Agenda item

The receive and note the Pension Fund Statement of Accounts (subject to audit) for 2023/24.

DECISION

To accept and note the Pension Fund's Statement of Accounts (subject to audit) for 2023/24

Submitted, for information, the report of the Investment Manager providing details of the financial activities of the Pension Fund during the year ending on 31 March 2024.  It was highlighted that the (draft) accounts were subject to audit and the audit would be undertaken by Audit Wales.

It was reported that the accounts followed the statutory CIPFA format, with the guidance providing an interpretation of what was presented in the accounts. 

It was expressed that the year had been very busy for the Fund with the implementation of the new strategic assets allocation and wider investment with the Wales Pension Partnership. ⁠ ⁠Reference was made to a summary of the Fund account, drawing attention to a few variations as the contributions and benefits increased after employees received salary increases and as the pension increased with CPI. It was reiterated that there had been an increase in the management costs as the value of assets increased and as different types of investments had been introduced into the portfolio e.g. private credit.

It was explained that the fund's investment income had significantly increased and that equity investments had performed strongly, and as a result had generated a significant income. It was added that as part of the strategic assets allocation, more had been invested in the fixed income funds, with one new fixed income fund, the Global Credit Fund, with these investments having generated a significant interest income. It was noted that the investments had been used to reduce the fund's risk compared to equity investments, with the income more or less following interest rate patterns, and therefore it was reasonable that the income level had significantly increased.

It was highlighted that there had been an increase of approximately £300 million in the Fund's market value following the equity markets bouncing back after the impact of the ongoing war in Ukraine and high inflation.

The members expressed their thanks for the report

During the ensuing discussion, the following observations were made by members:

·         The figures were to be welcomed

·         The performance was good

In response to a question as to why there had been a significant reduction in the actuary fees, it was noted that this was because the fees were higher in 2022/23 due to the valuation period - this would be a recurring three-year pattern. In response to a supplementary question about control over the Wales Pension Partnership fee, it was noted that there was no control and that the Pensions Committee had approved the Business Plan that included the annual fees. It was also noted that there was more demand for support and that the requirements were more complex, which was reflected in the fees. It was also noted that the cost would be higher if Gwynedd was an individual fund.

In response to a question regarding an increase in debts, and whether it created a risk or established a pattern, it was noted that an increase was highlighted here solely due to the end of year timing. It was added that these were monthly debtors, not long-term debtors and therefore did not pose a risk to the situation.

RESOLVED to accept and note the Pension Fund's Statement of Accounts (subject to audit) for 2023/24