Report and Accounts
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West Yorkshire Pension Fund Report and accounts For the year ended 31 March 2009 Administered by City of Bradford Metropolitan District Council. Pension Schemes Registry number 10041078. 2 Contents Foreword .............................................................. 4 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 ................................................ 38 Audit report ....................................................... 40 Accounts ............................................................. 42 Resolving complaints ...................................... 56 Further information and contacts ................. 58 3 1 Foreword 4 Foreword he equity markets suffered Bob Prance, one of the external investment significantly during 2008/09 as a advisers to WYPF, announced his intention Tresult of the ongoing credit crunch to retire in April 2009 following six years as and unprecedented world banking adviser. I wish to record my sincere thanks crisis. The collapse of Lehman Brothers, to Bob for his excellent advice to the which was allowed to happen by the Investment Panel and for his contributions US Government, was the catalyst to the to the very good investment performance turmoil amongst banks. As a result of this, achieved by WYPF during this period. West Yorkshire Pension Fund (WYPF) had I am pleased to report that Mark Stevens an overall investment return of -18.1% in was appointed to replace Bob, and Mark 2008/09. In comparative terms the return took up his duties as external investment was reasonably good in the circumstances, adviser in October 2008. and is testimony to how well-diversified Finally I would like to thank WYPF’s the investment portfolio is. in-house investment and pension It is pleasing to report that due to the administration staff for their continued good judgement of the in-house team, excellent performance and hard work, WYPF had no exposure to Icelandic banks. and to thank all the external investment advisers for their investment advice On the investment portfolio itself, very to the Panel. little new money was invested in Equities, with the WYPF’s very strong positive I trust you will find WYPF’s Report and cash flow being invested in Bonds and Accounts interesting and informative. Alternative Investments, and towards the end of the financial year in Credit. During the year I personally became very concerned about the ‘political’ risk to the future of the Local Government Pension Scheme due to falling funding levels within pension funds. WYPF has a very strong positive cash flow, and will have for the next 20 years, so there is no financial crisis in the WYPF, or amongst local authority pension funds. In terms of the funding position, funds will be in deficit at present, but these deficits will Councillor Ian Greenwood be addressed when we see a return to Chair of West Yorkshire Pension positive returns on stockmarkets over Fund Investment Advisory Panel the longer term. and Joint Advisory Group. 5 2 Management structure Members of the Investment Members of the West Yorkshire Advisory Panel Pension Fund Joint Advisory Group Councillor C Greaves Councillor C Greaves (Deputy Chair) Bradford Councillor I Greenwood (Chair) Councillor I Greenwood (Chair) Councillor H Middleton Councillor H Middleton Councillor A Feather Councillor A Feather Calderdale Councillor N Fekri Councillor B Metcalfe Councillor B Metcalfe Councillor E Firth Councillor E Firth Kirklees Councillor B Smith One vacancy One vacancy Councillor B Cleasby Councillor P Davey Leeds Councillor P Davey Councillor C Fox Councillor C Fox Councillor B Denson Councillor D Dagger Wakefield Councillor G Stokes Councillor G Stokes Councillor C Tennant Scheme Member Peter Meer Sarah Moses Representatives Robert Coleman Kenneth Sutcliffe D Harper –UNISON D Harper –UNISON Trades Union S Morris – GMB S Morris – GMB Representatives T Pearson (Deputy Chair) – UNISON T Pearson – UNISON External advisers Noel Mills Robert Prance Mark Stevens Director – West Yorkshire Pension Fund Stuart Imeson Director of Finance – Wakefield Judith Badger 6 Management structure Appointments made by the West Yorkshire Pension Fund in the administration of the Local Government Pension Scheme Actuarial services Mercers Mercury Court Tithebarn Street Liverpool L2 2QH AVC providers Equitable Life Assurance Society Scottish Widows P O Box 177 PO Box 17037 Walton Street 69 Morrison Street Aylesbury Edinburgh EH3 8WZ Buckinghamshire HP21 7YH Appointed persons (IDRP procedure) Jo Miller – Deputy Chief Executive, to January 2009. Stuart Imeson Tony Reeves – Chief Executive, from February 2009. Director – West Yorkshire Pension Fund City of Bradford Metropolitan District Council City of Bradford Metropolitan District Council City Hall Britannia House Bradford BD1 1HY Hall Ings Bradford BD1 1HX Auditors Audit Commission Kernel House Killingbeck Leeds LS14 6UF Banking services HSBC PO Box 45 47 Market Street Bradford BD1 1LW Computer services Heywood Comino plc 2 Victoria Street Vanguard House Altrincham Dewsbury Road Cheshire WA14 1ET Leeds LS11 5DD Legal adviser Medical adviser (IDRP procedure) Suzan Hemingway Dr S McVittie, MFOM Assistant Director Corporate Services (City Solicitor) National Britannia Limited City of Bradford Metropolitan District Council Stratford Road City Hall Solihull Bradford BD1 1HY West Midlands B90 4JJ 7 Pension administration 3 review Overview and legal status of West Yorkshire Pension Fund West Yorkshire Pension Fund (WYPF) is WYPF’s Pension Schemes Registry number part of the Local Government Pension is 10041078. Scheme (LGPS). Contributing members are contracted out The LGPS is a statutory scheme and the of the State Second Pension. benefits are paid under the provisions of the LGPS Regulations 1997, the LGPS HM Revenue and Customs (HMRC) has (Transitional Provisions) Regulations 1997, granted the scheme ‘exempt approval’ the LGPS Regulations 2008, and other for the purposes of the Income and applicable overriding legislation. The Corporation Taxes Act 1988. The scheme Government issues the pension scheme became a Registered Pension Scheme Regulations through the Communities under Part 4 of Chapter 2 of the Finance and Local Government (formerly the Act 2004 with effect from 6 April 2006. Office of the Deputy Prime Minister). The Regulations have the force of law. City of Bradford Metropolitan District Council is the administering authority for WYPF. Bradford Council’s administering authority responsibilities are met by WYPF’s in-house pensions administration and investment teams. 8 Pension administration review Achievements during the year this was replaced by a new arrangement with South Yorkshire Fire and Rescue WYPF won the ‘Large Scheme of the Year Authority for WYPF to administer the Fire (assets over £500m)’ award at the Pensions Service Pension Scheme. and Investments UK Scheme Awards in October 2008. Training and development WYPF also won the ‘Fund of the Year (large WYPF continued its commitment to the funds above £2 billion)’ award at the LGC training and development of all members Finance Awards in November 2008. of its staff, and to all representatives on In selecting WYPF for the awards the the Investment Advisory Panel and Joint judges cited the Fund’s excellent standards Advisory Group. both in terms of investment performance During the year WYPF supported a number and the service provided to customers. of staff with their studies for vocational qualifications. These included: Eighth annual meeting held WYPF held its eighth annual meeting • Pensions Management Institute (APMI) for scheme members at the Cedar Court Four students continued to make progress Hotel in Wakefield in October 2008. with the qualification throughout the Guest speaker was Robin Ellison – Head year. Two members of staff are now fully of Strategy, Pensions at law firm Pinsent qualified APMI members. Masons. • Institute of Payroll Professionals As usual the meeting was chaired by (IPP) Diploma Councillor Ian Greenwood, Chair of WYPF’s Two students successfully completed the Investment Panel and Joint Advisory qualification this year and another three Group. There were also presentations from students are making progress with the Stuart Imeson, WYPF’s Director, and from two-year qualification. the Fund’s external investment advisers, Noel Mills and Robert Prance. • Qualification in Public Sector Pensions Administration (QPSPA) Customer Services Week Five members of staff have now completed Between 6th and 10th October, WYPF this Vocationally Related Qualification took part in the National Customer (VRQ) and another 17 are making progress Services Week, with a series of charity towards completion. coffee mornings held in the Fund’s Contact Centre. In addition to the vocational training a number of other different training Visitors to our Contact Centre during opportunities were provided to develop the week were invited to take part in staff’s management and leadership, a customer survey which showed that pensions, technical and overriding visitors were extremely happy with the legislation and IT knowledge. level of service they got. They commented that