This report, introduced by Chris Norton, Strategy and Commissioning Manager (Treasury, Pensions, Audit, Insurance, and Risk), presented the draft Annual Report which included the draft annual accounts which had been published on the Council’s website. Following the external audit of the accounts by Grant Thornton, they would be presented to the Audit & Standards Committee in September and then be submitted to Council for approval. The report set out some key highlights, Chris Norton explained for example that the Fund was 91% funded and that investment in the Border to Coast Pensions Partnership (BCPP) continued to grow, reaching circa one-third of the Fund.
In response to question from Mike Snow and Keith Francis regarding level 3 assets Chris Norton noted that these were illiquid assets which are more difficult to value, and therefore Fund Managers were required to give more information and clarity on their governance arrangements for valuing these assets. Fund officers had not gone into the detail of the the valuation assumptions made but had sought information and assurances around the governance of the valuation by fund managers, for example asking questions such as was there an investment panel and was RICS guidance used for valuations. The value of these assets was calculated at fair value using appropriate accounting standards (e.g. US GAAP International accounting standards and chartered surveyors valuation standards). It was anticipated that the auditors would consider the valuations and any queries would be responded to.
Chris Norton also explained that reference in the accounts to private debt was where money was lent to businesses on the private market, where it was more difficult to sell those assets on in comparison to for example buying bonds on public markets that could be sold on more easily.
The Local Pension Board noted the draft 2020/21 Annual Report and Accounts.