Agenda item

This report presents to the Committee the draft Pension Fund Annual Accounts for the year ended 31 March 2023.

Sawan Shah (Head of Pensions, Brent Council) presented the report, which summarised all transactions made by the Fund and the value of assets during 2022/23. The Committee were informed that during 2022/23, the value of the Pension Fund’s investments decreased to £1,116m from £1,128m. This was largely due to the poor performance of pooled funds holdings (unit trusts, diversified growth funds) over the 12 month period. Despite the poor performance over the previous 12 months, over the last 3 years the Fund had posted positive returns.

In discussing contributions, benefits and cash flow, it was detailed that total contributions received from employers and employees was £68m, an increase on the previous year in which £64m was contributed. Total benefits paid had also increased compared to the previous year, with £48m paid in comparison to £47m in 2021/22. Overall, the Fund was in a positive cash-flow position because its contributions exceeded its outgoings to members.

The Committee noted that, as the Brent Pension Fund was administered by Brent Council and the Fund’s accounts formed part of the Council’s financial statements, formal approval of the Pension Fund accounts rested with the Council’s Audit and Standards Committee. The accounts presented to the Committee would be formally published with the Council’s accounts, which was expected to be by 30 June 2023. Furthermore, the Committee were informed that the Council had not received a final external audit plan for the 2022/23 accounts, which was expected to be received in July. Although a final audit plan had not been received, the Council had been advised that the Pension Fund accounts would be subject to a hot review, with the purpose of identifying any key issues which needed to be addressed before final completion.

In considering the report and update provided, the following discussion took place:

• In response to a query regarding the hot review, the Committee were advised that hot reviews were a cyclical process for the Council’s external auditors, Grant Thornton, and thus the area of the Council’s finances being reviewed changed every year. The hot review involved a detailed review of the accounts and audit working papers by a specialist team, with the results reported to the Audit and Standards Committee which would also be shared with the Pension Fund Sub-Committee.

• In providing further context on the reporting methods for the Fund’s accounts, the Committee were informed that profits were displayed in brackets and in red, which was the opposite to the usual method of displaying values. Thus, the value (89.2) for the net return on investments for 2021/22 meant the Fund made a profit of £89.2m during that year. However, the value of £27.6m for the year 2022/23 showcased a loss of £27.6m.

• Regarding the delay in receiving the external audit plan, the Committee heard that the Council had requested a meeting with Grant Thornton to rectify this, with a meeting with the Lead Audit Planner scheduled. Once the plan had been received, it was stated that it would be shared with the Pension Fund Sub-Committee.

With no further questions, the Chair thanked officers for the update and the Committee RESOLVED to note the report