Agenda item

The Committee considered a report which contained the draft unaudited Statement of Accounts for the Buckinghamshire Pension Fund for the year ended 31 March 2022. The Pension Fund Account and Net Asset Statement show that in the year to 31^st March 2022 the value of the Pension Fund increased by £275m to £3.913bn. This was the net result of the contributions made (£169m) including transfers in from other pension schemes, employers’ and employees’ contributions; payments out £144m including pensions, commutations, lump sum retirement benefit and death benefits; management expenses £17m plus net returns on investments (£267m). The accounts had been prepared in accordance with proper practices as set out in the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on Local Authority Accounting in the United Kingdom 2021/22.

The external audit of the pension fund draft accounts 2021/22 would commence shortly. A further report, incorporating the findings of Grant Thornton would be brought to this Committee at a future meeting where representatives from Grant Thornton would be in attendance.

Key points raised during discussion included:

• An updated version of page 81 of the reports pack was tabled at the meeting, this added the missing ‘£000’ text from the table headings of column 3 and 4 on the third table down the page which related to 2021/22 Exposure to interest rate risk.
• A Member queried whether the accounts should display where investments were placed by category, such as funds held in emerging green energy markets. The Committee was advised that this aspect of the pension fund was reviewed by the Council’s Pension Fund Committee and the information contained within the Statement of Accounts was done so in compliance with proper practices. It was explained that there was a Pension Fund Annual Report published on the Council’s website which had further analysis included.
• Inflation costs were discussed and it was confirmed that those in receipt of a pension as of 1 April 2023 would receive a 10.1% CPI increase, this was the level of CPI in September 2022. Members heard that continued inflation increases could potentially impact the pension fund accounts in the future with actuaries currently working on assumptions that inflation may remain high for two years then return to levels which were more ordinary. Longevity assumptions assumed that there would be peaks and troughs which would level out over a number of years. The finance team were working on modelling with the Brunel pool and investment managers to ensure there was sufficient cash flow to match outgoings.
• In relation to management expenses, the Committee was assured that these were reasonable and competitive. Significant savings had been achieved in recent years from moving to the pooling model, whilst fees were linked to the value of assets so should they perform well, the management fees would be higher.

RESOLVED:

That the Committee reviewed the Draft Statement of Accounts for Buckinghamshire Pension Fund for the year ended 31^st March 2022 and the timing and requirements for completion and authorisation of the final Statement of Accounts be noted.