Agenda item

Members were informed that the Pensions Fund Annual report had been completed and would be handed to EY the following week for their audit. It had been demonstrated in the report that there had been a collaborative approach between EY and Hillingdon regarding the level 2 and level 3 adjustments. It was noted that, on page 26 of the EY report there had been some tidying up in relation to pricing.

Suresh Patel and Larissa Midoni of EY presented the report. Key points included:

·         The Pensions Fund audit had nearly been completed. Membership data testing was the principal area of outstanding work;

·         Re. pooled property investments, valuers of property had been required to insert a caveat in their valuation reports re. the impact of Covid-19; an emphasis and matter paragraph had been inserted in EY’s auditing report to reflect this;

·         The auditors were happy with the Pensions Fund disclosures in the accounts, including the cash flow forecast of the Fund and were satisfied with the position of the Pension Fund for the next 12 months;

·         It had been agreed that pooled property assets be classified as level 3 due to increased concern regarding valuation of property due to the impact of Covid-19;

·         Membership data quality was currently being tested – this data test was undertaken every 3 years;

·         Work was being undertaken with managers to obtain supporting documents to support numbers for pensioners;

·         Some of the outstanding matters set out in Appendix B of the report had now been progressed. It was estimated that the Annual Report would be ready in early November in time for sign off.

Members requested further clarification regarding issues with the membership data. It was confirmed that other Local Government Pensions Fund schemes were having similar issues. In Hillingdon, there were some concerns regarding the quality of the data / the data itself. In some cases there were missing documents relating to older members of the Fund. Furthermore, some data had been stored in an old system and management had been unable to retrieve the information. The Committee was advised that there had been some data gaps when the information was transferred from Capital to Surrey. Officers had been running projects throughout the year to improve the data quality – there had been significant improvements but gaps still existed. This was an ongoing process in terms of data cleansing and keeping the data up-to-date. EY had requested copy payslips but Surrey could not provide these as soft copies were not held in their systems.

In response to enquiries from the Committee, it was confirmed that the data set was generally good for actual and pensioner members and the gap related mainly to deferred members. Councillors requested clarification as to the percentage of the overall fund that fell within the category of problematic data. Officers agreed to explore this further and report back to the Committee.

It was further confirmed that a recent address tracing exercise had been quite successful and the quality of the information had improved recently. Deferred members were monitored regularly and projects were in place to look at missing data in relation to these members.

The officer’s recommendation was moved, seconded and, when put to a vote, unanimously agreed.

RESOLVED: that the Pensions Committee noted the draft EY’s findings on the audit of the Pensions Fund accounts for 2019/20.