skip to main content

Agenda item

To consider the report, receive and note the draft Statement of Accounts

 

Decision:

To accept and note the Pension Fund Statement of Accounts (subject to audit) for 2020/21.

 

Minutes:

Submitted, for information, the report of the Investment Manager to provide details of the financial activities of the Pension Fund during the year ending on 31 March 2021.  It was highlighted that the accounts (draft) were subject to audit and the audit would be undertaken by Audit Wales.

 

It was reported that the accounts were following the statutory CIPFA format, with the guidance interpreting what was submitted in the accounts.  Members were reminded that last year's accounts, had been signed with an emphasis of matter paragraph because of the uncertainty with property prices. It was highlighted that the 4 Property Managers had stated that there was no uncertainty this year. Attention was drawn to the Fund's Account, which noted a normal year for contributions and benefits, without any substantial change. Nevertheless, a substantial change was reported in management costs and reference was made to note 12a, which explained that an increase in Private Equity (Partners) performance fees was responsible for the change, with strong performance in three funds specifically. (A full explanation was received from the Managers when their fees were challenged).

 

Reference was made to the increase in the Investment Income (note 13) as a result of income from Equity investments as the Wales Pension Partnership started to pay income gained since establishing all of the Partnership's sub-funds that the fund had invested in them. Reference was also made to the figure of £565.5 million, namely the increase in the value of the assets on the market following a very prosperous year (note 14a).

 

In the context of the net asset statement, attention was drawn to the change in the investment assets (Note 14a), which had now reached £2.5 billion, with a substantial increase in the Wales Pension Partnership after a proportion of Fidelity and Insight transferred to fixed income funds during the year.

 

The Head of Finance Department took the opportunity to thank the Investment Team for their commitment to ensure that the Statement of Accounts (draft) was completed within the timetable. He noted that he had already certified the draft accounts and that it would be good practice to share the accounts with Members to give them an opportunity to question / make observations.

 

Gratitude was expressed for the report.

 

In response to a question as to whether financial outgoings will appear consistent within two years (i.e. fees reflecting the number of outgoings), it was noted that as there were a number of buying and selling combinations, it would be difficult to compare year v year, but consistency was expected in the long-term.

 

In response to a substantial net increase of 0.6 billion, it was asked whether the strategy could be reviewed to consider attractive packages / benefits for staff, e.g. early retirement. The Head of Finance noted that the Fund or Employer were not entitled to amend the benefits as they were set in line with salaries and the number of working years. It was reiterated, in April 2022, that work would commence on reviewing the next triennial valuation where possible, subject to the outcome, to amend the employers' contributions.

 

In response to a comment that the government was amending retirement age, with people paying in longer, was affecting the money being paid into the Fund, the Head of Finance noted that the fact was being considered when discussing the triennial valuation, but that the market was the most influential factor.

 

RESOLVED to accept and note the Pension Fund's Statement of Accounts (subject to audit) for 2020/21.

 

Supporting documents: