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Pension Board |
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Date of meeting: |
5 June 2024 |
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By: |
Chief Finance Officer |
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Title: |
East Sussex Pension Fund (ESPF) 2023/24 Outturn report |
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Purpose:
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This report provides the financial outturn of the ESPF for the 2023/24 financial year |
RECOMMENDATIONS
The Pension Board is recommended to note the report.
1. Background
1.1 The East Sussex Pension Fund’s (the Fund) business plan and budget sets out the direction of travel, objectives and targets to be achieved in the financial management for the administering authority to carry out its statutory duties in a structured way. The Pension Committee is charged with meeting the duties of the Council as administering authority in respect of the Fund.
1.2 Budget estimates do not incorporate any provision for investment fees earned by the investment managers since there is limited scope for the Fund to influence these costs. This is due to the nature of the fees being based on factors outside the control of the Fund such as market movements along with other decisions affecting these such as strategic asset allocation changes.
2. 2023/24 Outturn Position
2.2 The final outturn position of 2023/24 is £4.082m, this is a decrease from the last projected position of £0.297m and also reflects an underspend against the approved budget of £0.381m. The 2023/24 outturn against budget line items is shown in the table below.
2.3 The underspend mostly relates to a reduction in staffing overhead costs, lower than expected IT systems costs due to negotiations in fee by paying costs for licenses upfront and lower inflation assumptions.
2023/24 Outturn Report
|
2022/23 Outturn |
Item |
2023/24 Budget |
2023/24 Actual Outturn |
2023/24 Forecast Outturn Q3 |
Variance to Previous Quarter |
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
Pension Fund Staff Costs |
|
|
|
|
|
1,482 |
Fund Officers |
2,023 |
1,958 |
1,968 |
10 |
|
1,482 |
Sub Total |
2,023 |
1,958 |
1,968 |
10 |
|
|
Oversight and Governance Expenses |
|
|
|
|
|
318 |
Investment Advice |
392 |
365 |
394 |
29 |
|
125 |
Actuarial Fund Work |
87 |
39 |
51 |
12 |
|
69 |
Actuarial Employer Work |
81 |
118 |
87 |
(31) |
|
(76) |
Employer reimbursement |
(81) |
(119) |
(87) |
32 |
|
56 |
Legal Fees |
69 |
38 |
46 |
8 |
|
48 |
Governance consultancy costs |
70 |
42 |
48 |
6 |
|
96 |
Audit |
71 |
115 |
123 |
8 |
|
636 |
Sub Total |
689 |
598 |
662 |
64 |
|
|
Investment Expenses |
|
|
|
|
|
101 |
Custodian |
97 |
107 |
98 |
(9) |
|
101 |
Sub Total |
97 |
107 |
98 |
(9) |
|
|
Administration Expenses |
|
|
|
|
|
438 |
IT Systems licenses costs and Hardware |
572 |
489 |
492 |
3 |
|
256 |
Overheads |
475 |
315 |
448 |
133 |
|
267 |
Admin operational support services |
279 |
246 |
309 |
63 |
|
13 |
Improvement projects |
100 |
106 |
99 |
(7) |
|
235 |
Consultancy |
45 |
61 |
80 |
19 |
|
7 |
Communications |
47 |
60 |
68 |
8 |
|
13 |
Training |
20 |
26 |
28 |
2 |
|
87 |
Subscriptions |
75 |
84 |
85 |
1 |
|
48 |
Other Expenses |
60 |
53 |
60 |
7 |
|
1,364 |
Sub Total |
1,673 |
1,440 |
1,670 |
230 |
|
|
Income |
|
|
|
|
|
(15) |
Other Income |
(19) |
(21) |
(19) |
2 |
|
(15) |
Sub Total |
(19) |
(21) |
(19) |
2 |
|
3,568 |
Total |
4,463 |
4,082 |
4,379 |
297 |
2.4 The outturn for the overheads is considerably lower than the previous forecast position. The overhead charge to the Fund is a combination of charges based on the staff which is to cover items such as office space the Fund uses. For the year end we were provided a complete breakdown of the costs to the Fund. This identified that previous reporting had double counted within the overhead classification some costs which are paid for as specific agreed costs to East Sussex County Council and do not form part of the overhead. This has led to a £133,000 reduction from the last forecast position. In addition there was duplication of costs anticipated in Admin operational support services that were specific to another budget line as the invoice was paid by ESCC on the Funds behalf, which is reflected by a saving of £63,000.
2.5 The forecast on the investment advice line was reduced it had been anticipated starting a couple of pieces of specific investment work that have since been deferred. This resulted in the reduction of £29,000 against the projected outturn.
2.6 The forecast for consultancy line was kept high at the last reported position as there is a one off piece of consultancy work on going with ITM and with Heywoods in regards to the integrated service provider project which may have occurred in 2023/24 but have slipped into the next financial year. This will come under the improvement projects line in the next years budget. This has produced an £19,000 underspend since the last projected outturn.
2.7 The pension fund received confirmation that the continuation of the Local Audit Grant for the 2023/24 audit in February this has resulted in the reduction in Audit costs for the year by £8,000.
3. Conclusion and reasons for recommendation
3.1 The Board is recommended to note the final 2023/24 outturn position.
Ian Gutsell
Chief Finance Officer
Contact Officer:
Russell Wood, Pensions Manager: Investments and Accounting
Email: Russell.wood@eastsussex.gov.uk