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Pension Board |
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Date of meeting: |
30 May 2023 |
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By: |
Chief Finance Officer |
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Title: |
East Sussex Pension Fund (ESPF) 2022/23 Outturn report |
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Purpose:
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This report provides the financial outturn of the ESPF for the 2022/23 financial year |
RECOMMENDATIONS
The Pension Board is recommended to note the report.
1. Background
1.1 This report provides the outturn financial position for 2022/23 for the East Sussex Pension Fund (the Fund or ESPF).
1.2 The business plan and budget sets out the direction of travel, objectives and targets to be achieved in the management of the Fund. The budget and business plan for 2022/23 was approved by the Pension Committee at its meeting on 24 February 2022.
1.3 As reported at the last meeting on 22 February 2023, the budget estimates do not incorporate any provision for investment fees earned by the alternative fund managers since these are deducted at source by asset managers.
2. 2022/23 Final Outturn Position
2.1 The budget requirements for 2022/23 were set at £7.141m (£7.205m 2021/22) to support the Business Plan activities and administration of the Fund.
2.2 The final outturn position of 2022/23 is £5.743 (forecast £5.793m in Q3),a decrease of £0.050m from the last reported position. The 2022/23 outturn against budget line items is shown in the table below.
2.3 The underspend mostly relates to other administration projects which have been postponed whilst awaiting clarification from government and manager fees being invoiced lower than anticipated due to negative investment performance in the quarter. These were offset by some increases on staff costs recharges from East Sussex County Council and external audit fees. The main movements to the budget are detailed in Paragraphs 2.4 to 2.7.
202022/23 Outturn Report
|
2021/22 Outturn |
Item |
2022/23 Budget |
2022/23 Actual Outturn |
2022/23 Forecast Outturn Q3 |
Variance to Previous Quarter |
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
Pension Fund Staff Costs |
|
|
|
|
|
1,234 |
Staffing |
1,900 |
1,483 |
1,435 |
(48) |
|
2 |
Recruitment costs |
5 |
(1) |
- |
1 |
|
1,236 |
Sub Total |
1,905 |
1,482 |
1,435 |
(47) |
|
|
Pension Fund Oversight and Governance |
|
|
|
|
|
55 |
Actuarial |
200 |
125 |
133 |
8 |
|
57 |
Employer Actuarial work |
80 |
69 |
76 |
7 |
|
-38 |
Employer recharges |
(80) |
(76) |
(77) |
(1) |
|
- |
Governance consultancy costs |
- |
70 |
60 |
(10) |
|
- |
Communications |
42 |
7 |
5 |
(2) |
|
8 |
Training Costs |
30 |
13 |
20 |
7 |
|
47 |
External Audit – Grant Thornton |
35 |
59 |
24 |
(35) |
|
279 |
East Sussex County Council recharges |
249 |
206 |
184 |
(22) |
|
56 |
Legal Fees |
78 |
56 |
55 |
(1) |
|
70 |
Subscriptions and Other Expenses |
72 |
87 |
81 |
(6) |
|
534 |
Sub Total |
706 |
616 |
561 |
(55) |
|
|
Investment activities |
|
|
|
|
|
216 |
Investment Advice |
135 |
155 |
150 |
(5) |
|
21 |
ESG Advice |
50 |
24 |
24 |
- |
|
139 |
Custodian |
136 |
101 |
97 |
(4) |
|
110 |
ACCESS |
125 |
117 |
125 |
8 |
|
3,210 |
Investment Manager Fee Invoices |
2,872 |
2,175 |
2,208 |
33 |
|
3,696 |
Sub Total |
3,318 |
2,572 |
2,604 |
32 |
|
|
Pension Administration |
|
|
|
|
|
150 |
East Sussex County Council recharges |
281 |
194 |
198 |
4 |
|
98 |
System Services and License |
346 |
378 |
394 |
16 |
|
156 |
Consultancy & Service Providers - Benefits |
100 |
206 |
218 |
12 |
|
- |
Other Administration projects |
150 |
13 |
65 |
52 |
|
218 |
Admin operational support services |
289 |
262 |
269 |
7 |
|
14 |
Other Expenses |
50 |
35 |
52 |
17 |
|
(3) |
Other Income |
(4) |
(15) |
(3) |
12 |
|
633 |
Sub Total |
1,212 |
1,073 |
1,193 |
120 |
|
6,099 |
Total |
7,141 |
5,743 |
5,793 |
50 |
2.4 An increase of £48k and £22k is being reported in the outturn for 2022/23 on staffing and East Sussex County Council recharges for overheads, which are linked to staffing costs. This relates to an error on prior quarter budget monitoring that resulted in an accrual for 2021/22 being double counted in the totals, this has been corrected as part of the outturn position.
2.6 There is a reduction of £33k in the manager fees based on the values of the assets under management with the respective investment managers being lower than anticipated at the quarter end.
2.7 There is a reduction of a £52k that relates to the other administration projects this covers arrange of projects that were expected to start this year that have not progressed as anticipated. There are different reasons for each project such as the McCloud project is behind schedule with information gathering still taking place. Pension dashboard and member self-service work will take place in late 2023 and 2024.
3. Conclusion and reasons for recommendation
3.1 The Board is recommended to note the Final 2022/23 outturn position.
Ian Gutsell
Chief Finance Officer
Contact Officer:
Russell Wood, Pensions Manager: Investments and Accounting
Email: Russell.wood@eastsussex.gov.uk