Agenda item

Report of the Chief Operating Officer to present the audited Pension Fund Annual Report and Accounts for 2015/16 and the Annual Governance Report of the external auditors, BDO, which reports on their annual audit of the Pension Fund accounts.

The Committee considered the report on the audited Pension Fund Annual Report and Accounts for 2015/16 and the Annual Governance Report of the external auditors, BDO, which covered their annual audit of the Pension Fund accounts. The report was introduced by Leigh Lloyd-Thomas, BDO, who set out the findings of the audit; he confirmed that none of the findings exceeded the level such as to have a material effect on the accounts and that the auditors were therefore able to issue an opinion that the accounts were a true and fair reflection of the financial position of the Pension Fund.

The Committee asked about the reason for the discrepancies found between the contributions received in the pension fund bank account and the total contributions per Haringey Council payroll and it was reported that this was being investigated. In respect of the fair value of investments (infrastructure and private equity), and the finding that the final valuations from fund managers amounted to £212k lower than that included in the accounts, the Committee felt that this appeared to be a significant discrepancy and asked why this was not felt to have a material impact on the accounts. The Head of Treasury and Pensions advised that due to timing issues, only interim valuations were available when the statement of accounts was prepared; it was therefore not unexpected that there would be a discrepancy in the figures when the final valuations were issued. Mr Lloyd-Thomas advised that, in the event that funds totalling this amount were considered to be missing then it would be treated differently, however in this case the cause of the discrepancy was recognised as an issue arising from changes in estimated values.

In respect of the audit recommendation relating to investment management expenses, the Committee noted that this would probably be less of an issue for the Haringey Pension Fund, due to the high level of passively-managed funds. Officers confirmed, however, that they would make reasonable endeavours to obtain this information from the fund managers where it was relevant.

With regard to the audit recommendation relating to pension liability assumptions, Mr Lloyd-Thomas advised that their only query had been around the estimated life-expectancy for females not yet retired, however on the whole the actuarial assumptions had been felt to be reasonable. Douglas Green, Hymans Robertson, advised that a full analysis of the actuarial assumptions would be provided by the actuary when the triennial valuation was presented to the Committee. The Committee questioned the salary increase rate set out in the report, as this seemed high – Mr Green advised that this had been set in 2013 as a very long-term estimate, but was likely to be revised downwards for the valuation being undertaken this year.

The Committee asked whether the new EU arrangements for internal dispute resolution would have an impact on the procedure as set out on page 21 of the Pension Fund Annual Report. The Head of Pensions and Treasury and the Independent Advisor advised that they did not believe that this would have an impact, but that this was something that they would look into.

Action: Head of Treasury and Pensions

In response to a question from the Committee, it was confirmed that both figures relating to bond exposure in pooled investment vehicles on page 49 of the Annual Report should read 210,364 and that this would be corrected in the final version of the report.

Action: Head of Treasury and Pensions

RESOLVED

i)             That the Committee note the contents of the report and verbal updates provided at the meeting by BDO.

ii)            That the Committee approve the Pension Fund Annual Report and Accounts for 2015/16.

iii)           That the Chair and Chief Operating Officer be authorised to sign the letter of representation to the Auditor.