Issue - meetings
2012/13 Local Government Pension Fund Annual Report
Meeting: 19/09/2013 - Pensions Committee (Item 5)
5 2012/13 Local Government Pension Fund Annual Report PDF 107 KB
To consider the report at item 5.2
Additional documents:
Minutes:
Mr Shonola presented the report circulated at agenda item 5.2 which gave an overview of activity of the scheme and of the fund over the year and stated that the report was for noting only. He advised that the auditors have given an unqualified opinion of the accounts following the audit of the statement of accounts.
Referring to paragraph 6.3 the report, he advised that the fund was presently cash flow positive and it was estimated that the fund would become cash flow negative in a two-year range, dependent all the numbers joining and leaving the scheme.
The following issues were discussed:
Impact of auto-enrolment regulations on Pension Scheme membership -
Mr Holme advised it was too early to quantify the effects; however a significant number of staff that were auto-enrolled have already opted out. Mr Dodia suggested that present economic hardships may have led lower paid employees choosing to opt out of the scheme as contributions had a significant impact on available cash in households where income was low. It had been noted also that some members had opted out almost immediately and this had influenced some other longer-term members to opt out also. However the Council still promoted enrolment. Mr Holme advised that a three months analysis would be undertaken to investigate un-enrolment.
Cause of differential performance:
Councillor Jackson noted that the Fund had made better than average returns over 20 years but returns had been less favourable in the latter 10 years, and enquired what had caused the better performance in the earlier part of the period. Mr Woodman advised that equities always outperformed bonds over 20 years; however the differential performance had arisen because equities were very strong in the first part of the 20-year period but weak over the latter part.
RESOLVED:
That the report be noted