Agenda and draft minutes

The Chair will ask the Committee Administrator to draw attention to the emergency evacuation procedure as set out under Note 5.

The Democratic Services Officer announced the emergency evacuation procedure.

Councillor Chris Dando, Councillor Mike Drew, Wendy Weston and Charles Gerrish had sent their apologies to the Committee.

Councillor John Leach was present for the duration of the meeting as a substitute for Councillor Chris Dando.

At this point in the meeting declarations of interest are received from Members in any of the agenda items under consideration at the meeting. Members are asked to indicate:

(a) The agenda item number in which they have an interest to declare.

(b) The nature of their interest.

(c) Whether their interest is a disclosable pecuniary interest or an other interest, (as defined in Part 4.4 Appendix B of the Code of Conduct and Rules for Registration of Interests)

Any Member who needs to clarify any matters relating to the declaration of interests is recommended to seek advice from the Council’s Monitoring Officeror a member of his staff before the meeting to expedite dealing with the item during the meeting.

The Chair explained to the public the difference between DPI's (Disclosable Pecuniary Interests), which require recusal, and ‘other interests’. Members are expected to declare relevant ‘other interests’ but only need to withdraw if they consider their judgement is clouded by considerations relating to the bodies for which they declare such an interest.

William Liew declared an ‘other interest’ with regard to agenda item 9 (Investments in Aerospace & Defence) as in his role on the Committee he represents all Further and Higher Education employers which have engagement with these industries. He stated he had no personal interest to declare.

John Finch declared an ‘other interest’ with regard to agenda item 10 (Investments Pooling) as he is employed as an independent advisor to the Cornwall Pension Fund.

Edmund Cannon declared an ‘other interest’ with regard to agenda item 9 (Investments in Aerospace & Defence) as he is an employee of the University of Bristol.

There was none.

Youssef Ibrahim addressed the Committee on behalf of Helen Wheeler, a summary of the statement is set out below.

He said the survey results show that only 47% of those who responded want to remain invested in Aerospace & Defence which was not a clear majority. He wanted to draw the Committee’s attention to the fact that many young people and women had shown that they were against the continued investment position.

He said that the political position of the Committee had been known since March.

He said that the decision the Committee was likely to make, might well be legal, but in his view, it was not ethical. He added that so many people have been killed in the conflict in Gaza including relatives of his and many more Muslims.

He stated that it was his view that genocide remained ongoing in Gaza.

Benazir Jatoi addressed the Committee, a summary of the statement is set out below.

She said that the results of the survey show that the Fund membership is split on this issue and that the 42% that wish to divest from Aerospace & Defence were mainly women and young people.

She stated that she believed that the survey included non-relevant information. She added that she felt that most Fund members would expect investment in assets that would cause no harm to human life.

She called for a further expert analysis of the survey results to be carried out.

Eldin Fahmy addressed the Committee, a summary of the statement is set out below.

He said it was clear that the Committee intends to vote today to continue investing members' pay in arms companies complicit in genocide and that this was the outcome it always wanted from the member survey.

He stated that the Committee had expressed clear political support for arms investments, that its members’ have known links to the arms industry and were undeclared, and that these members did not recuse themselves from previous meetings.

He said that in his view the Committee have provided no meaningful opportunities for members or their representatives to comment on the plans and that Trade Union reps were consulted very late and on a confidential basis only.

He added that the survey design was highly contentious with numerous concerns raised by invited stakeholders about biased questions and misleading information.

He highlighted that only 1 in 5 members were surveyed and that no explanation had been provided as to why you did not contact a wider pool of members via APF employers on an opt-in basis. 

He stated that the results provide no evidence of widespread support for continued arms investments amongst members, with only a minority of members (47%) supporting the APF Committee’s position. He added that there is no mandate from members for your controversial and divisive policy.

He said that the perception that this decision is guided by the personal priorities and interests of APF Committee - and not by pension fund members’ best interests - will be damaging to  ...  view the full minutes text for item 34.

There were none.

The Committee RESOLVED that the minutes of the meeting on 26th September 2025 be confirmed as a correct record and signed by the Chair.

The Committee RESOLVED to note the draft minutes of the Board meeting held on 3^rd December 2025.

The Head of Pensions introduced the report to the Committee and highlighted the following points.

·  The Committee are being asked to confirm or reconsider its previous decision in-principle to remain invested in Aerospace & Defence (A&D) companies.

·  Since the in-principle decision made in March 2025 there have been three developments which now inform the Committee’s final decision on A&D investments:

o  The Fund has undertaken a representative survey of its members’ views, led by an independent research provider.

o  The Fund has received expert legal opinion.

o  The UK government has published its Fit for the Future proposals, which shift key investment accountabilities from LGPS funds to their pools.

Brent Wright, Osborne Clarke, addressed the Committee to outline the legal advice provided.

·  Legal advice has been taken from external solicitors and counsel (Nigel Giffin KC), to ensure that whatever decisions are taken by the Pension Committee are in accordance with its legal obligations and duties towards the Fund and its employers and members.

·  The Pension Committee is considering a proposal to exclude from the Fund’s investments all aerospace and defence companies, on grounds which are social or ethical rather than financial.

·  The legal position is that the Authority (i.e, Bath & North East Somerset Council acting as the administering authority of the Fund, and here acting through its pension fund committee) may only base investment decisions upon non-financial factors if two conditions are satisfied:

o  That to do so would not involve significant risk of financial detriment to the Fund (“the financial condition”); and

o  There is good reason to think that scheme members would support the decision (“the member support condition”).

·  Both these conditions must be individually satisfied. If either condition is not met, it would be unlawful to proceed on these non-financial grounds.

·  In relation to the financial criterion, the essential point is that the Authority, acting as a prudent custodian of the Fund, ought not to pursue a policy which, for non-financial reasons, creates a realistic possibility of the Fund suffering financial detriment which is material in the context of the Fund’s size and nature. This requires consideration both of the likelihood of financial detriment arising, and the anticipated or potential scale of such detriment if it did arise.

·  In relation to the member support criterion, this probably requires something effectively equivalent to consent given by the body of members as a whole. That is likely to mean both that a high proportion of those members with a view would support the proposed policy (not necessarily near-unanimous, but not just a bare majority either), and that there is substantial positive support for that policy (as opposed e.g. to an overwhelming indifference amongst the membership).

·  There may be a variety of ways, formal or informal, in which the Authority could legitimately assess the extent of member support for a particular policy, but some rational positive basis is required for determining that the member support criterion is met. Where, as here, an organised survey  ...  view the full minutes text for item 38.

The Committee, having been satisfied that the public interest would be better served by not disclosing relevant information, RESOLVED, in accordance with the provisions of the Section 100(A)(4) of the Local Government Act 1972 that the public should be excluded from the meeting for this item of business, because of the likely disclosure of exempt information as defined in paragraph 3 of Part I of Schedule 12A of the Act as amended.

The Investments Manager introduced the report to the Committee and highlighted the following areas.

·  The Fund’s assets stood at £6,184m on 30 September 2025, delivering a net return of 3.0% over the quarter. This was 1.0% behind the return for the strategic benchmark.

·  The Fund has a 5% strategic allocation to local impact investments across 3 core themes: renewable infrastructure, affordable housing and SME funding. At 30 September 2025 3% (£180m) had been committed to underlying managers and c. £63m deployed. As the portfolio is still in its build up phase performance is not yet meaningful, however pace of capital deployment and the developing pipeline of opportunities is meeting expectations.

Steve Turner, Mercer addressed the Committee and highlighted the following points from Appendix 1.

·  In the third quarter, financial markets were driven by the resilience of economic growth with equities continuing to rally and bond returns mixed.

·  While some developed market central banks continued cutting rates, policymakers warned that the outlook warranted a cautious approach on the back of potential risks emerging from tariffs and trade. In the third quarter, the US Federal Reserve reduced its policy rate by 0.25%, amid tensions between President Donald Trump and members of the central bank.

·  The Global Sustainable Equity portfolio delivered a return of 5.7% over the quarter, which was behind the 9.7% return for the MSCI ACWI benchmark index. Half of the relative underperformance was attributable to the funds underweight to large IT names such as NVIDA and Apple.

·  The Fund is in a relatively strong position to navigate a potential downturn in equity markets given its equity protection strategy.

·  The Investment Strategy Statement is undergoing a review to ensure alignment with Fit for the Future proposals and transition to LPPI. He added that investment advice would be provided by the new pool going forward.

The Chair said that he expected the Investment Strategy Statement to be debated by the Committee at their meeting in March 2026.

Councillor Joanna Wright asked if the Committee should continue to receive regular updates on climate risk and associated modelling.

Steve Turner replied that it remains an important issue to consider and that the Actuary would offer advice as part of any review.

Councillor Wright asked about the Fund’s investment exposure to AI (Artificial Intelligence).

Steve Turner replied that most investments will have some degree of exposure to AI, particularly those within the Magnificent 7. He added that these currently retain their healthy levels of earnings, but the Fund should consider that against the overall risk / exposure level.

The Committee RESOLVED to note the information set out in the report and appendices.

The Pensions Operations Manager introduced the report to the Board and highlighted the following points.

Pensions Dashboard

• Connected to Dashboard ecosystem from 31^st October 2025

• During 2026
  • Finalise and implement new BAU & Annual processes (inc. AVCs)
  • Continue Status 2 reduction
  • Embed ongoing compliance monitoring & review frequency
  • Assess workload & resourcing in advance of going live

• Potential live date early in 2027

My Pension Online

• What it is?
  • Provides secure, 24/7 access to pension information
  • Enable lifestyle-based retirement planning
  • Support digital-first member engagement

• Benefits
  • SMS two-factor authentication for enhanced security
  • Accessible, user-friendly design with clear retirement planning tools
  • Fast, easy access to pension details

·  13,000 members have registered to use it.

Oasis direction order

·  The order approves the consolidation of 53 academies and associated admitted bodies to LPFA. The APF have 10 academies and 1 admitted body covering approximately 1500 member including active, deferred and pensioner members. This change will create significant additional workload and expense for the Fund for which we will seek recovery from Oasis and have this agreed in the final direction order.

Jackie Peel referred to the Service Performance Plan and asked what the feeling was regarding the current trajectory entering Q4.

The Pensions Operations Manager replied that there were a number of key projects planned for 2026, but said she was confident that the current progress level would be maintained.

The Chair, on behalf of the Committee, wished to offer thanks to all members of the team for their continued hard work.

The Committee RESOLVED to note the service performance to the period ending 31st October 2025.

The Technical and Compliance Manager introduced the report to the Committee and highlighted the following areas to them.

Access and Fairness Consultation

• A response to the consultation that closed on 7 August 2025 is still awaited. Once a response to the consultation is received from Government, the final outcomes will need to be considered further by the technical team, in particular around rectification of survivor benefits. The timescales for implementation and the availability of central support and guidance will be critical.

Access and Protection Consultation

• On 13 October 2025, MHCLG published a new consultation titled “Scheme improvement (access and protections)”. The four main areas covered in the consultation are summarised as follows.

• The Consultation closes on 22 December 2025.

She said that there are concerns as to the cost and amount of work involved in implementing a new Councillor & Mayors Scheme with an effective date of April 2026. It was doubtful due to the short timescales whether there would be any guidance or calculations available.

The Chair asked if Heywood would be able to deliver a software solution.

The Technical and Compliance Manager replied that the next software release had already been planned for February. It was unlikely that a further one could be scheduled before the regulation became effective. Heywood confirmed that as a minimum, LGPS funds could record new membership, but no other functionality would be ready.

Shona Jemphrey asked what impact these changes were likely to have on staff and their workload.

The Pensions Operation Manager replied that with regard to the Access and Fairness Consultation the work involving Survivor Benefits and Death Grants would need to be carried out the most experienced members of staff, so a drain on resource. She added that the Oasis Direction will instigate a data transfer which will be a substantial process to manage.

The Committee RESOLVED to note the current position regarding the developments that could affect the administration of the fund.

The Governance & Risk Advisor introduced the report to the Committee and highlighted the following areas.

• The quarterly review of the risk register has taken place and one change has been made to scores for this quarter. Some amendments have also been made to current impacting factors.

• NR04 – Governance and internal controls – the likelihood has been increased from possible to likely to reflect the fact that the Fund has not received full audit scrutiny. Internal Audit are behind with the audit plan for 2025/26 due to resource issues within the department. This is intended to be completed by March 2026.

·  NR06 – Loss of IT including cyber attack – the Fund has successfully connected to the Pensions Dashboard. While the Fund has carried out a Data Protection Impact Assessment (DPIA) and the Pensions Dashboard Programme has designed and implemented a robust security framework, the launch of Pensions Dashboard could present a fresh opportunity for scammers to target pension scheme members. Additional communications to members planned.

Jackie Peel asked if the Committee should meet for specific session on potential cyber issues.

The Chair proposed that a Teams briefing be arranged for the Committee and Pension Board members to discuss the matter in more detail.

The Committee RESOLVED to note the report.

The Governance & Risk Advisor introduced the report to the Committee and highlighted the following areas.

A summary of regulatory and data breaches recorded for the period October 2024 to October 2025 can be found in Appendix 5. There were no material breaches reported during the period.

Regulatory Breaches October 2024 to October 2025

Employer late payers – 14 incidents over the year. The report states that 2 are outstanding, one of these have now been resolved.

Employer Year End Data – 6 incidents - Late or incorrect data submitted - All employers issued fines for late/missing data submissions in October 2025.

Data Breaches October 2024 to October 2025

Reported to Information Governance: 7 (1 x incorrect link sharing, 3 x postal breach (wrong address), 2 x postal breach (enveloping), 1 x email breach). Training and support to team members provided, including refresher training and bespoke training sessions. Internal process reviews being carried out to ensure compliance and necessity. Procedure notes are being reviewed to ensure all consistency across teams. Regular data protection reminders issued to staff.

The Governance & Risk Advisor stated that the Breaches Policy had been reviewed and updated to reflect TPR’s General Code of Practice (GCOP). TPR’s expectations have not changed but the policy has now been written more in line with the code of practice and in particular sets out more detail about the legal duty to report and assessing material breaches.

Board Workplan

• Benchmarking – Use SF3 data and this has been provided late. Report to March 2026 meeting.

Training

• A reminder to all members to complete this round of training by March 2026.

The Pension Regulator’s General Code of Practice – Action Plan

• The Action Plan is set out at appendix 3.

• It has been reviewed and updated to show progress and where appropriate completion of tasks. We will be holding a further review meeting in February 2026 to ensure we are on track to complete the action plan by March 26, although there may be a few tasks that require a further extension.

Board recruitment

• Interviews were held on 3^rd December. The two remaining Employer Representative vacancies have now been filled.

Good Governance Regulations

• These have been published and will come into effect from April 2026.

Future Meeting Dates

·  It was noted that some dates for the Committee had been amended since the publication of the report. The dates for 2026 are as follows:

o  27 Mar 2026

o  26 Jun 2026

o  18 Sep 2026

o  11 Dec 2026

The Committee RESOLVED to:

i) Approve the breaches policy

ii) Note the Committee workplan & training programme

iii) Note the service plan monitoring

iv) Note the TPR’s General Code of Practice action plan

v) Note the breaches log