Issue - meetings
Clwyd Pension Fund Accounts 2017/18.
To provide Committee Members with the Clwyd
Pension Fund Accounts 2017/18 for consideration and changes to the
That Members noted the delegation of the approval of the accounts and commented on the draft unaudited Pension Fund accounts.
Mr Ferguson, the Corporate Finance Manager, introduced this item by explaining his role having legal responsibility for the administration of finance and for the submission of accounts on time. He explained a change in legislation resulting in the Pension Fund accounts now being separate to the Council's main accounts. As a result of this, the Pension Fund Committee was now responsible for the formal agreement of their own accounts, whereas in the past this was a responsibility of Council as they were part of the Council's accounts.
The Chairman then passed this item over to Mr Worth, an independent consultant appointed to prepare the Fund accounts for the current year until there is a permanent replacement to a vacant Finance Team post. Mr Worth gave a brief introduction on his experience and current role in Clwyd Pension Fund and clarified that the draft annual accounts are to be submitted to the Wales Audit Office (WAO) by 15th June 2018. WAO will commence the audit in June/July 2018.
The Chairman added that it is important to look into the style, format and quality of the accounts.
Mr Worth outlined that the accounts are to be prepared in line with the CIPFA Code of Practice (“The Code”) where each year a new code is issued reflecting the changes to the Accounting Standards. This is the first year that the accounts are being separated out from the Council accounts. Wales are now following the model adopted by Scotland three years ago i.e. LGPS accounts are no longer included in the administering authority’s separate statement of accounts but continue to be reported in the Annual Report by 1 December 2018 at the latest. The audited accounts will be included in the Fund’s Annual Report and submitted for approval by the Committee on 5th September 2018.
Mr Worth presented the accounts and emphasised certain elements to the Committee for background knowledge. The key points were:
- From slide 4, the normal contributions are the contributions that the employer makes for employees during the year
- Deficit contributions are to remove the funding deficit which is below 100% funded. In the 2016/17 accounts, the deficit contributions were c£28 million whereas in 2017/18 this figure was c£52 million. This reflects that three employers paid their deficit contributions upfront. This is an advantage because it’s a discounted figure (using the actuary’s discount rate) since the employer has paid three years of contributions in the first year.
- Augmentation contributions are the additional contributions such as for non-ill health early retirement i.e. the unreduced benefits before normal retirement age.
- A key figure is the change in market value of investments since this dictates the movement in market value which reconciles the opening and closing assets.
- Management expenses comprise administration costs, oversight and governance costs and investment management expenses. Some investment management costs are billed directly to the Fund but most of those costs are netted off the reported asset values.
Councillor Llewelyn Jones queried the difference between the net investment assets ... view the full minutes text for item 5