The Pension Fund Committee meeting scheduled for 12 March 2026 was set to cover a comprehensive review of the Pension Fund's investments, financial performance, and audit progress. Key discussions were anticipated regarding the overall value and performance of the fund's investments up to December 2025, alongside the approval of accounting policies and the treasury management services for the upcoming financial year.

Overall Value of Pension Fund Investments

The committee was scheduled to receive an update on the overall value of the Pension Fund's investments as of 31 December 2025. The report indicated that the fund's value stood at £4.074 billion, an increase of £87 million from the previous quarter. The report also detailed the movement in the cash balance during the quarter and provided a cash flow forecast to December 2026. It was noted that no asset classes hit the trigger point for rebalancing during the quarter, though £25 million was withdrawn from the Legal and General (LGIM) fund to replenish the cash balance. The fund also transferred holdings in two CBRE assets to Border to Coast Pensions Partnership (BCPP) to fund an additional subscription to the BCPP UK Real Estate Fund.

Performance Measurement of Pension Fund Investments

A review of the Pension Fund's investment performance up to 31 December 2025 was scheduled. The report from Northern Trust, the Fund's custodian, was to provide details on the performance of the five fund managers against their personalised benchmarks. This included performance data for the quarter, as well as for the last one, three, five, and ten years, and since inception. The overall fund performance for the quarter was reported as 0.51%, with a total fund value of £4,073,808,425.

Pension Fund Audit Progress Report 2025/26

The committee was to be updated on the progress of the 2025/26 Internal Audit Plan. As of 28 February 2026, final reports had been issued for two audits: Pension Fund Investments, which received a Substantial assurance opinion, and Pension Fund Payroll, also receiving a Substantial opinion. Other audits, including Pension Fund Governance Arrangements and Pension Fund Cyber Security, were deferred or in progress.

Pension Fund Draft Internal Audit Plan 2026/27

A proposed Internal Audit Plan for 2026/27 was presented for approval. This plan was developed following discussions between Internal Audit and officers responsible for the Pension Fund, using the strategic audit plan and risk assurance map as a basis. The proposed plan included assurance audits for Governance Arrangements, Cyber Security, Data Management, Business Continuity, Tax Controls, and Transfers In/Out Contributions. Advisory services were also included. The estimated fee for the 2026/27 internal audit plan was £20,000.

Agreement of Accounting Policies for Application in the 2025/26 Financial Statements

The committee was asked to review and approve the accounting policies for the 2025/26 financial statements of the Pension Fund. The report indicated that the material accounting policies applied in the 2024/25 statements remained appropriate, and that changes to the CIPFA code for 2025/26 did not impact the Pension Fund Accounts. The report detailed the accounting policies for contributions receivable, transfers to and from other schemes, pension benefits payable, management expenses, investment income, taxation, valuation of investments, cash and cash equivalents, contingent assets and liabilities, and investment transactions.

Provision of Treasury Management Services

The committee was to review the treasury management services provided to the Pension Fund for 2026/27. It was recommended that the Pension Fund continue to invest its cash balances with Durham County Council, with interest paid quarterly based on the daily cash balance and the 3-month rate of return earned by the Council. An administration fee of £3,355 per quarter was proposed for these services. The arrangement for sharing the risk of investment loss in proportion to the value of cash balances was also recommended to continue.

Pension Fund Committee Review of Terms of Reference

A review of the Terms of Reference for the Pension Fund Committee was scheduled. The report stated that the existing Terms of Reference clearly defined the responsibilities of the Committee and remained relevant and fit for purpose. It was recommended that the Committee provide any comments, authorise the Corporate Director of Resources to publish the Terms, and agree that they continue to be reviewed at least annually. The report also noted that the Terms would need to be revisited following the implementation of the Pension Schemes Bill and the 'Fit for the Future' changes to the LGPS.

Regulatory Update

This report briefed the committee on developments in LGPS-specific matters and other relevant pensions news. Key LGPS updates included the government's response to the 'LGPS Access and Fairness' consultation, which confirmed the progression of almost all proposed changes, including survivor benefits, death grants, and gender pension gap measures. The report also detailed the LGPS 'Fit for the Future' technical consultation and the government's confirmation to extend LGPS access to councillors and mayors in England. The McCloud judgement and its ongoing implementation were also discussed, along with updates from the LGPS Scheme Advisory Board. Non-LGPS specific matters included an update on the Pensions Dashboards Programme, which had seen its connection deadline extended to 31 October 2026.

LGPS 'Fit for the Future' Implementation

This report provided an overview of the changes arising from the Pension Schemes Bill and draft 2026 LGPS Regulations, and their impact on the Fund's investment arrangements and relationship with Border to Coast Pensions Partnership (BCPP). The new framework formalises the requirement for administering authorities to work through a single pool, with BCPP responsible for investment implementation. The report outlined revised roles and responsibilities for the Pensions Committee, Senior LGPS Officer, Local Pension Board, and BCPP. It also detailed the requirements for Independent Governance Reviews (IGRs) and fund-specific implementation needs, including updates to governance documents and the Investment Strategy Statement. The transition to the new operating model, including the Investment Management Agreement (IMA) with BCPP, was also discussed.