The Hertfordshire County Council Local Government Pension Scheme Local Pension Board met on 7 November 2025, for a virtual meeting. The board noted updates on IT security risks, the pension fund statement of accounts, and a report on responsible investment. They also noted the dates of future meetings.

IT Security Risks

Following concerns raised at the last meeting, officers reviewed risks E4 and E5 in collaboration with the LBPH chief technology officer and with reference to the pensions regulator guidance. Risk E4 concerns data sharing controls, and has been updated to reflect strengthened training certifications and data handling protocols. The risk level tolerance of both increased to a nine, made up of a possible likelihood of three and moderate impact score three. Risk E5, which relates to IT security breaches, has been revised in light of the regulator's view that such risks are a matter of when and not if enhanced controls are in place, but the risk level on tolerance have increased to level 16, a probable likelihood level four and major impact level four.

A board member, Gail Johnson, asked for clarification on risk E5, and whether the probability related to a cyber attack on the LPPA, or members data being compromised. Taryn Ahlberg, Pensions Governance Manager, confirmed that:

the pensions regulator view it as probable that there will be, um, a cyber attack on LPPA at some point because it's just so common, um, now and the, uh, hackers, et cetera, are getting clever and cleverer and it's, you know, it's almost some hackers jobs, isn't it?

The board noted the update on risks E4 and E5.

Pension Fund Statement of Accounts

Robert Winterton, the finance manager for the fund, presented an update on the pension fund statement of accounts for the financial year 2024/2025, in preparation for publishing the annual report on 1 December 2025. The draft accounts published on 30 June 2025 showed a value of £6.4 billion, with a subsequent increase of around £7.8 million. Pantheon, the private equity manager, increased by £4.6 million, and Macquarie, the infrastructure debt manager, increased by £3.2 million.

Table 1 in the report shows the current valuation dates of all investment managers. Patria, previously known as standard life, has a valuation report date of 31 December 2024, as the fund is reported annually. KPMG were expected to finish their field testing work by the end of October, but this has been delayed due to leave. They anticipate presenting their findings in accordance with the ISA 260 at audit committee on 4 December. If this occurs, a paper will be brought to the pension board for noting. The deadline for audit sign off is 27 February 2026, with an audit committee meeting scheduled for 12 February 2026 if needed.

Gail Johnson asked whether future annual reports would contain a set of accounts that has been audited and signed. Robert Winterton confirmed that from the financial year beginning 2028, the deadline will revert to 31 May, with audit sign off by 30 June, meaning the annual report would have a signed copy of the audit report.

Another board member, Jolyon Adam, asked about the separation of the fund accounts from the administering authority. Robert Winterton responded that a consultation had finished, and they were awaiting a government response on the proposal.

Sharon Moore thanked Robert Winterton for the training ahead of the session, which helped her to understand the report.

The board noted the content of the report and attached appendix.

Responsible Investment Report

Sandy Dickson from Mercer presented the fund responsible investment report. She explained that climate risk has been identified as a major systemic risk in the risk register, with wide reaching implications for the fund. The fund has set a long-term net zero target to be net zero in its investment assets by 2050 or sooner, in line with the UK and other developed nations. To help achieve this, the fund has set interim targets for its listed equity portfolio, due to the quality of data and its large portion of investment assets. The ongoing emissions intensity reduction target is 43% by 2030 against a 2020 baseline. The report monitors the progress of the fund's assets against these targets.

The report included listed equities and listed bonds, representing around 60% of the portfolio. Illiquid private markets and properties were excluded due to data quality issues. Slide 68 summarised the fund's progress, noting that the fund's listed equities are 28% more efficient than the wider market. The fund has made progress towards its 2030 target but is slightly behind the IPCC curve¹. The report also assessed companies' alignment to the carbon transition using a gray to green scale, with gray companies being highly intensive in greenhouse gas emissions and having low capacity to transition. The fund has lower allocations to these assets. Improvements were seen in forward looking metrics such as the Science Based Targets Initiative (SBTI)² and implied temperature rise. Climate solutions, defined using the EU taxonomy³, have also increased over the year.

Slide 70 showed that the fund was almost twice as efficient as the wider universe in 2020, but has not made as much progress in decarbonising. Slide 71 showed that the fund is slightly behind target, with strategic decisions such as allocating to a value manager in 2022 increasing emissions. However, recent committee decisions to move towards climate aware funds have led to real improvement.

Slide 73 looked at listed bonds, noting that while the fund does not have a target for decarbonising its listed bond allocation, it is important to monitor progress. The bonds would be slightly ahead of the 43% reduction target by 2030 if it existed.

A board member asked about the possibility of looking at properties and other assets in the future. Sandy Dickson responded that there is detailed work going on across the industry to standardise how private companies and property display and communicate data. Property is challenging because the ongoing energy use is the responsibility of the underlying tenant, but this is improving. Private equity and private markets are slightly behind, but better data is expected in the next few years.

The board noted the content of the report and attached appendix.

Dates of Future Meetings

The board noted the dates of future meetings: 12 December 2025 (virtual), 5 February 2026 (pensions committee meeting), 13 March 2026, and 16 July 2026.

Patrick Towey explained that the February meeting is to approve recommendations to full council regarding joining the border to coast investment pool. The meeting will also include a review of the draft responsible investment policy and investment strategy statement.