To submit, for information, the Pension Fund’s statutory financial declarations (subject to audit) for 2017/18.
Minutes:
The Head of Finance Department set out the background and context of
the report. Attention was drawn to the fact that these were draft accounts, not
yet audited, that were being submitted for information, and the final version
would be submitted for the Committee's approval, in its ‘governance’ role, at
its meeting on 27 September 2018. It was explained that the Pensions Committee
had an executive role while the Pension Board scrutinised implementation in
detail. It was reported that members of the Pensions Committee and the Pension
Board had given detailed consideration to the statement at a joint meeting held
on 16 July 2018.
The Investment Manager provided details of the Pension Fund's Statement
of Accounts.
In response to an observation by a member that schools outside Gwynedd
were active employers within the Pension Fund, the Head of Finance Department
explained that administrative staff in specific schools contributed to the
Fund, and the bodies that were part of the Fund followed the footprint of the
former Gwynedd county which included Anglesey and
Conwy. He elaborated that there were some employers from outside the boundary
that were members of the Fund, and there were other bodies that had been
approved to be part of the Fund with conditions.
A member noted that the situation in terms of the United Kingdom
leaving the European Union was impossible to predict but that the Fund's
position had improved. In response to the observation, the Head of Finance
Department noted that the decision to leave the EU had affected the currency
exchange rate. He explained that the Fund's assets in the United States of
America had been valued in pound sterling, and with the value of the pound
decreasing, the value of the Fund's assets were higher after converting from
dollars to pounds. It was noted that uncertainty remained, but that the
implementation and objectives of the Pension Fund were long-term issues,
pension benefits were paid in the long-term after collecting contributions.
A member noted that not only was the Fund investing overseas, but most
of the UK's major companies operated their business internationally and that
business assets had increased, and contributed to the £300m increase, which was
20% of the Fund’s value in 2017/18. He reiterated the observations of the Head
of Finance Department, noting that the Fund made long-term investments with a
three year valuation. In response to the above observations, the Head of
Finance Department noted that 'Note 16b - Analysis of Investments' demonstrated
a geographical breakdown of the Fund's overseas investments.
In response to a question by a member if there was a deficit in the
Pension Fund as with other funds, the Head of Finance Department noted that the
Fund's three year valuation had set out prudent assumptions, and the last
valuation had noted that the Fund was meeting 92% of its future commitments,
which was a much better situation than some funds that were funded around 60%.
He explained that opinion can drive actuarial assumptions which identified
whether there was a deficit, the Westminster Government’s Actuary Department
had completed a like for like comparison in 2017, and if the Government’s
Actuary’s standard assumptions were used, the Fund would be funded 109%. He
confirmed that the Fund, when comparing like for like in terms of actuarial
assumptions, was within the top 10 of the 89 pension funds in England and
Wales.
A member noted that this was her second opportunity to consider the
Statement. She notified the Committee that the Pension Board had congratulated
the Pension Fund for the work and that the Board had thoroughly scrutinised the
Statement.
The Head of Finance Department noted his gratitude to the officers for
succeeding to create the Statement in light of significant stress with staff
absences. It was explained that changes were expected in light of an audit from
Deloitte, but that the general picture in regards to the Fund’s value at the
end of 2017/18 would remain the same.
RESOLVED to accept and note the
2017/18 Pension Fund Statement of Accounts (subject to audit).
Supporting documents: