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: