The report and appendix are attached.
John Gregory (Grant Thornton) introduced the item, stating that the Audit Plan for Warwickshire Pension Fund was structured similarly to that of the County Council. However, no separate value for money responsibilities were applicable to the audit of the Pension Fund. He advised that materiality conclusions had been based on a proportion of the net assets of the Fund, rather than gross revenue spend. This was a standard approach to pension fund auditing and provided a more meaningful benchmark. Attention had been given to estimation uncertainty, particularly the valuation of ‘level 3’ investments which were more difficult to measure.
In respect of pooled investments, Chris Norton (Strategy and Commissioning Manager, Treasury, Pension, Audit & Risk) advised that, once published, the Pension Fund Accounts would make specific reference to investments held with the Border to Coast Pension Partnership. This would provide transparency and enable members to scrutinise arrangements. It was agreed to cover this area at the Training and Development Session on 27 July 2021.
The Chair highlighted the actuarial challenges faced by pension funds in the wake of coronavirus. Debate was ongoing within the sector to assess the potential impact of the Pandemic on life expectancy and its effect on pension fund liabilities. He suggested that this form part of the Committee’s training programme.
Councillor Gifford commented that the trend towards investment in private equity presented a challenge; investments would be increasingly difficult to value.
Chris Norton stated that private equity accounted for a relatively small proportion of the total value of the Fund. In March 2021, the value for private equity was 5.2%, or £127m, and level 3 investments (private equity, private debt, and infrastructure) accounted for 11.5%, or £281m.
That the Committee notes the Annual Audit Plan for 2020/21 from the External Auditors.