The Director of West Yorkshire Pension Fund will submit Document “H” which provides the West Yorkshire Pension Fund’s financial position for the year ended 31 March 2019.  The accounts have been prepared in accordance with:

·         CIPFA Code of Practice on Local Authority Accounting in the United Kingdom 2018/19

·         CIPFA Guidance on Accounting for Local Government Pension Scheme Management Costs.

·         Pensions Statement of Recommended Practice 2007

·         International Financial Reporting Standards (IFRS), as amended for the UK public sector

Recommended-

That the West Yorkshire Pension Fund Audited Report and Accounts for 2018/19 be approved.

                                                            (Ola Ajala – 01274 434534)

The Director of West Yorkshire Pension Fund submitted Document “H” which provided the West Yorkshire Pension Fund’s financial position for the year ended 31 March 2019.  The accounts had been prepared in accordance with:

·         CIPFA Code of Practice on Local Authority Accounting in the United Kingdom 2018/19

·         CIPFA Guidance on Accounting for Local Government Pension Scheme Management Costs.

·         Pensions Statement of Recommended Practice 2007

·         International Financial Reporting Standards (IFRS), as amended for the UK public sector

It was reported that:

·         The value of the Fund increased from £13.6 billion in 2018/19 to £14.4 billion by end of 2019/20. The increase in value was the result of positive market movement during 2018/19.

·         During the 2018/19 financial year a large scale bulk transfer of assets for First Bus West Yorkshire of £492.1m (estimate of £450m was used in the 2017/18 account) to Greater Manchester Fund was completed. The increase was due to favourable investment performance during 2018/19.

·         In 2018/19 the Fund made a total of £0.91 billion return on investments, this was made up of investment income of £0.48 billion and increase in market value of £0.43 billion. Investment performance for the year was 7%, this was provided in a report by Portfolio Evaluation Ltd (PEL) an independent investment analytic firm. This was 1% above the benchmark target of 6%.

·         The actuarial valuation at 31 March 2016 determined that WYPF funding level was 94% one of the highest funding levels within LGPS in the last valuation. The latest update provided by Aon gave a funding level of 108%. This improvement is due to the strong financial markets since the 2016 valuation. As this was merely an updated funding level, it would not provide any cash flow benefit to employers.  2019 was a valuation year and work was in progress with Aon to provide the latest funding result for WYPF. 

·         Membership numbers increased by a moderate figure from 286.5k to 291.5k an increase of 2%. Employer number increased by 2 from 471 to 473. Whilst there were moderate increases in member and employer numbers, pension administration workload continued to increase due to new regulations, covenant work and changes in employers profiles especially new academies and academies merging to form new groups.

·         The cash flow position was positive; assets were not being sold to pay  pensions this position would continue for another 10 years; the fund was quite robust.

·         The latest cost of services data collected across the UK for 2017/18 showed the Fund to have the lowest costs again, WYPF total cost was £36.45. The comparative figure for 2018/19 for WYPF was £34.16 a small reduction. Putting the service and cost performance together showed that the Fund delivered a very high level of value for money for members and employers.

·         20 key performance indicators had been selected from a list of services delivered to WYPF members in 2018/19 to report in the account, the following five performance indicators were important, all having met the target timescale in over 90% of cases:

          Payment of pensioners on time - 100%                                      

          Transfer in quote      99%

          Pension estimates 93%

          Retirement actual 95%

          Death grant payments 92%

          Change of address 95%

·         Change of address was very important due to the data protection impact, pension communications, letters and statements could communicate significant financial information. Therefore, the Fund was always looking at refining the address change processes to manage data protection impacts, all identified wrong addresses were listed as “lost contact”, until correct addresses were provided.

·         Whilst, it had been a positive year in terms of performance and costs, like any organisation the Fund faced same challenges of increasing regulations and workload. Managing systems and processes to remain compliant, the biggest challenge was maintaining and sustaining a specialist pensions and investment workforce in Bradford.

Members commented on the following:

·         Did the pension fund purchase all of its own investments or did it use other fund managers?

·         Was advice given to Members who wanted to move their pension savings from WYPF to private pensions?

·         Need to ensure experienced staff were retained.

In response to Members questions it was reported that:

·         The pension fund purchased its own investments in principal markets; there were small markets where third party fund managers were used; but policy was to focus investment in better regulated markets.

·         WYPF was not allowed to provide financial advice to Members. Members who wanted to transfer their pension savings had to demonstrate to WYPF that they had been given pension advice where significant sums were involved; regular articles were placed in the newsletter about the risks, but this did not stop Members wanting to invest in private pensions.

·         WYPF used all available resources to retain experienced staff and were increasing the number of trainees and apprentices as part of succession planning.

Resolved-

That the West Yorkshire Pension Fund Audited Report and Accounts for 2018/19 be approved.

Action:           Director of West Yorkshire Pension Fund