Bola Tobun introduced the Draft Annual Report which contains a statement of accounts for the financial year 2019/20. This is for the Board to note, consider and provide opinion on this and for members to be aware of the financial state.
Bola Tobun advised the net assets of the Pension Fund was£1.15bn at the end of 31 March 2020. The market was very volatile at this time due to the Covid 19 issue. The asset has now bounced back and gained almost 100m.
At the last board meeting the pension fund, funding level as at 31st March 2019 when the actuary undertook the valuation was 103% meaning the Fund was in surplus by £39m. When putting together the accounts for end of financial year 31st March 2020, the actuary was asked for an update, a rough estimate of the funding level, this showed a loss of 7% and the funding level went down to 96%. However, this has now been gained back.
The main Appendix One is the Annual report, presently there is no Chairs foreword yet as this report is still a work in progress because the auditors have not yet finished. This foreword will be in the final version of the annual report.
Bola Tobun advised the annual report contains a lot of appendices from page 67-160. Members attention was drawn to:
· Funding Strategy Statement, this comes from our actuary and this covers how a funding gap can be bridged should there be one. Currently it is overfunded by 3%.
· Investment strategy Statement (pages 96-108), this covers the kind of assists we hold, who manages them and the risks.
· Appendix 3 is the Governance Compliance Statement which covers who is responsible for what for the scheme
· Appendix 4 is the Communication Policy Statement
· Appendix 5 is the Training and development policy (starting at page 124). This covers what the team is doing to make sure that everyone involved in this scheme gets the training and knowledge needed to have an effective and efficient scheme. External training can be used if information is received for relevant external training this will be shared with both the board and the PPIC. The CIPFA policy framework is followed, this has 6 pillars. Training will be provided around all the relevant areas and how to look at the actuary reports. Page 182 contains the CIPFA information as to what members need to be aware of and what knowledge area members need to acquire. Page 183 Appendix 2 breaks down these areas further. Members are asked to look to see if they have knowledge in these areas and to what level. A document will be sent for members to complete so the appropriate training can be arranged. Members found virtual training very helpful.
A query was raised on figures from the pension fund budget, page 76 of the agenda pack, relating to contributions and projections going forward to 2022/23. The contributions are going to reduce from the current level of 11m going down 7.9m in 2022/23. Why is this figure reducing? Officers advised that a going concern must be produced to the auditors, information is factored in, this is the assumption that has been made that employee contributions will be reducing as there has been an increase in people opting out of the fund. Specific research will be undertaken on this to see Enfield’s projected position will be. The cost of pensions is also reducing paying out just under £36m now reducing to £34m in 2 years’ time. It has been factored in that due to Covid 19 there has been an increase in deaths, when comparing May 19 to May20 there has been a 40% in deaths, more information on this will be provided to the board in future. Those opting out of the scheme tend to be high earners and this has a big impact.
Following discussion on the 95k Cap a full update on this will come to the next board meeting.