Agenda item

Pension Fund Annual Report

The Committee are asked to note the Pension Fund financial statements and the 2019/20 Annual Report.


The Annual Report for 2019/20 was prepared in accordance with the Local Government Pension Scheme (LGPS) regulations and included all of the Fund’s strategy and policy documents, as well as the Fund’s audited accounts and performance details.


The annual report contained a summary section on pages 22 to 25 of the report pack, which provided a short graphical summary of the Fund, which could be read as a standalone summary. 


The External Auditors report on the statement of accounts considered by the Audit & Governance Committee on 30 October 2020 stated that the accounts gave a true and fair view of the financial transactions of the Pension Fund.


There was a single amendment made to the annual report issued as part of the reporting pack. On page 97 the table label ‘Creditors’ has been replaced with ‘Payments in Advance’ for consistency purposes. The annual report should also receive an external auditor’s opinion on the pension fund’s statement of accounts, which is a ‘consistent with’ opinion referring to that given on the administering authority’s statement of accounts.


The Local Government Pension Scheme Regulations 2013 require an administering authority to publish a pension fund annual report on or before 1st December together with the consistency statement from the auditor, it was confirmed that these documents were published on the 1 December 2020, thereby meeting the regulations.


It was noted that the Authority would not be producing a printed copy  of the annual report this year, but would rely on the electronic version only. 


The Head of the Pension Fund wished to thank the pensions accounting team led by Maria Saunders, in delivering the Annual Report within the regulation timelines. 

In response to a question, the Independent Advisor confirmed that he was content with the Annual Report. 


During the discussion, it was confirmed that the Funds current responsible investment approach was now included within the report.  The Head of Pensions explained that the regulations would  evolve especially in relation to climate related financial disclosures.  


The Head of Pensions explained he intended to work closely with Brunel and all fellow partner Funds within the pool, in a collaborative approach to ensure continued compliance with regulations as they moved forward. 


The Committee questioned the actuarial fees on page 39 of the report, the Director of Finance confirmed the figures were in line with the expectation. 


In response to a question relating to investment management expenses, it was noted that there was a large fluctuation between the 2018/19 and 2019/20 costs. The Head of Pensions drew the Committees attention to the accompanying note which provided an explanation for the increase, such as a move from passive to active management, however a more detailed cost analysis would be undertaken and  this information would be circulated via email to members of the Committee.


Members wished to know if there were any best practice examples other authorities used in their Annual Report that Gloucestershire could adopt. It was explained that due to regulations and guidance annual reports were inherently replicated across all of the 89 LGPS funds.  This ensured  there was  a consistent and transparent approach across all LGPS Funds.  It was recognised that the summary pages were helpful to the reader and not all Funds replicated that.  The Committee was advised that Gloucestershire’s report was deemed to be high quality and very well prepared.   


During the discussion, members wished to know if the valuations of assets had been given sufficient attention within the report, as they felt this was an important point to highlight.  The Head of Pensions explained the explanatory notes, as required, surrounding the impact of the Covid pandemic were included in the report. 


Members were advised that a number of asset valuations were reviewed by the auditors, such as property investments, as these were hard to value investments.  The Director of Finance informed the Committee that other investments, were valued by the market on the 31st March 2020.  Members recognised that significant amounts of market value had been lost at the beginning of the pandemic but this had recovered considerably, especially in equities. 


Members questioned the  figures on pages 48 and 49 of the report, which related to the costs per scheme member.  The total cost per member had gone up 33% over a two-year period.  During the discussion, it was noted that the figures on page 49 were available for 2018/19 but appeared to be missing for 2019/20. The Head of Pensions agreed to take this point away and investigate further and would report back to members in due course.


The Director of Finance pointed out that the Funds total cost per scheme member was £150.00 compared to the national average of £222.27 in 2018/19. Based on this information he felt that Gloucestershire provided good value for money. It was suggested that perhaps a footnote be included in the future to highlight this point.  




The Committee noted the Pension Fund financial statements and the 2019/20 Annual Report. 


That the Head of Pension would investigate the correlation of the tables on page 48 & 49 and circulate this information to Members in due course. 


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