Worcestershire Pension Fund’s recently published Pension Board agenda for November 18, 2025, and the Pension Fund Annual Report for the year ended March 31, 2025, reveal key strategic decisions and future investment intentions.
Strategic Asset Consolidation to LGPS Central
The Worcestershire Pension Fund plans to transfer all its assets to LGPS Central by March 31, 2026. This action is in response to the government’s pooling agenda and the Pension Schemes Bill 2025, which aims to reshape LGPS investment and governance through asset consolidation. The Fund acknowledges this as a “vast change programme involving costs and changes to fiduciary duty” but states it will respond positively. As of March 31, 2025, approximately 62% of the Fund’s total net assets were already invested via or subject to oversight by LGPS Central. The Fund continues to explore opportunities for further allocations to pooled investment products. (Pension Fund Annual Report, page 12, 46)
New Investment Commitments in Infrastructure
For the fiscal year 2024/25, the Fund made new commitments to infrastructure. These include $95 million to Stonepeak Infrastructure Fund V and £35 million to Gresham House British Sustainable Infrastructure Fund III. Additionally, the Fund was finalizing a commitment of £85 million to the Bridgepoint Direct Lending Fund IV as of March 31, 2024. These investments align with the Fund’s focus on diversification, resilience, and liquidity, and its commitment to sustainable infrastructure and housing investments for long-term environmental and social impact. (Pension Fund Annual Report, page 11, 61, 65, 67)
Implementation of Shaped Equity Protection Strategy
During the 2024/25 fiscal year, the Fund procured a shaped equity protection strategy with Novum Investment Management. This strategy, also referred to as an Equity Protection Strategy, was implemented to guard against major market fluctuations, initially covering passive equity investments in the US and Europe. The rationale for this decision was internal analysis of global market risk and prevailing conditions in equity markets during 2024 and early 2025. (Pension Fund Annual Report, page 33, 35, 65)
Increased Allocation to UK Gilts
In the 2024/25 fiscal year, the Fund increased its allocation to UK Gilts. This decision was part of a broader strategy to enhance diversification, resilience, and liquidity within the portfolio. As of March 31, 2025, UK investments constituted approximately 32% of the Fund’s total portfolio. (Pension Fund Annual Report, page 11, 67)
Strategic Asset Allocation Review Recommendations Progressed
Recommendations from a Strategic Asset Allocation Review (SAAR) conducted in 2022/23 and endorsed by the Pensions Committee in March 2023 continued to be progressed during 2024/25. These recommendations included increasing the Fund’s passive market allocation by 5% to the US while reducing the UK allocation by 5%, and allocating up to 5% of the Fund’s Strategic Asset Allocation to Private Equity (PE) steadily over time. The Fund also intends to continue exploring opportunities to deploy capital in alternative assets with an income focus to ensure a continued long-term cashflow solution. (Pension Fund Annual Report, page 65)
Consideration of Actuarial Services Procurement
Following a full tender process using the LGPS National Frameworks, Hymans Robertson has been appointed as the Fund Actuary, with the contract commencing on January 22, 2024, and lasting until January 21, 2028, with an option for a two-year extension. Fund Officers are collaborating with Hymans Robertson on the 2025 Valuation plan, including data provision for contribution modeling for larger employers. (Business Plan, page 128)
Review of AVC Provision Underway
The Fund is conducting a review of its existing Additional Voluntary Contributions (AVC) provision and exploring alternative options through the National LGPS Framework. This process involves engaging with the Worcestershire County Council procurement team and utilizing Lot 2 of the framework to award a contract to a provider for the review. Hymans Robertson is currently conducting Stage 1 of this review. The current provider, Scottish Widows, is not listed on Lot 1 of the National LGPS Framework. (Business Plan, page 129, 147)
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