Report to:

Pension Board

Date of meeting:

30 May 2023

By:

Chief Finance Officer

Title:

East Sussex Pension Fund (ESPF) 2022/23 Outturn report

Purpose:

 

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.

2.5          The expected expenditure for external audit has increased by £35k, following the receipt of the external audit workplan which advises the fee for 2022/23 is £12k higher than anticipated following prior year estimates. There is an expectation that the 2021/22 audit will also be around £47k however as this is still being undertaken there are unable to confirm the exact amount for 2021/22.

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