The Director, West Yorkshire Pension Fund, will present Document “C” which advises Members that, in accordance with Local Government Pension Scheme Regulations, costs of managing LGPS pension funds must be charged to the pension fund accounts and not to local authorities’ general fund accounts. The cost of services reported in Document “C” will be charged to WYPF accounts. The budget proposals in the report will deliver pension administration services to both LGPS and fire services pension scheme members and employers across the UK and will be used to manage over £16bn WYPF investment assets. WYPF service strategy is to maintain service quality and cost performance, not necessarily the lowest cost in all areas, but a balance of cost and performance.

Recommended –

1.    That the projected outturn of £12.68m against budget of £14.85m for 2020/21 be noted.

2.    That a budget of £15.42m for 2021/22 be noted.

3.    That the Government SF3 data - total pension cost per member of £41.94 for 2019/20 making WYPF the lowest cost LGPS scheme for 2019/20 be noted.

(Ola Ajala - (01274) 434 534)

Resolved –

1.    That the projected outturn of £12.68m against budget of £14.85m for 2020/21 be noted.

2.    That a budget of £15.42m for 2021/22 be noted.

3.    That the Government SF3 data - total pension cost per member of £41.94 for 2019/20 making WYPF the lowest cost LGPS scheme for 2019/20 be noted.

Action: Director, West Yorkshire Pension Fund

The Director, West Yorkshire Pension Fund, presented Document “C” which advised Members that, in accordance with Local Government Pension Scheme Regulations, costs of managing LGPS pension funds must be charged to the pension fund accounts and not to local authorities’ general fund accounts.

It was explained that the budget proposals reported would deliver pension administration services to both LGPS and fire services pension scheme members and employers across the UK and would be used to manage over £16bn WYPF investment assets. WYPF service strategy was to maintain service quality and cost performance, not necessarily the lowest cost in all areas, but a balance of cost and performance.

The report revealed the latest spend forecast for 2020/21 was £12.24m against a budget of £14.85m, net underspend of £2.61m. Whilst, the underspend was welcomed, as expected Covid-19 had impacted on all activities. The business continuity plan was tested to the limit, it was reported, however, that the Fund was able to rapidly move staff out of offices to work from home, with full home and mobile working equipment. As a result, IT cost went up, but office running costs had reduced. It was confirmed that during the ongoing pandemic all services were managed and delivered and some services were expanded. 

Cost per member for 2020/21 was to be £33.53 (latest government data 2019/20 £41.94). Compared to 2019/20 the largest cost savings were: a reduction in investment custody charges, unused provision for backdated pay awards and stalled recruitment activities due to Covid-19. The 2^nd lowest LGPS fund, Nottinghamshire, was £60.93. The 2020/21 WYPF cost per member of £33.53 was £27.40 (43%) below Nottinghamshire, therefore WYPF should maintain the lowest LGPS cost.

It was reported that the proposed budget for 2021/22 was based on zero base cost analysis, the base budget, before income was £15.42m. Projected shared services income was £2.5m and miscellaneous income £0.23m. Net charge to WYPF was £12.69m. Budget pressures in 2021/22 were McCloud, home working, digital services, cyber security and pension scams. The budget would support over £16 billion pension fund asset, 494,000 members, 900 employers and 22 pension administration services across the UK

Resolved –

1.    That the projected outturn of £12.68m against budget of £14.85m for 2020/21 be noted.

2.    That a budget of £15.42m for 2021/22 be noted.

3.    That the Government SF3 data - total pension cost per member of £41.94 for 2019/20 making WYPF the lowest cost LGPS scheme for 2019/20 be noted.

Action: Director, West Yorkshire Pension Fund