Report to:

Pension Committee

Date of meeting:

19 June 2024

By:

Chief Finance Officer

Title:

East Sussex Pension Fund (ESPF) 2023/24 Outturn report

Purpose:

 

This report provides the financial outturn of the ESPF for the 2023/24 financial year

 

 

RECOMMENDATIONS

The Pension Committee 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

2.1          The budget requirements for 2023/24 were set at £4.463m (£4.269m 2022/23 excluding manager fees) to support the Business Plan activities and administration of the Fund.

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 Pension Committee 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