Agenda item

To receive and note the Draft Statement of Accounts

Submitted, for information, a report from the Investment Manager providing details of the financial activity of the Pension Fund during the year ending 31 March 2024.

It was reported that the accounts followed the statutory CIPFA format, with the guidance interpreting what was to be submitted in the accounts. It was noted that the year had been busy for the fund as it actioned the strategic assets allocation and invested more broadly with the Wales Pension Partnership (WPP).

Attention was drawn to the Fund Account, noting that there were some variations as the contributions and benefits increased after employees received salary increases and also as the pension increased with the CPI. It was reiterated that there had been an increase in the management costs as the value of the Fund's assets increased and the introduction of different types of investments to the portfolio, e.g. private credit.

It was highlighted that the fund's investment income had increased substantially and that the equity investments had performed strongly and had therefore generated a substantial income.  It was noted, as a part of the new strategic asset allocation, that more investment had been made in the fixed income funds, and in one new fixed income fund, i.e. the Global Credit Fund. It was reported that these investments had generated a substantial interest income and that these collective investments were being used to reduce the fund's risks, compared with the equity investments.  It was explained that the income, more or less, followed the patterns of interest rates, therefore it was reasonable that the income level had increased substantially.

In addition, it was noted that there had been an increase of approximately £300 million in the market value of the Fund following the recovery of equity markets after the impacts of the Ukraine War and high inflation. Reference was also made to the statutory notes in the report which provided details behind the figures, as well as further details regarding the activities of the Fund and WPP.

The members thanked the officer for the report.

In response to a question regarding the number of employers and which employer had left by 31/3/24 (numbers on 31/3/24 were one fewer than on 31/3/23), it was noted that Cynnal, a company under joint-ownership between Gwynedd and Anglesey, had been wound up with the service now being included in the technical services of the individual Counties.  After the company had been wound up, credit had been seen in the pension, but in line with policy, there was no need to pay out - it was not considered that this posed a risk since the pensions of the staff, who were employed by Cyngor Gwynedd and Cyngor Môn, would remain within the fund.

In response to a question regarding closed funds (a total of £12,854,000 had been paid out), and if the payment applied to the period before the establishment of Cyngor Gwynedd in 1996 after the reorganisation of county councils in line with the Local Government (Wales) Act 1994, it was confirmed that this was the closed fund.

In response to a comment on the need to include cyber risk / a reference to cyber risk in the report, it was noted that this was a document regarding the statutory accounts and that information about the cyber risk would be included in the annual report.

In response to a question regarding the development of the North Wales Corporate Joint Committee (CJC), and the impact of this on the Gwynedd Pension Fund, it was noted that since no staff currently worked directly for the CJC, that the staff associated with this work would be acknowledged as Cyngor Gwynedd staff but as a separate entity and as members of the Gwynedd Pension Fund, and not the Clwyd Fund. It was reiterated, however, that a lot of legal work needed to be done before the official launch of the CJC on 1/11/24.

RESOLVED to accept the information.