Meeting documents

To be presented by Julie Edwards, Pensions and Investments Manager and Grant Thornton.

Ms J Edwards, Pensions and Investments Manager and Mr T Slaughter from Grant Thornton presented the report and highlighted the following:

• Grant Thornton had audited the Pension Fund Accounts recently and proposed to issue an unqualified audit opinion on the Pension Fund’s financial statements. There were no significant concerns.
• As a consequence of the audit, changes to the fair value hierarchy disclosures (Note 12) and contractual commitments (Note 19) of the Accounts were agreed.
• Following the adoption of IFRS13 for Pension Fund Accounts this year, the Note 12 fair value hierarchy disclosure would be limited to investments. Dividend income receivable, current assets and current liabilities had been removed from the fair value hierarchy table and the 2015-16 comparator figures had been restated.
• The Audit Findings Report also recommended that the reconciliation of monthly returns from scheduled and admitted bodies in respect of their contributions to the scheme be updated on a regular basis and all significant reconciling differences appropriately resolved. Management had agreed this recommendation.
• Mr R Ambrose was employed by Buckinghamshire County Council, not the Pension Fund Committee.
• The Pensions Finance Officer role responsible for reconciling monthly contributions had been vacant for 3 months up to February 2017. The vacancy had been filled but the new post holder handed in their notice after 6 weeks in the role citing workload volumes as one of the reasons for leaving. 
• As the number of employers within the Fund had increased the reconciliation of employer contributions had become increasingly onerous. An additional post had been created and two Pensions Finance Officers had been appointed from the beginning of July 2017 which would assist with the backlog.
• It had been estimated that the contributions monitoring backlog would be up to date by the end of September 2017.

Following discussion by the Committee the following points were made:

• The Chairman wished to thank the Pensions & Investments Team for all their hard work resulting in a successful accounts audit.
• The use of i-connect would help in reducing the resource required for reconciliation; however; manual checking would still be required. Work had already started on the 2017/18 accounts.
• Administration fees had increased due to the increase in staffing levels. The £1.9m reimbursed to the County Council for administration costs (Note 14) included the £1.8m administration costs and £0.1m oversight and governance costs within management expenses (Note 7).
• Under the market price (sensitivity analysis) the latest review in March 2017 had shown that the overall risk factor of the fund was 13.4%, there had not been any comparatives from the previous year to benchmark against but had come from the Investment Strategy Review. The 13.4% was in line with the expected return.
• The Fund liability referred to the methodology used which is in line with accepted guidelines and in accordance with IAS19. The triennual valuation had not been based on the IAS19 but IAS26.. Mr Slaughter considered that they had used IAS26 rather than IAS19.. There would need to be an amendment to the Funds’ Statement of Accounts that would require sign off by the Chairman of the Regulatory and Audit Committee. Mr M Preston would take this forward with Ms R Martinig.
• Ms Edwards stated that there had been instances of figures being incorrectly reported as admitted bodies instead of scheduled bodies in 2015/16 accounts.

ACTION: Mr Preston

There were a number of questions that the Committee wished to raise with Mr G Muir from Barnett-Waddingham at the meeting in September, including:

• The reconciliation completed in relation to assets and liabilities of employer sub Pension Funds (which would feed into the main Pension Fund) – what would be included as there had been an instance of an employer adding an additional contribution that had not been included until it had been queried.
• The justification on actuary assumptions – what was the methodology used. Was the rate of 4.2% on salary increases realistic?

RESOLVED

The Committee NOTED the Accounts for the financial year ended 31

March 2017, NOTED Grant Thornton’s Audit Findings Report and NOTED the Letter of Representation.