1. Management Summary

Global markets were helpful during 2025. Equities increased in value by 19% with the UK and Emerging Markets being standout performers. Gilts and other Credit were positive while there were emerging signs of recovery in Property. The Fund’s portfolio value returned 7.5% reaching £6,323m[1] and we enter 2026 in a robust financial position with 108% funding[1].

The Fund continued to invest in Local Impact assets during 2025-26 focused on three areas: renewable infrastructure, affordable housing, and small business funding. We have now deployed £55m into solar farms, we have deployed £12m into affordable housing, and will shortly announce further housing investment in our region. We have also started to fund small businesses across the South West with two such investments to date. Our new target is to invest c.£300m or 5% of the Fund into local impact by the end of 2027.

The Fund made further progress on climate targets. The equity portfolio is reaching its decarbonisation targets ahead of time, faster than required to meet net zero by 2045.

In terms of service experience, 2025-26 delivered further progress. Member requests addressed within required timeframes was sustained at 90%. Backlogs were materially reduced and individual members’ different pension accounts merge, strengthening our administrative foundations for further improvements during 2026-28.

Looking forward the Fund has set itself core objectives for the next three years:

In terms of administration and service:

  • We will further improve service experience for both our members and employers.
  • We will raise our operational efficiency to enable lower unit costs.

In terms of investments:

  • We will execute new pooling arrangements and move our assets from Brunel to LPPI.
  • We will review our Investment Strategy, seeking to improve the Fund’s risk / return mix and improve the probability of contribution reductions for employers.
  • We will accelerate investment in Local Impact and raise assets to our target of £300m.
  • We will start to invest in Natural Capital.

We will aim to achieve the above objectives while also getting the basics right:

  • We will meet all our regulatory obligations.
  • We will improve skills among both officers and Board / Committee members.
  • We will identify, measure, and mitigate risks.
  • We will manage within the budget set by the Pension Committee.

[1] 31 December 2025