Damien Pantling introduced the report and stated that the purpose of the report was to sign off the draft 2021/22 Pension Fund annual report and accounts. The report was unaudited, with the audit still underway. There had been some amendments to the prior two years’ annual reports and accounts, which was why the report had been brought back to the Committee for re-approval. At the pre-meeting, Deloitte had asked the Committee to note a small amendment to be made to the covering report, noting a caveat to the wording around Deloitte being comfortable with the 2021/22 audit. Whilst Deloitte advised they were generally comfortable, the report had not been reviewed by their lead engagement partner which meant that the Committee and officers could not yet state that Deloitte were comfortable with the report.

Councillor Sharpe stated that the situation of a delay in audit that the Fund were in with relation to Deloitte was not an unusual one and was one that a number of other councils were facing.

Councillor Hilton asked if the increase in management expenses from £27.7m to £40m was a revised reporting structure including previously unreported costs.

Damien Pantling stated that the accounting methodology had changed using the Cost Transparency Initiative, which was an industry standard. A third party, ClearGlass, via LPPI reported on the Fund’s management fees, with a note in the still open 2019/20 accounts and annual report that defined this change in accounting approach. It was not that the management fees had significantly increased, but a different method of reporting was being used to improve transparency. It was important to note that this didn’t affect closing net asset values in any way. The Fund carried out a grossing up exercise, which was increasing the Gross performance of investment assets and increasing management fees, which meant they net each other off while having no impact on the bottom line closing balance sheet.

Councillor Hilton asked if Technology Enhanced Oil Ltd was still trading. Given the increase in oil prices, Councillor Hilton asked if there was any opportunity for the company to re-emerge as a force they might have been.

Damien Pantling stated that specific investments could not be discussed in Part I.

Councillor Da Costa asked if it would be helpful to have the comparable figure for the previous year available in order to compare.

Damien Pantling stated that the way the report was presented was in line with advice from Deloitte as auditors, re-stating prior years as agreed with the auditors. The accounts were appended to the report, and the advice had been taken from Deloitte to present it this way, rather than overcomplicating the annual report more than was required.

Councillor Hilton asked if, in the cases where the value of an asset had decreased, this was a result of selling.

Damien Pantling stated that it would depend, but in the majority of cases this was probably related to selling.

Alan Cross stated that in relation to Councillor Da Costa’s question, it would be more beneficial to disclose two previous years on management expenses rather than just one.

RESOLVED UNANIMOUSLY: That the Pension Fund Committee notes the report and;

i)               Approves the draft 2021/22 Pension Fund Annual Report for publication on the Pension Fund’s website;

ii)             Approves the draft 2019/20 and 2020/21 Pension Fund Annual Reports for re-publication following amendments since December 2021 approval;

iii)            Notes that although the accounts will remain as “draft” officially until the Administering Authority’s accounts are formally signed off, the auditors have recommended these have been reviewed and are fit for public disclosure.