investment manager mandates underperformed against their benchmark during the quarter: Dodge & Cox (Global Equity), Robeco (Quality Equity), UBS (Overseas Equity) and Osmosis (Core Equity); UBS (Index-Linked Gilts) and RLAM (Core Plus Bonds); CBRE (Property); LGIM (High Lease Value and Private Rental property) and M&G (Private Rental property). The fund's Equity Protection mandate through Insight and the fund's Private Equity managers also underperformed against their benchmarks.