To receive the Final Pension Fund Accounts.
Bola Tobun, Finance Manager, Pensions and Treasury introduced the report.
1. The Council is expecting BDO to issue confirmation and report of the audit, unfortunately this is not available.
2. The account itself is on page 54 of the agenda papers. The accounts contain two statements; where we deal with members contributions from employers and employees. The second statement is the transactions showing how the money is invested and the return that is made- the Net Assets Statement.
3. The only change since draft account that the Committee received in July is on the returns from investment, the position has been revised as the pension fund banker/ custodian Northern Trust used the previous months valuation for five of our Fund’s portfolios. This is because the prices and valuations of these portfolio’s cannot easily be obtained on the stock market. The global pandemic has had an effect on the market asset hence most of the assets depreciated further by the 31st March 2020. When the draft account was presented back in July the closing net assets were £1.167bn but is now £1,149bn. The assets depreciated further from the previous year by a total by £35.7bn.
4. The fund has appreciated by almost £100m by the end of June 2020 to £1.267bn. Due to the effect the Covid 19 pandemic is having on the global economy a triennial valuation update was undertaken as at 31st March 2020, the detail of the outcome of this exercise can be found on page 48 of the agenda (section28). The fund was overfunded with funding level of 103% and surplus of £39m, when the triennial valuation was undertaken as at 31st March 2019. A valuation update undertaken as at 31st March 2020 indicates a reduction in funding level to 96% with corresponding deficit value of £50m.
5. Attention is drawn to the table comparing Enfield with other funds (page 48 section 27). One year to date Enfield is ranked at 10 out of 63 funds.
6. The covering report was asking for approval from the Committee this is to be held back until BDO’s ISA260 on the accounts. This has been delayed due to illness at BDO.
Questions, comments and queries raised:
· Clarity requested what the benchmark fund is and how it is arrived at? Officers advised that the benchmark in this case is the fund benchmark based on different targets, index and benchmark of each asset class or portfolio that made up Enfield total investments. Enfield pension fund benchmark is therefore a basket or aggregate of each of all our investment portfolios benchmarks. As we have a different index for each of our active global equities and for passive global equities, different index and benchmark for our bonds and private equity. The PIRC universe is the average return of all the 63 LGPS funds returns with this organisation called PIRC (Pensions & Investment Research Consultants Ltd) league table.
· In the report talks about a deficit but looking at the numbers looks like a surplus. The deficit figure of £50m is correct the liability is wrong, it should be (£1,219m). The error will be corrected this is only in the report for the committee and is not part of the pension fund accounts.
· Page 71 are in thousands of millions, is this correct? There are a series of checks that need to be made before these are signed off. Officers confirmed that this will be checked.