Report and Accounts for the Year Ended 31 March 2010 1 Contents
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West Yorkshire Pension Fund Report and accounts For the year ended 31 March 2010 1 Contents Foreword ............................................................. 5 Management structure ................................ 6 Pension administration review ................ 8 Membership trends ..................................... 12 Participating employers ............................ 14 Quality management .................................. 16 Policy statements .......................................... 18 Investment report ........................................ 20 Actuary’s report ............................................. 36 Audit report ..................................................... 38 Accounts ............................................................ 40 Resolving complaints .................................. 52 Further information and contacts ........ 54 2 3 Foreword Three years ago, when the fund exceeded £7 billion for the first time, I began my comments with the phrase ‘another steady year on stock markets saw the assets of the fund rise by £629 million’. I am pleased to say the fund is once again above £7 billion. In fact it is now valued at £7.9 billion, the assets having risen by 33%, almost £2 billion over the year. This reflects the very strong recovery in stock markets over the period, and although this demonstrates that volatility remains an issue for investors, many aspects of the financial crisis are behind us. The continuing efforts of the in-house investment team mean that the fund has top quartile investment performance among its peer group over three, five and ten year periods, for which I would like to thank them. As I indicated last year, I was very concerned about the ‘political’ risk to the future of the Local Government Pension Scheme (LGPS), and this has indeed now led to the appointment of the Hutton Commission on the future of public-sector pensions. I am satisfied that once the facts have been examined, the LGPS, which has been the whipping boy in the press due to its transparency and accountability, will prove to be part of the solution, whereas the unfunded schemes run by central government will be found wanting. We are awaiting the results of the actuarial valuation based on the valuation at 31 March 2010. Based on the policy of the fund not to vary the contribution rates if the valuation falls between 90% and 110% of liabilities, we do not expect to have to vary contributions significantly for the majority of employers. I am very proud to say that the fund provides a first-class administration service for over 220,000 members. This year the quality of that service has been recognised by the award of the Best Benefit Statement (Public) award at the Pension Scheme of the Year Awards. In addition to adding my congratulations to the pensions administration staff, I would like to thank them for their hard work which results in such a creditable performance. Finally, it would be remiss of me not to give the credit for the success of both the investment and administration teams described above to Stuart Imeson who retired as director during the year after a long and distinguished career of service to both this fund and the industry, which was publicly acknowledged during the year when he received the Investment Officer of the Year Award. Councillor Ian Greenwood Chair of West Yorkshire Pension Fund Investment Advisery Panel and Joint Advisery Group 4 5 Appointments made by West Yorkshire Pension Fund in the Management structure administration of the Local Government Pension Scheme 2009/2010 Actuarial services Hewitt 40 Queen Square Bristol Members of the Investment Members of the West Yorkshire BS1 4QP Advisery Panel Pension Joint Advisery Group AVC providers Councillor C Greaves Councillor C Greaves (Deputy Chair) Scottish Widows Equitable Life Assurance Society PO Box 17037 PO Box 177 Bradford Councillor I Greenwood (Chair) Councillor I Greenwood (Chair) 69 Morrison Street Walton Street Edinburgh Aylesbury Councillor H Middleton Councillor H Middleton EH3 8WZ Buckinghamshire HP21 7YH Councillor A Feather Councillor A Feather Prudential Calderdale Councillor B Metcalfe Councillor N Fekri AVC Customer Services Stirling Councillor B Metcalfe FK9 4UE Councillor E Firth Councillor E Firth Appointed Persons (IDRP Procedure) Kirklees Councillor D Ridgway from Sept 2009 Councillor B Smith Tony Reeves Stuart Imeson to November 2009 Chief Executive Rodney Barton from December 2009 Councillor D Ridgway from June 2009 City of Bradford Metropolitan District Council Director – West Yorkshire Pension Fund Councillor P Davey Councillor B Cleasby City Hall City of Bradford Metropolitan District Council Bradford BD1 1HY Britannia House Leeds Councillor C Fox Councillor P Davey Hall Ings Bradford BD1 1HX Councillor C Fox Auditors Councillor D Dagger Councillor B Denson Audit Commission Councillor G Stokes Councillor G Stokes Wakefield 3 Leeds City Office Holbeck Councillor C Tennant to June 2009 Leeds Councillor D Dagger from June 2009 LS11 5BD Peter Meer Sarah Moses Scheme Member Banking services Representatives Robert Coleman Kenneth Sutcliffe HSBC D Harper – UNISON One vacancy PO Box 45 47 Market Street Trades Union S Morris – GMB S Morris – GMB Bradford Representatives BD1 1LW T Pearson (Deputy Chair) – UNISON T Pearson – UNISON Computer services External advisers Heywood Comino plc 2 Victoria Street Vanguard House Noel Mills Altrincham Dewsbury Road Robert Prance Cheshire Leeds WA14 1ET LS11 5DD Mark Stevens Legal adviser Medical adviser (IDRP Procedure) Director – West Yorkshire Pension Fund Suzan Hemingway Dr. B Yew, AFOM Stuart Imeson to November 2009 Assistant Director Corporate Services (City Solicitor) Connaught City of Bradford Metropolitan District Council Greyfriars Rodney Barton from December 2009 City Hall Coventry Assistant Director of Finance – Bradford Bradford CV1 3PJ BD1 1HY Sue Mawson 6 7 Pension Investors In People review The increase is linked to movements in the Retail Price Index. The increase also applies to members who have During September 2009 WYPF underwent an Investors left the scheme but who have deferred benefits in WYPF administration in People review as part of the City of Bradford for payment later, usually at normal retirement age. Metropolitan District Council work, to determine whether the council as a whole continues to meet the This year the increase was applied on 6 April 2009 and, review standards to be recognised as an Investor in People. The for those who met the qualifying conditions, the basic review team found that the section met all 10 indicators increase was 5.0%. and mentioned the following good practices: • a fully embedded appraisal process Pension administration section • use of supervisory journals, and As in previous years, the workload of the pension • an embedded culture of mentoring and coaching. administration section continued to expand, with an increase in the number of scheme members Training and development participating in the WYPF. Service delivery continues to be underpinned by WYPF’s accreditation to Overview and legal status of West WYPF continued its commitment to the training and ISO 9001:2008, the Quality Management System. Yorkshire Pension Fund WYPF’s 2009 benefit statement design gained the development of all members of its staff, and to all Best Benefit Statement (Public) award at the Pension representatives on the Investment Advisery Panel and WYPF staff are committed to providing the best possible West Yorkshire Pension Fund (WYPF) is part of the Local Scheme of the Year Awards held in London. Joint Advisery Group. service to customers, and will continue to work to Government Pension Scheme (LGPS). ensure that WYPF’s service represents Best Value to all During the year WYPF supported a number of staff its stakeholders. The cost of the pensions administration The LGPS is a statutory scheme and the benefits are Ninth annual meeting held with their studies for vocational qualifications. These service in WYPF, when compared with all other local paid under the provisions of the LGPS Regulations 1997, included: authority pension funds, shows it to be well below Max Ramirez, a Pension and Insurance Specialist with the LGPS (Transitional Provisions) Regulations 1997, the national averages. In 2009/10, the cost for WYPF equated Goldman Sachs, gave the keynote address at our ninth • Pensions Management Institute (APMI) LGPS Regulations 2008, and other applicable overriding to £23.44 per scheme member, and compared with the annual meeting for members at the Queens Hotel in • Institute of Payroll Professionals (IPP) Diploma legislation. The government issues the pension scheme average for all local-authority pension funds of £28.31 Leeds on 23rd October 2009. regulations through the Department of Communities • Vocationally Related Qualification (VRQ) in Public per scheme member. and Local Government. The Regulations have the Sector Pensions Administration (QPSPA) The meeting was chaired as usual by Councillor Ian force of law. Greenwood, chair of WYPF’s Investment Panel and Joint In addition to the vocational training a number of other LGPS review Advisery Group. There were also presentations from City of Bradford Metropolitan District Council is the different training opportunities enabled staff to develop Stuart Imeson, WYPF’s director, and from the fund’s Since July 2001 the framework of the Local Government administering authority for WYPF. Bradford Council’s their management and leadership, pensions, technical external investment