A report of the Strategic Director Finance, Governance and Support was presented to provide Members of the Teesside Pension Board with an update of progress against the Business Plan for the Fund.
Progress against the key elements of the Business Plan was reported as follows:
The key performance indicators for the Fund (Appendix A).
An up to date Risk Register (Appendix B).
The estimated outturn for the Pension Fund 2018/2019 budget (Appendix C).
Progress against the detailed work programme for 2018/2019, including a new assessment against the Pension Regulator Code of Practice (Code 14) (Appendix D).
The Fund was outperforming all the key indicators with the exception of the one for investment
performance. This was because there was less contribution income than the pensioner payments being made and assets were being used to cover the shortfall. However, there was still a surplus since the return was 7% on a 10 year basis which was above the required 4.7%.
A key change to the Risk Register was that the main risk previously highlighted was the move to the Border to Coast Pension Partnership (BCPP). This risk had now been mitigated as the pooling had taken place. However, the Member data would be transferred from Kier at some point so the risk remained on red alert.
A Board Member highlighted in the outturn report that the management costs had increased by approximately £1.5 million. It was explained that additional funding had been put into oversight and governance to reflect transition costs and it was also due to having externally managed funds now.
Some progress had been made on the Forward Work Plan. Arrangements with BCPP were now in place and some investment had been made into UK equities and overseas equities funds. All equities, with the exception of those in Taiwan, had been transitioned to the pool fund. A tax guarantee was required before the Taiwan equities could be moved. An interim valuation had been carried out to provide an idea of the funding level and any possible consequences for employer rates. The Asset Liability Study had been agreed in principle and some progress had been made with the tender for property and investment agency services.
AGREED as follows that:
1. the information provided was received and noted.
2. a breakdown of the management expenses quoted in estimated outturn for the Pension Fund 2018/2019 budget would be provided.