Agenda and minutes

It was proposed by Mr. D. Grimley CC and seconded by Cllr. G. Whittle:

“That Mr. Phil King CC be elected as Chairman of the Local Pension Committee”.

RESOLVED:

That Mr. P. CC be elected Chairman of the Local Pension Committee until the ate of the Annual Meeting if the County Council in 2027.

Mr. P. King CC – in the Chair

It was proposed by Mr. P. King CC and seconded by Cllr. G. Whittle:

“that Mr. Daniel Grimley CC be elected as Vice-Chairman”.

RESOLVED:

That Mr. D. Grimley CC be elected as Vice Chairman of the Local Pension Committee until the date of the Annual Meeting of the County Council in 2026.

The minutes of the meeting held on 20 March 2026 were taken as read, confirmed and signed.

The Chairman reported that Cllr. Roy Denney had stepped back from his role as District Council Representative on the Committee which he had joined in June 2023. The Chairman and all members of the Committee thanked Cllr. Denney for his commitment and contribution to the Leicestershire County Council Pension Fund.

It was reported that the Chief Executive had not received any questions under Standing Order 32(5).

It was reported that the Chief Executive had not received any questions under Standing Order 32(1).

There were no urgent items for consideration.

The Chairman invited members who wished to do so to declare any interest in respect of items on the agenda for the meeting.

No declarations were made.

The Committee considered a report of the Director of Corporate Resources, the purpose of which was to provide an update on the public market investments the Fund holds with LGPS Central (Central or the Pool). The report also provided an overview of how Central would develop investment solutions to be able to meet a range of client investment strategies and how they would be implemented. A copy of the report marked ‘Agenda Item 8’ is filed with these minutes.

The Chairman welcomed Mr. Louis-Paul Hill and Mr. Mark Davies from LGPS Central, who delivered a presentation as part of this item.

Arising from discussion, the following points were made:

i.          A Member requested details of existing partner funds within the pool together with the additional funds joining LGPS Central be circulated, in order to provide clarity on the new pooling structure. The Chairman also suggested that a briefing note be circulated to Members and made available more widely to explain the changes, including who was now part of the wider pool, as this would be helpful for members of the Committee, the Local Pension Board and other local partners. Officers undertook to prepare a briefing note and arrange for it to be published on the website.

ii.          A Member noted that market performance data inevitably became out of date quickly, particularly in relation to US technology markets, and questioned how recent volatility and valuation concerns might affect future performance. LGPS Central explained that the strength of global markets, and particularly US markets, in recent years had been driven in large part by the growth of large technology companies and the artificial intelligence sector. It was noted that passive investments had benefitted from this trend because they followed the index, resulting in larger allocations to those companies and strong performance.

iii.          A Member commented that the investments appeared to be well diversified. LGPS Central explained that this reflected one of the benefits of the multi-manager fund, which brought together different investment styles and helped to reduce reliance on a single manager or approach. It was noted that this diversification was intended to manage volatility and support more resilient performance over time.

iv.          In response to a question regarding whether the reported returns were before or after charges, LGPS Central confirmed that the figures were shown after fees. Members were advised that public market fees were generally lower than private market fees and that, on an aggregate basis, fees were approximately 20 basis points.

v.          The Committee was advised that the All-World Equity Climate Multi Factor Fund was a passive investment approach which targeted long-term drivers of excess returns, including value, quality, low volatility and smaller companies, while also applying a climate overlay.

vi.          A Member asked why Western Asset was being replaced as a manager within the Global Active Multi-Asset Credit Fund. LGPS Central explained that concerns had arisen regarding historic performance, governance and ESG matters, together with wider issues relating to investigations involving a portfolio manager, not directly connected to this Fund, which had led LGPS Central to review the investment process and culture of the manager. It was noted that wider investor concern had resulted in significant outflows from the manager and that LGPS Central had identified alternative managers which it considered to be stronger.

vii.          In response to a question about whether a change in manager would also require a change in the underlying investments, LGPS Central explained that there would be some overlap in the underlying bonds, but not a complete overlap. The transition would be managed as efficiently as possible and the Fund’s holding would remain  ...  view the full minutes text for item 9.

The Committee considered a report of the Director of Corporate Resources, the purpose of which was to provide an update on progress against the Responsible Investment (RI) Plan 2026, and the Fund’s quarterly voting report and stewardship activities, appended to the report. A copy of the report marked ‘Agenda Item 9’ is filed with these minutes.

The Chairman welcomed Ms. Sheila Stefani from Central, who delivered a presentation as part of this item.

Arising from discussion, the following points were made:

i.          A Member asked how the responses to the RI survey were taken into account, particularly where respondents had placed differing levels of importance on individual RI issues. Central explained that its stewardship approach considered risks across the whole portfolio and across all partner funds. Member feedback was welcomed and would be considered alongside portfolio-level risks, manager conviction and the relative weighting of holdings.

ii.          In response to a question regarding the position on RI following pooling guidance, officers advised that final guidance had now been received. It was explained that the Fund would continue to work with the pool and partner funds to seek consensus where possible, while noting that RI remained within the remit of the Committee. The views expressed through the scheme member survey had been shared with Central and further discussions were ongoing.

iii.          A Member asked for clarification on the voting categories shown in the presentation, including the circumstances in which Central might abstain or record a vote as “other”. Central explained that “other” could relate to administrative voting matters, such as the frequency with which shareholders were asked to vote on executive remuneration. It was further explained that abstention could be used where Central supported the sentiment of a shareholder resolution but considered that the company had already addressed the issue, or had given commitments to do so, although public evidence had not yet been made available.

iv.          A Member referred to the distinction between RI and ethical investment and asked how human rights issues could continue to be pursued through engagement in light of Government guidance on investment decision making. Central advised that its human rights approach was based on the United Nations Guiding Principles on Business and Human Rights, which were consistent with recognised international approaches. Engagement with companies operating in higher-risk areas was described as being focused on due diligence, risk management and business continuity, rather than requiring companies to adopt a particular political position.

v.          A Member raised concern about the extent to which voting on executive pay could affect the Fund’s fiduciary duty to obtain investment returns. Central explained that remuneration votes were considered carefully and that support would be given where pay structures were transparent, appropriately linked to long-term value creation and supported by confidence in the remuneration committee. It was noted that opposition to remuneration proposals would generally arise where there was insufficient disclosure, where the link between pay and performance could not be demonstrated.

vi.          In response to a question, officers advised that the Responsible Investment Plan included an action to communicate with scheme members who had responded to the survey, noting that Central was continuing to review its stewardship approach, and that the Fund’s climate strategy would be brought to the Committee later in the year. A wider communication to scheme members would then be prepared to explain how their views had been taken into account and what stewardship outcomes had been achieved.

vii.          A Member commented that, although not all scheme members responded to surveys, those the Member had spoken to were generally supportive of a responsible investment approach. In response to a  ...  view the full minutes text for item 10.

The Committee considered a report of the Director of Corporate Resources, which provided details on how the Leicestershire County Council Pension Fund (the Fund) managed cash balances following questions arising from the meeting of the Committee on 20 March 2026. A copy of the report marked ‘Agenda Item 10’ is filed with these minutes.

Arising from discussion, the following points were made:

i.          In response to a question, officers confirmed that the Fund remained broadly cashflow positive in terms of pension contributions received compared with pensions paid, although it was recognised that the position was less positive than it had been previously. It was noted that the reduction in employer contribution rates would reduce the level of positive cashflow further, with the position expected to be broadly neutral to positive.

ii.          Members noted that the Fund’s cash exposure was expected to reduce over the coming year. Although the cash balance remained a significant monetary amount, the report explained that it was forecast to reduce to approximately £235 million by 31 March 2027, equivalent to around 3% of total Fund assets.

iii.          A Member queried whether the Fund had set a target for the percentage of assets to be held in cash, and whether the forecast level of around 3% was the intended target. Officers explained that the strategic asset allocation target for cash was currently 0%, but acknowledged that a true zero cash position was not realistic in practice.

iv.          The Committee was advised that, going forward, cash would be considered in two broad categories: operational cash, relating to contributions received and pensions paid, and investment cash, needed to meet private market capital calls. It was explained that only a modest cash balance would be required in the long term, potentially around 0.5% of total Fund assets or lower, but that some cash would remain necessary to manage liquidity efficiently.

v.          Officers highlighted that the Fund had approximately £900 million of outstanding commitments, and that calls on those commitments could be uneven and arise at short notice. It was explained that investment managers might provide only five or six working days’ notice for capital calls, and that several calls could occur at the same time. Holding insufficient cash could therefore require assets to be sold quickly, which might not be in the Fund’s best interests.

vi.          Members discussed whether a 0% cash target remained appropriate, given that a true zero position was not practical. It was suggested that the target could remain an aspiration, provided that the accompanying explanation made clear that a small level of cash would be required for operational and investment purposes.

vii.          It was agreed that further clarification could be included as part of the annual review of the strategic asset allocation, to explain why a small cash balance would continue to be held despite the 0% target allocation.

RESOLVED:

a)    That the report on Cash Management Policy and Forecast be noted.

b)    That the position regarding the cash target allocation and the practical need to retain a small level of cash be considered as part of the annual review of the Strategic Asset Allocation in January 2027.

The Committee considered a report of the Director of Corporate Resources, which provided an update on the investment markets and how individual asset classes were performing, and the total value of the Fund’s investments as at 31 March 2026. A copy of the report marked ‘Agenda Item 11’ is filed with these minutes.

A Member asked, in relation to UK gilts, what the duration of the bonds was. The Strategic Finance Manager explained that the gilts reflected the whole benchmark and therefore covered all durations. He advised that he did not have the average duration figure available at the meeting but undertook to provide the information to Members following the meeting.

RESOLVED:

a)    That the report on the Valuation of Pension Fund Investments be noted.

b)    That information on the durations of UK bonds be circulated to Members.

The Committee considered a report of the Director of Corporate Resources which provided an update on regulatory developments relating to Fit for the Future (FFTF) and governance arrangements and meetings update relating to LGPS Central (Central). A copy of the report marked ‘Agenda Item 12’ is filed with these minutes.

Arising from discussion, the following points were made:

i.          Members referred to the two roles arising from the new governance requirements, namely the Senior LGPS Officer and the Independent Person, and asked what the proposed plan, recruitment process and timetable would be. Officers explained that statutory guidance had recently been issued and was being reviewed. A job description was being drafted for the Senior LGPS Officer role, which would need to be in place by December 2026.

ii.          In response to a question regarding whether the role would be recruited to externally, officers confirmed that this would need to be considered as part of the wider review of the structure. The Chairman requested that the Committee be updated once the position had been finalised, with a further update to be brought to the Committee in September.

iii.          Members discussed the proposed appointment of the Independent Person and asked how the role would operate in practice and whether it would provide scrutiny in relation to items on the Committee’s agenda. Officers explained that the Independent Person would not have voting rights but would be able to express an independent opinion which the Committee could consider.

iv.          A Member asked whether Committee members could be involved in meeting prospective candidates for the Independent Person role. Officers confirmed that, once the role description had been finalised and expressions of interest sought, Members of the Committee who were interested could be introduced to prospective candidates in advance of formal appointment.

v.          A Member suggested that communication be sent to all Members of the Committee to ask whether they wished to be involved in that process. The Chairman requested that officers consider the most appropriate way of facilitating this.

vi.          Members also discussed the requirements for the Independent Person role, including the relevant knowledge and qualifications that might be expected. Officers referred to the need to consider the role description considering the final guidance and confirmed that a briefing note produced by Hymans Robertson would be circulated to Members.

vii.          In response to a question regarding remuneration and where the cost of the Independent Person would fall, officers confirmed that the role would be remunerated and that the cost would be met from the Pension Fund. Officers added that other similar roles and approaches were being considered as part of the development of the appointment process.

RESOLVED:

a)    That the Fit for the Future update report be noted.

b)    That the Committee approved that the Director of Corporate Resources, in consultation with the Chairman of the Local Pension Committee, be authorised to make the final appointment decision of Independent Person, having considered any views expressed by Committee Members.

c)     That communication be circulated to Members of the Local Pension Committee, to introduce them to prospective Independent Person applicants in advance of formal appointment.

The Committee considered a report of the Director of Corporate Resources, the purpose of which was to provide information on any changes relating to the risk management and internal controls of the Pension Fund, as stipulated in the Pension Regulator’s Code of Practice. A copy of the report marked ‘Agenda Item 13’ is filed with these minutes.

With the agreement of Members, the report was taken as read.

RESOLVED:

a)    That the Risk Management and Internal Controls report be noted.

b)    That the updated Pension Fund risk register be approved.

The Committee considered a joint report of the Director of Corporate Resources and the Director of Law and Governance, which sought approval of the revised Terms of Reference for the Local Pension Committee. A copy of the report marked ‘Agenda Item 14’ is filed with these minutes.

Arising from discussion, the following points were made:

i.          The Chairman explained that the proposed revisions were required to reflect developments arising from the Fit for the Future programme and to strengthen governance arrangements relating to LGPS Central. It was noted that shareholder matters and client oversight matters were distinct and that the revised arrangements were intended to provide greater clarity between those functions.

ii.          A Member welcomed the work undertaken by officers in bringing forward the revised Terms of Reference, noting the changing national context and the need to respond to emerging guidance and governance requirements.

iii.          The Committee discussed whether the resolutions should refer to named officers or to the relevant posts, in order to avoid the need for further revisions should postholders change. It was agreed that the recommendations should be amended to refer to the relevant roles rather than named individuals.

RESOLVED:

a)    That the revised Terms of Reference be agreed.

b)    That the Director of Corporate Resources and Deputy Chief Executive & s.151 officer, be appointed as the Fund’s Shareholder Representative for LGPS Central Ltd.

c)     That the Assistant Director Finance, Strategic Property and Commissioning be appointed as the Fund’s Deputy Shareholder Representative for LGPS Central Ltd, to act where the Shareholder Representative is unavailable.

d)    That the Shareholder Representative may authorise other officers to substitute for them and perform their designated duties, as set out in this paragraph, on their behalf, in their absence and in the absence of the appointed Deputy Shareholder Representative.

e)    That the Shareholder Representative (and Deputy, or substitute when acting) be authorised to exercise the Administering Authority’s shareholder/company decision-making in relation to LGPS Central Ltd, including (where required) voting at general meetings, signing shareholder resolutions and completing proxy forms, within the scope of the Council’s constitution and any relevant scheme of delegation.

f)      That the Shareholder Representative will report back to the Local Pension Committee as appropriate on shareholder/company matters, including decisions taken.

The date of the next meeting is scheduled for 11 September 2026 at 10.00am.

RESOLVED:

That it be noted that the date of the next meeting would be 11 September 2026, at 10.00am.

The public are likely to be excluded during consideration of the remaining items in accordance with Section 100(A)(4) of the Local Government Act 1972 (Exempt Information).

RESOLVED:

That under Section 100(A) of the Local Government Act 1972 the public be excluded from the meeting for the remaining items of business on the grounds that they involve the likely disclosure of exempt information as defined in Part 1 of Schedule 12(A) of the Act.

The Committee considered an exempt report of Hymans Robertson. A copy of the report marked ‘Agenda Item 18’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report of LGPS Central. A copy of the report marked ‘Agenda Item 19’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by Adams Street Partners. A copy of the report marked ‘Agenda Item 20’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by Fulcrum Diversified Core Absolute Return. A copy of the report marked ‘Agenda Item 21’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by Legal and General Investment Manager. A copy of the report marked ‘Agenda Item 22’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by Patria SOF. A copy of the report marked ‘Agenda Item 23’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by Ruffer. A copy of the report marked ‘Agenda Item 24’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by KKR Global Infrastructure Investors. A copy of the report marked ‘Agenda Item 25’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by Stafford Timberland. A copy of the report marked ‘Agenda Item 26’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by Saltgate UK AVPUT. A copy of the report marked ‘Agenda Item 27’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by Christofferson Robb & Company CRC. A copy of the report marked ‘Agenda Item 28’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by IFM Global Infrastructure. A copy of the report marked ‘Agenda Item 29’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by Infracapital Greenhill Partners LP. A copy of the report marked ‘Agenda Item 30’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by JP Morgan. A copy of the report marked ‘Agenda Item 31’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by LaSalle Leicestershire County Council Pension Fund. A copy of the report marked ‘Agenda Item 32’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by M&G Investments Debt Opportunities Fund II. A copy of the report marked ‘Agenda Item 33’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report of Partners Group. A copy of the report marked ‘Agenda Item 34’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by Quinbrook Infrastructure Partners. A copy of the report marked ‘Agenda Item 35’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report of Savilles LCCPF Valuation. A copy of the report marked ‘Agenda Item 36’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report by Aegon Asset Management. A copy of the report marked ‘Agenda Item 37’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.

The Committee considered an exempt report of Aegon Asset Management LCCPF IL an FX update. A copy of the report marked ‘Agenda Item 38’ is filed with these minutes. The report was not for publication by virtue of paragraph 3 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED:

That the report be noted.