Report and accounts 2011 · 2015. 5. 8. · Report & Accounts 2011 Report & Accounts 2011 4 Kent...
Transcript of Report and accounts 2011 · 2015. 5. 8. · Report & Accounts 2011 Report & Accounts 2011 4 Kent...
Kent County Council Pensions Section
Report & Accounts 2011Superannuation Fund
In association with Local Authorities and other bodies in Kent
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1 Kent County Council Superannuation Fund Kent County Council Superannuation Fund 1
Page No
Members and Advisers 2
Scheme Documentation 3
Chairmans Introduction 4
Investment Report 6
Scheme Details 11
Pension Section Performance 14
Report of the Consulting Actuaries 15
Statement of Responsibility 17
Audit Opinion 18
Accounting Policies and other Procedures 20
Fund Account 22
Net Assets Statement 24
Notes to the Accounts 25
Risk Management 38
List of Employing Bodies 40
The Fund Profile - 5 Year Summary 45
Appendix 1: Major UK and Overseas Equity and Unit Trust Holdings by Value 46
Appendix 2: Property Valuation 48
Contents
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Administering Authority Kent County Council
Kent County Council Members as at 31 March 2011 Mr J E Scholes Chairman (Conservative)Mr D S Daley Vice Chairman (Liberal Democrat)Mr J A Davies (Conservative)Mr M Jarvis (Conservative)Mr J F London (Conservative)Mr R A Marsh (Conservative)Mr R J Parry (Conservative)Mr M V Snelling (Conservative) Other Local Authority Representatives Mr K Bamber (Conservative) (Medway Council)Mr J Burden (Labour) (Gravesham Borough Council)Mr P Clokie (Conservative) (Ashford Borough Council)Mr R Packham (Liberal Democrat) (Ashford Borough Council) Union Representative Mr S Richards
Staff Representative Ms J De Rochefort
Kent Active Retirement Fellowship Mrs A DickensenMrs M Wiggins
Investment Managers and Advisers Baillie Gifford & CoGoldman Sachs Asset Management LimitedGMOHarbourvest PartnersHenderson Fund ManagementImpaxInvesco PerpetualPartners GroupSchroder Investment Management LimitedState Street Global Advisers LimitedYFM Equity PartnersDTZ Investment Management Limited Investment Consultant Hymans Robertson LLP Consulting Actuaries Barnett Waddingham LLP
Auditors Audit Commission Performance Measurers The WM CompanyInvestment Property Databank Limited AVC Providers Equitable Life AssurancePrudential Assurance CompanyStandard Life Assurance County Officers Mr A Wood, Acting Corporate Director of Finance and ProcurementMr N Vickers, Head of Financial ServicesMr G Wild, Director of Governance and Law
Members & Advisers
County Council Members are appointed by the respective political parties.
The District Council representatives are appointed by the respective District Council, in connection with the Association of District Councillors.
Other representatives are nominated and appointed by the respective bodies.
The same appointees are responsible for the removal of their representatives.
Appointments and removals are noted at the Superannuation Fund Committee meetings.
Enquiries and more detailed information on the Fund benefits and contributions can be obtained by contacting Pat Luscombe (Pensions Manager) at 2nd Floor, Brenchley House, Week Street, Maidstone, Kent (01622 694714).
Enquiries regarding the Fund’s accounting and investment activities should be made to Nick Vickers (Head of Financial Services) at County Hall.Sessions HouseCounty HallMaidstoneKentME14 1XQ(01622 694603)
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The Fund is required by the Department for Communities & Local Government to maintain certain formal documents, rather than reproduce them in this report they are on the www.kent.gov.uk website.
The key documents are:
• Statement of Investment Principles
• Funding Strategy Statement
• Environmental, Social and Governance Investment
• Policy Statement
• Governance Compliance Statement
• Communication Policy
Scheme Documentation
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Chairman’s Introduction
The last year has been another highly positive one for the Fund. Overall the Fund increased in value by £316m and we received an encouraging actuarial valuation. The Fund is in good shape but there are still huge risks in financial markets and we will look to protect the gains that we have made and reduce risk by spreading our investments across a wider range of assets moving forward.
I would now like to address some of the major issues for the Fund in the year:
Actuarial Valuation
The outcomes of the valuation at Fund level were highly satisfactory with the funding level increasing by 4% to 77% and at Fund level the employer contribution rate reducing by 2%-the actual rates paid reflect changes at individual employer level. Of the 16 local authority employers 15 saw a reduction in the rate the actuary was prepared to certify. The decision to appoint Barnett Waddingham as actuary in 2009 has been confirmed as providing a technically robust approach which reflects the reality of employer’s financial positions as much as possible.
Fund Managers
This was a strong year for fund performance with a total return of +9% outperforming the fund benchmark of +8.1%. The largest equity mandates in the Fund; Schroders UK equities and Baillie Gifford overseas equities performed particularly strongly.
The Fund removed Alliance Bernstein in August after a prolonged period of under performance in global equities. These monies were then placed in passive global equities funds managed by State Street.
In April 2010 £25m was invested with Impax Asset Management, a global equity manager which invests in companies that derive over 50% of their revenue from environmental themes.
Alternative Investments
The Fund needs to spread its investments into different types of assets to reduce the exposure that the Fund has to Equities. The Fund has deliberately sought to do this as a relatively low risk way through the following investments:
Private equity manager appointment – Harbourvest was appointed to manage a £75m private equity fund of funds mandate in May 2010 and by the end of March 2011 £60m had been committed.
Infrastructure manager appointment – Partners Group was appointed to manage a £75m infrastructure fund of funds mandate in November 2010 and this was fully committed by March 2011.
Reflecting our very deliberate approach to where we take risk in March 2011 we decided not to proceed with the appointment of a currency manager.
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Treasury Management
A separate bank account for the Superannuation Fund has been set up and cash is managed on a fully segregated basis using counterparties agreed by the Superannuation Fund Committee. The counterparties are Royal Bank of Scotland, NatWest Bank and the JP Morgan Sterling Liquidity Fund.
Lord Hutton’s Review of Public Sector Pensions
All the public sector pension schemes are under review and the Government’s response to Lord Hutton’s review is due in the autumn. Inevitably there will be major changes to the Local Government Scheme in the next 2-3 years and the Fund will need to communicate well with scheme members and employers and be alert to what could be fundamental changes which may require a major revision of our investment strategy.
Whilst we support change the funded position of the LGPS does put us in a much stronger position than unfunded public sector schemes and this seems to have been ignored in Lord Hutton’s review.
Development of the website
The website www.kentpensionfund.co.uk has been fully updated and we want it to become much more central in how we communicate with scheme members and employers.
James Scholes
Chairman – Superannuation Fund Committee
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Investment Report
Asset Allocation
The strategic asset allocation of the Fund is:
The asset allocation is based upon detailed financial modelling undertaken by Hymans Robertson which evaluates return scenarios against measures of Prudence, Affordability, Stability and Stewardship.
The actual allocation at 31 March 2011 reflects the strength of equity returns. The Superannuation Fund Committee meets 6 times a year and at each meeting considers whether any re-balancing is required.
Benchmark Actual at 31 March 2011
% % % %
Equities:
UK 34.5 37
Global 34.5 69 37 74
Fixed Income 15 14
Property 11 9
Cash/Other Assets
5 3
100 100
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Market Returns to 31 March 2011
All equity markets other than Japan performed strongly during the year. Returns in the major asset classes were:
The relative performance of the Fund for 2010-11 was:
This placed the Fund in the 22nd percentile over 1 year, 31st percentile over 3 years and 60th percentile over 5 years compared with other Local Authority Funds.
1 year 3 year 5 year
% % %UK Equities +8.7 +5.4 +3.7
North American Equities +9.6 +10.5 +5.0
European Equities ex UK +7.5 +3.3 +5.0
Japan Equities -4.0 +3.6 -3.3
Pacific ex Japan equities +14.6 +13.8 +13.0
Other International Equities +8.2 +8.7 +5.2
UK Bonds +5.1 +5.3 +4.8
UK Index Linked +6.5 +5.0 +6.2
UK Property +10.7 -1.4 -0.2
Cash +0.4 +1.5 +3.0
Kent Fund WM Local Authority Universe
Average Return
% %
1 Year 9.0 8.1
3 Year 6.2 5.75 Year 3.6 4.1
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Investment Managers
All assets of the Fund other than cash are under external management. All manager appointments are made through European Union public service tender processes, in a small number of cases direct investments are made in funds.
The Manager Structure as at 31 March 2011 was:
More details of the mandates are contained in the Statement of Investment Principles and committee papers available at www.kent.gov.uk/pensions
UK Equities Schroder Investment Management
Invesco Perpetual
State Street Global Advisors
Global Equities Baillie Gifford & Co
GMO
Schroder Investment Management
State Street Global Advisors
Impax Asset Management
Fixed Income Goldman Sachs Asset Management
Schroder Investment Management
Property DTZ Investment Management
Alternatives Henderson Secondary PFI Funds
Partners Group Global Infrastructure
YFM Private Equity
Harbourvest Private Equity
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Performance to 31 March 2011
Investment Manager Performance
Overall in the year the Fund returned +9% against a benchmark of +8.1%. The Fund spreads its assets across a wide range of different type of asset and also across managers who are taking different approaches to adding value. No individual manager or style of management will always be successful.
The main reason for the outperformance in the year was the strong performance of the 2 largest equity mandates, Schroders’ management of UK equities and Baillie Gifford’s management of overseas equities. These managers’ 3 year track records are also very strong.
The Invesco UK equity mandate is much more defensively positioned than our other equity mandates and we expect strong outperformance in this financial year.
1 Year 3 Year
Fund %
Benchmark %
Fund %
Benchmark %
UK Equity
Schroders UK 12.9 8.6 8.6 5.3
State Street 8.8 8.7
Invesco 8.8 8.7 5.4 5.4
Overseas Equity
Baillie Gifford 12.4 7.5 11.1 7.6
GMO 6.5 7.4 6.1 7.6
Impax n/a n/a n/a n/a
Schroders 10.2 7.4 10 7.6
State Street 7.8 8
Fixed Interest
Goldman Sachs Fixed Interest 5.5 5.3 6.5 5.6
Schroders Fixed Interest 4.1 3 7 4.8
Property
UK Property 10.7 10.7 1.9 -1.4
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The Fund removed Alliance Bernstein as manager of global equities last August after a period of poor performance where the Fund was not confident of out performance moving forward. Alliance Bernstein have since seen a very large outflow of funds and this was a well timed decision.
The Fund has a significant element of passive equity exposure managed by State Street. This is in part a holding position until funds are actually invested in alternative areas such as Private Equity and Infrastructure, but also reflects an industry approach of getting some of our equity exposure very cheaply through a passive manager.
Both our Fixed Income managers Goldman Sachs and Schroders added value compared with their benchmark.
Commercial Property returns were good in the year but the recovery is stalling and Commercial Property values still remain well down from their peak. The Fund is looking to add to its’ property exposure but only in a well risk managed way.
The fund’s major equity holdings are shown in Appendix 1 page 46 and a complete list of properties owned is shown in Appendix 2 page 48.
Custodian
The Fund uses an independent custodian, JP Morgan, to safeguard its segregated financial assets. The custodian is responsible for the safe-keeping of those assets, the settlement of transactions, income collection and other administrative actions in relation to assets.
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Kent County Council administers the Kent Pension Fund on behalf of its own employees and the other employing bodies. Scheme regulations are set by Central Government. From April 2008 major changes were made to the benefit structure by Central Government.
Benefits
The scheme is a defined benefit occupational pension scheme which provides a significant range of benefits to its members. Membership is open to all employees of qualifying employers who have a contract of employment of at least 3 months and are under the age of 75 and most are automatically admitted to membership of the scheme upon commencing employment.
Scheme benefits are based upon the individual’s length of period of membership and ‘final salary’ which will generally be the final 12 months pensionable pay of the scheme member.
For membership built up after 31 March 2008 members will receive an annual pension based on 1/60th of their final year’s pensionable pay and will have the option to take part of the pension as a tax free lump sum. For membership before 1 April 2008 they will receive an annual pension based on 1/80th of their final year’s pensionable pay and an automatic tax free lump sum of 3 times the pension.
The amount that the employee contributes has been amended from April 2008, these contributions range between 5.5% and 7.5% of pay with the rate being determined by the level of the member’s pay.
If a member has to leave work at any age due to permanent ill health the scheme provides a tiered ill health retirement package. If the member is unlikely to be capable of gainful employment within a reasonable time after they leave they will receive increased benefits payable immediately. A scheme member needs to have total membership of at least 3 months to qualify for ill health benefits.
Where a scheme member dies in service a lump sum is payable by way of a death grant equal to three years’ pay. Scheme members are able to make an ‘expression of wish’ concerning to whom the grant should be payable in the event of their death.
The scheme also makes provision in the event of death for the payment of pensions to surviving spouses, civil partners, eligible children and, subject to certain qualifying conditions, nominated co-habiting partners.
Increasing benefits
In addition to the scheme benefits members may, if they wish, pay extra to increase their retirement benefits. They can do this either by paying additional contributions to buy extra LGPS pension, by making payments to the scheme’s Additional Voluntary Contributions (AVC) arrangements, or by making payments to a personal pension, stakeholder pension or Free-standing AVC scheme of their choice.
Full details of the scheme are provided on the www.kent.gov.uk/pensions website.
Scheme Details
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Communications
The Pension Section communicates with members and employers in a variety of ways. Newsletters are sent to both pensioners and existing scheme members. Pension forums are used to communicate with employers. Scheme members and pensioners have access to the Pensions Section to make written, e-mail or telephone enquiries. Scheme members receive an annual benefit illustration and each pensioner and deferred pensioner is advised annually of the indexation increase to their pension.
The Kent Active Retirement Fellowship (KARF) has been established as a facility in which pensioners can become members and participate in a wide variety of activities. KARF has established groups throughout the County and would welcome new members.
Internal Dispute Procedure
The Kent Pension Scheme has a formal Internal Dispute Procedure to consider a member dispute over a decision made either by a scheme employer or Kent County Council acting as the administering body. An independent person is appointed to consider an appeal made by a scheme member.
As at 31 March 2011, scheme employers make up the membership as follows:
2010/11 Disputes considered 2009/10 Appeals upheld
5 0
Contributors Pensioners Deferred Pensioners
Kent County Council 21,956 15,509 16,559
Medway Council 5,134 2,203 3,482
Kent Police Authority 2,731 1,369 1,495
Kent Fire Authority 280 126 106
District Councils 4,737 7,515 4,805
Other Scheduled 6,658 2,584 4,473
Total Scheduled bodies 19,540 13,797 14,361
Admitted Bodies 1,912 1,243 1,698
Grand Total 43,408 30,549 32,618
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Member Age Profile
As at 31 March 2011, contributing membership is made up of the following age bands:–
Under 20 172
20 – 25 2,112
26 – 30 2,793
31 – 35 3,394
36 – 40 5,043
41 – 45 7,316
46 – 50 7,891
51 – 55 6,727
56 – 60 5,194
61 – 65 2,468
66 – 70 267
Over 70 31
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The Pension section is subject to performance monitoring, both internally and externally against other Local Authority Pension Funds (CIPFA Benchmarking). The performance outcomes are shown in the tables below.
CIPFA Benchmark Survey
The Kent Pension Fund administration section participates annually in the CIPFA Benchmark survey. The survey compares the cost of administration with 63 other Local Authority Administering Bodies across the UK. The results contained in these accounts are in respect of the Kent Pension Section performance in the year ending 31 March 2010.
The results above place Kent at 17th of 63 authorities in terms of the cost of administration per member of the scheme.
Pension Section Performance 2010/11
Type of Case Target Time Number Processed Processed Within Target
Calculation and payment of retirement award
20 days from receipt of paperwork
2,076 99%
Calculation and payment of dependants benefit
15 days from receipt of paperwork
315 99%
Provision of estimates 20 days from receipt of paperwork
2,861 98%
Correspondence Full reply within 15 working days
1,705 99%
Kent Pension Scheme All Scheme Average
Total cost of administration per scheme member
£19.12 £22.72
Payroll costs per pensioner (including staff) £1.43 £3.49
Staff costs per Scheme Member (ex Payroll) £10.19 £10.05
IT Costs per member £1.49 £2.14
Communication costs per member £2.03 £0.92
Actuarial costs per member £2.03 £1.11
Accommodation costs per member £1.23 £0.75
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Introduction
As required by Regulation 36 of The Local Government Pension Scheme (Administration) Regulations 2008 (“the Regulations”) as amended, an actuarial valuation of the Fund was carried out as at 31 March 2010.
2010 Valuation
The 2010 valuation certified a common contribution rate of 20.8% of pensionable pay to be paid by each employing body participating in the Kent County Council Pension Fund. In addition to this each employing body has to pay an individual adjustment to reflect its own particular circumstances and funding position within the Fund. Details of each employer’s contribution rate are contained in the Statement to the Rates and Adjustment Certificate in the triennial valuation report.
Employer Contribution rates
Employers’ contributions rates, in addition to those paid by the members of the Fund, are set to be sufficient to meet:
• The ongoing annual accrual of benefits for active members in respect of each employer that build up each year within the Fund, allowing for future pay increases and increases to pension in payment when these fall due.
• Plus an amount to fund the difference between each participating employer’s notional share of value of the Fund’s assets compared with 100% of their liabilities in the Fund.
Asset Value and Funding Level
The value of the Fund’s assets as at 31 March 2010 for valuation purposes was £2,780m which represented 77% of the Fund’s accrued liabilities at that date allowing for future increases in pay and pensions in payment.
The contribution rates were calculated using the Projected Unit Method.
The liabilities were valued allowing for expected future investment returns and increases to benefits as determined by market levels at the valuation date as follows;
• Rate of return on investments 6.6% per annum
• Rate of increases in pay 5.0% per annum
• Rate of Increases to pensions in payment 3.0% per annum
Report of the Consulting Actuaries
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Post Valuation Events – Changes in market conditions
Since March 2010, we estimate that investment returns are likely to have been slightly more than assumed at the 2010 valuation although expectations for future levels of inflation have increased.
Overall, we estimate that the current financial position of the Fund will not be materially different to the position as at the 2010 valuation.
The next actuarial valuation is due as at 31 March 2013 and results will be reported during 2013/14.
Graeme D Muir FFA
Partner
28 July 2011
For and on behalf of Barnett Waddingham
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The Authority’s Responsibilities
The authority is required:
• to make arrangements for the proper administration of its financial affairs and to secure that one of its officers has the responsibility for the administration of those affairs. In this authority, that officer is the Corporate Director of Finance and Procurement.
• to manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets.
Corporate Director of Finance and Procurement’s Responsibilities
The Corporate Director of Finance and Procurement is responsible for the preparation of the pension fund’s Statement of Accounts in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom, and is required to present fairly the financial position of the Superannuation Fund at the accounting date and its income and expenditure for the year ended 31 March 2011.
In preparing this statement of accounts, the Corporate Director of Finance and Procurement has:
• selected suitable accounting policies and then applied them consistently;
• made judgements and estimates that were reasonable and prudent;
• complied with the Code.
The Corporate Director of Finance and Procurement has also:
• kept proper accounting records which were up to date;
• taken reasonable steps for the prevention and detection of fraud and other irregularities.
Acting Corporate Director of Finance and Procurement
Statement of Responsibilities for the Statement of Accounts
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Independent auditor’s report to Members of Kent County Council
Opinion on the pension fund accounting statements
I have audited the pension fund accounting statements for the year ended 31 March 2011 under the Audit Commission Act 1998. The pension fund accounting statements comprise the Fund Account, the Net Assets Statement and the related notes. These accounting statements have been prepared under the accounting policies set out in the Statement of Accounting Policies.
This report is made solely to the members of Kent County Council in accordance with Part II of the Audit Commission Act 1998 and for no other purpose, as set out in paragraph 48 of the Statement of Responsibilities of Auditors and of Audited Bodies published by the Audit Commission in March 2010.
Respective responsibilities of the Corporate Director of Finance and Procurement and auditor
As explained more fully in the Statement of the Corporate Director of Finance and Procurement Responsibilities, the Corporate Director of Finance and Procurement is responsible for the preparation of the pension fund’s Statement of Accounts in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom. My responsibility is to audit the accounting statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require me to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the accounting statements sufficient to give reasonable assurance that the accounting statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the fund’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the fund; and the overall presentation of the accounting statements. I read all the information in the annual report to identify material inconsistencies with the audited accounting statements. If I become aware of any apparent material misstatements or inconsistencies I consider the implications for my report.
Opinion on accounting statements
In my opinion the pension fund’s accounting statements:
• give a true and fair view of the financial transactions of the pension fund during the year ended 31 March 2011 and the amount and disposition of the fund’s assets and liabilities as at 31 March 2011; and
• have been properly prepared in accordance with the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom.
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Opinion on other matters
In my opinion, the information given in the annual report for the financial year for which the accounting statements are prepared is consistent with the accounting statements.
Matters on which I report by exception
I have nothing to report in respect of the governance statement on which I report to you if, in my opinion the governance statement does not reflect compliance with the Local Government Pension Scheme (Administration) Regulations 2008 and related guidance.
Darren Wells
Officer of the Audit Commission
1st floor Millbank Tower
MillbankLondon
SW1P 4HQ
19th October 2011
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1. CIPFA Code of Practice on Local Authority Accounting in the United Kingdom 2010/11
The Pension Fund accounts have been prepared in accordance with the CIPFA Code of Practice on Local Authority Accounting in the United Kingdom 2010/11 based on International Financial Reporting Standards. The accounts are prepared on a going concern basis. The accounts for 2010/11 are the first to be prepared on the basis of IFRS. There were no material changes to the accounts as the result of the IFRS transition.
2. Investments
Quoted investments are stated at market value based on the closing bid price quoted on the relevant stock exchange on 31 March 2011. Unit Trusts and managed funds are valued at the closing bid price. Unquoted investments are valued by the fund managers at the year end at fair value.
Derivatives with an initial purchase price are included in the accounts as purchases. Those that do not have an initial purchase price but require a deposit such as an initial margin to be placed with the broker are recorded at cost on purchase. Derivative contracts are included in the net asset statements at fair value.
The industrial and commercial properties were valued at open market prices in accordance with the valuation principles laid down by the Royal Institution of Chartered Surveyors. The valuation has been undertaken by Colliers CRE, as at 31 December 2010. The results of the valuation have then been indexed in line with the Investment Property Databank Monthly Index movement to 31 March 2011.
3. Currency Transactions
Assets and liabilities in foreign currency are translated into sterling at exchange rates ruling at the year-end. Differences arising on the translation of investments are included in investment gains.
All foreign currency transactions are translated into sterling at exchange rates ruling at the transaction date.
4. Contributions, Benefits and Transfer Values
All contributions are accounted for on an accruals basis and are at rates as specified in the rates and adjustments certificate. Payment of pensions and pensions increases are accounted for on an accruals basis. Lump sum payments are accounted for on the date of retirement or on death.
Transfer values into and out of the Fund, return of contributions and other intermittent transactions are not dealt with on an accruals basis but are included in the accounts when the transactions occur.
Accounting Policies
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5. Investment Income
Dividends, rents and cash deposits have been accounted for on an accruals basis and where appropriate from the date quoted as ex-dividend (XD). Foreign income has been translated into sterling at the rate ruling at the date of the transaction.
Income arising from overseas investments is subject to deduction of withholding tax unless exemption is permitted by and obtained from the country of origin.
6. Expenditure
All expenses and benefits are accounted for on an accruals basis.
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For the year ended 31 March
Contributions and Benefits Notes 2010-11 2009-10 £000’s £000’s
Contributions Receivable
from employers 4 180,822 175,531
from employees 4 48,866 48,849
Transfers in 5 13,929 14,876
243,617 239,256
Benefits Payable
Pensions 6 (126,220) (123,803)
Lump Sums 6 (40,803) (33,353)
Payments to and on account of leavers
Refunds of contributions (24) (231)
Transfers Out 7 (10,595) (18,678)
Other payments
Administrative & other expenses borne by the scheme 8 (2,868) (3,018)
(180,510) (179,083)
Net additions from dealings with Members 63,107 60,173
Fund Account
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Returns on Investments Notes 2010-11 2009-10 £000’s £000’s
Investment Income 9 56,566 65,151
Change in Market value of investments 10 203,838 689,461
Loss on Icelandic Investment 12 874
260,404 755,486
Investment Management Expenses
Investment Managers 8 (5,342) (5,116)
Actuarial (Investment Consultancy) (115) (107)
Performance Measurement (55) (50)
Other Investment 8 (1,020) (610)
(6,532) (5,883)
Net Return on Investments 253,872 749,603
Net Increase in Fund during the year 316,979 809,776
Opening net assets of the scheme at 1 April 2,885,463 2,075,687
Closing net assets of the scheme at 31 March 3,202,442 2,885,463
Fund Account
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Net Asset Statement as at 31 March
Notes 2011 2010 £000’s £000’s £000’s £000’s
Investments at Market Value 10
Equities - UK 556,260 527,343 - Overseas 506,392 1,062,652 659,241 1,186,584
Index-Linked Securities - Public 34,731 30,540
Pooled Investment Vehicles - Managed Funds 194,738 181,859 - Unit Trusts 1,240,742 911,404 - Insurance Contracts 245,010 194,148 - Other 26,296 8,004
1,706,786 1,295,415Property 13 280,570 232,511Derivatives 0 151Cash Deposits 60,943 63,706Other Investments 5,057 5,715
3,150,739 2,814,622
Investment Liabilities 11 0 (3,703)
3,150,739 2,810,919
Current Assets 11 60,261 80,926
Current Liabilities 11 (8,558) (6,382)
Net Assets 3,202,442 2,885,463
During 2010-11 the Alliance Bernstein mandate was terminated and all derivatives were closed out. The fund no longer holds any derivatives.
The accounts summarise the transactions of the Pension Fund and deal with the net assets available. They do not take account of obligations to pay pensions and benefits which fall due after the end of the Pension Fund year. The actuarial position of the Pension Fund, which does take account of such obligations is dealt with in the Actuary’s Report included in the Annual Report and these accounts should be read in conjunction with that report. The full actuarial valuation is available on www.kent.gov.uk
Net Asset Statement
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Notes to the Accounts
1) Actuarial Valuation as at 31 March 2010
As required by Regulation 36 of The Local Government Pension Scheme (Administration) Regulations 2008 (“the Regulations”) as amended, an actuarial valuation of the Fund was carried out as at 31 March 2010.
The market value of the Fund’s assets at the valuation date was £2,780m and the liabilities were £3,623m. The assets therefore, represent 77% (2007 73%) of the Fund’s accrued liabilities, allowing for future pay increases. The main actuarial assumptions used were as follows –
Valuation of assets:- Assets have been valued at a 6 month smoothed market value
Rate of return on investments: 6.6% p.a.
Rate of general pay increases: 5.0% p.a.
Rate of increases to pensions in payment (in excess of guaranteed minimum pension): 3.0% p.a.
The actuarial valuation has been undertaken on:
• the projected unit valuation method where there is an expectation that new employees will be allowed to join an employer; or
• the attained age valuation method for employers who were closed to new entrants.
These methods assess the costs of benefits accruing to existing members during:
• the year following valuation; or
• the remaining working lifetime, respectively allowing for future salary increases. The resulting contribution rate is adjusted to allow for any difference in the value of accrued liabilities and the market value of assets.
2) IAS 26 Disclosures as at 31 March 2011
IAS 26 requires the actuarial present value of promised retirement benefits to be disclosed and gives three options for disclosure:
Option A – in the Net Assets Statement, in which case it requires the statement to disclose the resulting surplus or deficit
Option B – in the notes to the accounts
Option C – by reference to this information in an accompanying actuarial report.
Option B has been chosen for the purposes of the Pension Fund accounts.
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Notes to the Accounts
The actuary has calculated that as at 31 March 2011 based on the actual Fund Value, the Pension Fund had a net liability of £1,321m as follows:
Net Pension Asset as at 31-Mar-11 31-Mar-10 31-Mar-09
£000’s £000’s £000’s
Present Value of Funded Obligation 4,523,250 5,137,091 3,593,235
Fair value of Scheme Assets (bid value) 3,202,442 2,885,463 2,075,686
Net Liability 1,320,808 2,251,628 1,517,549
Note, the Present Value of Funded Obligation consists of £3,761,840,000 in respect of Vested Obligation and £761,410,000 in respect of Non-Vested Obligation.
3) Taxation
The Fund is accepted by the Inland Revenue as a registered pension scheme in accordance with paragraph 1(1) of Schedule 36 to the Finance Act 2004 and, as such, qualifies for exemption from tax on investment income, underwriting commission and gains on selling transactions. By virtue of Kent County Council being the administering authority, VAT input tax is recoverable on all Fund activities including investment and property expenses.
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Notes to the Accounts
4) Contributions Receivable 2010-11 2009-10 £000’s £000’s From Employers
Normal 110,877 110,379
Augmentation - (Early Retirement recoverable costs) 9,173 4,219
Deficit Funding 60,772 60,933
180,822 175,531
Analysis of Employers’ Contributions
Kent County Council 80,525 80,214
Scheduled Bodies 89,668 85,125
Admitted Bodies 10,629 10,192
180,822 175,531
2010-11 2009-10
£000’s £000’s
From Members
Kent County Council 21,473 21,758
Scheduled Bodies 24,362 24,215
Admitted Bodies 2,729 2,839
Lump Sum Contributions 302 37
48,866 48,849
Note:
As at 31 March the comparative numbers of contributing members were:
2011 2010
Kent County Council 21,956 22,945
Scheduled Bodies 19,540 19,628
Admitted Bodies 1,912 1,936
43,408 44,509
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Notes to the Accounts
5) Transfers In 2010-11 2009-10 £000’s £000’s
Individual 13,929 14,876
6) Benefits Payable KCC Scheduled Admitted Bodies Bodies 2010-11 2009-10 £000’s £000’s £000’s £000’s £000’s
Pensions
Retirement pensions 39,840 41,478 4,194 85,512 80,231
Widows pensions 2,343 2,996 253 5,592 5,348
Children’s allowances 75 135 8 218 219
Pensions increase 18,159 20,048 1,169 39,376 42,582
Less benefits recovered directly from employing authorities (4,356) (122) (4,478) (4,577)
60,417 60,301 5,502 126,220 123,803
Lump Sums
Retirement Lump Sums 15,970 19,181 2,228 37,379 30,369
Death Benefits 1,505 1,908 11 3,424 2,984
17,475 21,089 2,239 40,803 33,353
The amount stated as pensions increase represents the year on year cumulative increase on the nominal retirement pension received at the start date of retirement.
7) Transfers Out 2010-11 2009-10 £000’s £000’s
Individual 10,595 18,678
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Notes to the Accounts
8) Expenses borne by the Scheme
2010-11 2009-10
£000’s £000’s
Administrative and other expenses
Internal Administration 2,423 2,511
Actuarial Fees 205 199
Audit Fee 50 50
Legal & Other Professional Fees 108 221
Other miscellaneous expenses 82 37
2,868 3,018
Investment Management Expenses
Investment Managers 4,707 4,627
Property Advisors 635 489
5,342 5,116
Other Investment Management Expenses
Miscellaneous property expenses 533 356
Insurance recoverable received 68 (127)
Disbursements paid 570 683
Property Income (328) (495)
Custody Fees 177 193
1,020 610
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Notes to the Accounts
9) Summary of Income from Investments
Notes 2010-11 2009-10 £000’s % £000’s %
Fixed Interest - UK Public 1,990 3.05 - UK Quoted 3,449 5.29 - Overseas 757 1.16
Index-Linked - UK 253 0.45 315 0.48
Equities - UK 15,549 27.48 15,522 23.82 - Overseas 12,594 22.26 11,882 18.24
Pooled Investment Vehicles
Managed Funds - UK 0 0.00 180 0.28 - Overseas 4,598 8.13 3,764 5.78
Unit Trusts - UK Public/Fixed Interest 7,213 12.75 10,664 16.37 - Overseas Public/Fixed Interest - UK 2,782 4.27 - Overseas
Insurance Contracts - UK
Other - UK 97 0.17 45 0.07 - Overseas 382 0.68
Property - Freehold 13 10,379 18.35 10,935 16.78 - UK Pooled Vehicles 4,347 7.68 1,052 1.61 - Overseas Pooled Vehicles 285 0.50 23 0.04
Total Income From Investments 55,697 98.46 63,360 97.25
Currency Deposits - Currency Deposit Accounts 29 0.05 2 0.00 - Sterling Cash Balances 509 0.90 1,310 2.01 Sub-Underwriting Commission/Other 79 0.14 447 0.69 Stock Lending 252 0.45 32 0.05
Total 56,566 100.00 65,151 100.00
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Notes to the Accounts
10) Analysis of Change in Market Value of Investments
Market Purchases Sales Change in Market Value as at at Cost Proceeds Market Value as at 31.03.10 Value 31.03.11 £000’s £000’s £000’s £000’s £000’s
Equities - UK quoted 527,343 79,454 (101,377) 50,840 556,260 - Overseas quoted 659,241 206,810 (382,442) 22,783 506,392
Index Linked - UK Public 30,540 8,100 (4,594) 685 34,731
Pooled Investment Vehicles Managed Funds - UK 2,033 0 0 1,215 3,248 - Overseas 179,826 5,286 (5,286) 11,664 191,490Unit Trusts - UK Public/Fixed Interest 307,039 11,544 6,544 325,127 - Overseas Public/Fixed 67,320 0 0 3,967 71,287Interest - UK 343,795 (2) (699) 31,673 374,767 - Overseas 193,250 437,360 (205,446) 44,397 469,561
Insurance Contracts - UK 194,148 30,559 0 20,303 245,010Other - UK 8,004 162 0 2,055 10,221 - Overseas 0 16,387 0 (312) 16,075
Property - Freehold 168,177 15,709 7,068 190,954 - UK Pooled Vehicles 46,802 22,814 2,259 71,875 - Overseas Pooled Vehicles 17,532 85 124 17,741Derivatives - UK Equity future contracts (11) 11 0 - Overseas Equity future contracts 162 789 (951) 0
Total 2,745,201 835,057 (700,784) 205,265 3,084,739
Cash Deposits 63,706 (1,427) 60,943Other Investments - Debtors - Outstanding Sales 2,213 656 - Creditor - Outstanding Purchases (3,682) 0 Purchases - Profit/(Loss) on Forward Currency (21) 0 - Investment Income Accruals 3,502 4,401
Total 2,810,919 203,838 3,150,739
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Notes to the Accounts
The change in market value of investments during the year comprises all increases and decreases in the market value of investments held at any time during the year, including profits and losses realised on sales of investments during the year.
Transaction costs are included in the cost of purchases and sales proceeds. Transaction costs include costs charged directly to the Pension Fund such as fees, commissions, stamp duty and other fees. Transaction costs incurred during the year amounted to £884,068 (2009-10 £1,247,197). In addition to the transaction costs disclosed above, indirect costs are incurred through the bid-offer spread on investments within pooled investment vehicles. The amount of indirect costs is not separately provided to the Pension Fund.
The following reflects the monetary and percentage split of the investments of the Fund at 31 March and previous year comparisons.
2011 2010 £000’s % £000’s %
Alliance Bernstein 0 0.0 253,065 9.0
Baillie Gifford 574,355 18.3 512,705 18.3
DTZ 280,887 8.9 233,090 8.3
GMO 191,489 6.1 179,826 6.4
Goldman Sachs 244,713 7.8 226,217 8.1
HarbourVest 1,147 0.0 0 0.0
Henderson 8,130 0.3 6,432 0.2
Impax 26,877 0.9 0 0.0
Invesco 355,861 11.3 326,931 11.6
JP Morgan 23,984 0.8 23,119 0.8
Partners Group 14,928 0.5 0 0.0
Schroders 883,517 28.1 794,675 28.3
State Street Global Advisors 537,701 17.1 251,276 8.9
YFM 2,091 0.1 1,572 0.1
3,145,680 100.0 2,808,908 100.0
The investment manager totals exclude investment debtors and creditors.
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Notes to the Accounts
11) Current Assets & Liabilities
2011 2010 £000’s £000’s £000’s £000’s
Investment Liabilities Outstanding Purchases 0 (3,682) Loss on forward currency 0 (21)
0 (3,703)
Current Assets Contributions from: - Scheduled Bodies 30,200 23,424 - Admitted Bodies 1,464 31,664 850 24,274 Other current assets 863 1,327 Cash Deposits 27,734 55,325
60,261 80,926
Current Liabilities Unpaid Benefits (4,386) (4,369) Other current liabilities (4,172) (2,013)
(8,558) (6,382)
12) Loss on Icelandic Investment
At 31 March 2011 the Pension Fund is carrying a provision of £229,861 unchanged from 2010, in respect of cash investments in the Icelandic banks which collapsed in 2008, based on the assumption that KCC has priority creditor status. This is included in other current liabilities per note 11.
13) Property
Valuation of Investment Properties
The pension fund directly owns 26 investment properties, all of which are independently valued by Colliers CRE, an external firm of professional valuers. They valued the properties at fair value in accordance with the principles laid down by the Royal Institute of Chartered Surveyors as at 31 December 2010. The results of the valuation have then been indexed in line with the Investment Property Databank Monthly Index movement to 31 March 2011.
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Notes to the Accounts
Property Income and Expenditure
2010-11 2009-10 £000’s £000’s
Rental Income from Investment Properties 10,379 10,935
Direct Operating Expenses on investment properties (843) (434) generating rental income
9,536 10,501
14) Additional Voluntary Contributions
Scheme members have the option to make additional voluntary contributions to enhance their pension benefits. In accordance with regulation 4(2)(b) of the LGPS (Management and Investment of Funds) Regulations 2009, these AVC contributions are not included within the Pension Fund Accounts. These contributions are invested separately from the Pension Fund, with either Equitable Life Assurance Company, Prudential Assurance Company or Standard Life Assurance Company. The AVC provides secure additional benefits on a money purchase basis for those members electing to pay additional voluntary contributions.
Prudential Standard Life Equitable Life
2010-11 2009-10 2010-11 2009-10 2010-11 2009-10
£000’s £000’s £000’s £000’s £000’s £000’s
Value at 1 April 3,906 3,265 2,082 1,586 1,222 1,195
Income Contributions Received 1,198 760 183 160 10 11 Transfer Values Received 65 40 3 0 Interest & bonuses 46 30 0 58 139
Total 1,309 830 183 163 68 150
Expenditure Retirement Benefits Paid (762) (255) (357) (105) (143) (119) Transfer Values Paid (16) (33) (8) (11) (3) Refunds of Contributions (37) (16) 0 0
Total (815) (304) (357) (113) (154) (122)
Change in Market Value (10) 115 150 446 0 (1)
Value at 31 March 4,390 3,906 2,058 2,082 1,136 1,222
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15) Related Party Transactions 2010-11 2009-10 £000’s £000’s
Transactions between the KCC Pension Fund and Kent County Council
- Transactions between the KCC Pension Fund and Kent County Council, in respect of Pensions administration costs, investments monitoring, legal and other services. 2,531 2,647
- in respect of cash held by KCC owing to the Pension Fund 1,580 55,325
- In respect of interest received on cash deposits 89 1,259
There were no related party transactions with members or senior officers.
16) Investment Commitments
As at 31 March 2011 the Pension Fund had a future commitment to invest in the following Funds:
Fund Total Commitment Invested Outstanding
YFM Private Equity Fund £4m £3.2m £0.8m
Aurora European Property Fund £30.1m £30.84m £150k (€35m) (€34.83m) (€170k)
Partners Group £75m £14.7m £60.3m
HarbourVest £60m £1.6m £58.4m
Notes to the Accounts
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Notes to the Accounts
17) Stock Lending
In April 2010 the Pension Fund resumed the stock lending programme with the fund’s Custodian JP Morgan.
The amount of securities on loan at year end, analysed by asset class and a description of the collateral is set out in the table below.
Loan Type Market Value Collateral Value Collateral type £000’s £000’s
Equities 21,198 22,500 Securities
Sovereigns – Euro 4,566 4,782 Securities
Sovereigns – Sterling 3,982 4,081 Securities
29,746 31,363
18) Cash Balances
With effect from 1 July 2010 the Pension Fund cash which is not required on a day to day basis to pay benefits or administrative expenses of the Pension Fund has been invested separately from that of KCC. This surplus cash is invested in the RBS liquidity account and JP Morgan Sterling Liquidity MMF. The remaining cash is split between the Investment Fund Managers, who hold it in the JP Morgan Sterling Liquidity MMF until required.
19) Investment Performance
- The County Council uses The WM Company investment performance service which in conjunction with CIPFA and the Society of County Treasurers produces local authority statistics.
- The rates are expressed as rates of return and the statistical measure of performance enables valid comparisons to be made between individual funds and against the aggregate performance (median) of all local authority funds participating in the service.
- The property portfolio is subject to an independent review of performance by the Investment Property Databank.
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Notes to the Accounts
20) Financial Instruments
The investments disclosed in the Balance Sheet are made up of the following categories of financial instruments:
Current 31 Mar 2011 31 Mar 2010
£000’s £000’s
Creditors
- Investment Creditors 0 3,703
- Other Creditors 8,558 6,382
Total Financial Liabilities 8,558 10,085
Available-for-sale financial assets 2,893,785 2,576,873
Derivatives 0 151
Loans and receivables
- Investment debtors 5,057 5,715
- Other debtors 32,527 25,601
Cash and cash equivalents
- Held by Fund Managers 60,943 63,706
- Internally Managed 27,734 55,325
Total Financial Assets 3,020,046 2,727,371
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Risk Management
The activities of the Kent Pension Fund (the Fund) expose it to a variety of financial risks:
In respect of its investments the Fund is specifically exposed to the following risks:
- Market risk – the possibility that financial loss might arise as the result of changes in such measures as interest rates and stock market movements.
- Credit risk – the possibility that other parties might fail to pay amounts due
- Liquidity risk – the possibility that the Fund might not have funds available to pay benefits
The over-riding risk to the Fund is a loss on financial investments which ultimately could mean the Fund could not pay benefits but more realistically that employer contribution rates would have to increase at the actuarial valuation.
There are a number of ways in which the Fund seeks to minimise potential adverse effects on the resources available to fund benefits:
Market Risk
Diversified asset allocation - the Fund invests in a range of asset classes on a global basis to help guard against sharp falls in value of a particular asset class. The Fund has a high allocation to Equities at around 70% and this is typical of local authority funds. It does mean that returns are highly correlated with equity markets.
Credit Risk
Diversification in manager selection - in appointing managers the Committee is looking for types of manager which combine well. No manager can succeed in all market conditions and the Fund diversifies risk by appointing a number of managers with different investment styles for each asset class. In the last 12 months the Fund has terminated the contract of an active manager and transferred the funds into a passive equity manager. It has also made an investment in an environmental fund and made a commitment to invest in a Private Equity fund and Infrastructure fund of funds.
With advice from Hymans Robertson, the Fund’s investment consultants, the Fund appoints specialist managers to manage each asset class and then monitors investment performance. Each manager’s performance is reviewed regularly and continued under-performance by managers will lead to their dismissal .
Liquidity Risk
With the exception of its property holdings the Fund’s monies are invested in investments which may be converted to cash at short notice. In addition the fund holds a minimum of £15million in call accounts and Money Market Funds to ensure funds are available to pay benefits.
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Risk Management
Risk Controls
Failure of governance arrangements Committee meetings
Liaison with Chairman, Vice Chairman, spokesman
Advice from Legal & Democratic Services
Financial default by an employer Enforce Guarantee Bond arrangements
Review existing exposure
2010 Valuation Detailed timetable for process
Regular briefing for major employers
Review of actuarial service
Pension Fund Cash Management Segregated cash management policy
Quarterly monitoring reports
Investment advice Examine different options for investment advice
Investment under-performance & Investment Manager Complexity / Structure
Quarterly monitoring of managers
Update of Investment Strategy
Disaster recovery for pensions data Disaster recovery arrangements with Heywoods
Regular testing of arrangements
Recruitment & Retention of staff Ensure that both teams are properly resourced
Ongoing training & development of staff
Not meeting Pensions KPI’s Weekly reporting
Monthly reporting
Twice yearly reports to Committee
KCC data quality Close liaison with KCC Personnel & Development staff
Business Risk
Officers of Kent County Council formally review and update the Pensions Risk Register (Register). The Register was last reviewed in April 2011 and the Top 10 Risks for the Fund and the controls in place are set out below.
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List of Employing Bodies
Scheduled Bodies
Local Authority and District Councils
Ashford Borough Council
Canterbury City Council
Dartford Borough Council
Dover District Council
Gravesham Borough Council
Kent County Council
Maidstone Borough Council
Medway Council
Sevenoaks District Council
Shepway District Council
Swale Borough Council
Thanet District Council
Tonbridge & Malling Borough Council
Tunbridge Wells Borough Council
Schools
Allington Primary School
All Souls County Primary School
Angley School
Archbishops CE School
Astor College of Arts
Astor of Hever School
Aycliffe CEP
Aylesford School
Barton Court Grammar School
Barton Junior School
Bennett Memorial School
Birchington CEP School
Borden Grammar School
Borough Green Primary School
Bredgar School
Brockhill Park School
Brookfield Junior School
Charles Dickens High School
Chatham Grammar School for Girls
Chatham Grammar School for Boys
Chaucer Technology School
Crockenhill Primary
Cranbrook School
Dane Court Grammar School
Dartford Grammar School for Girls
Ditton Infant School
Ditton CE Junior School
Dover Grammar School for Boys
Dover Grammar School for Girls
Downsview Infants School
East Borough Primary School
Five Acre Wood School
Folkestone School for Girls
Gateway Community Primary School
Gravesend Grammar School for Boys
Gravesend Grammar School for Girls
Greatstone County Primary School
Halfway House County Primary School
Harcourt County Primary School
Hartsdown Technology College
Herne Bay Junior School
Hextable School
High Firs Primary School
Highsted Grammar School
Hillview School for Girls
Holy Family RC Primary
Holy Trinity County Primary School, Dartford
Holy Trinity County Primary School, Gravesend
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List of Employing Bodies
Further Education Colleges
Canterbury College
Hadlow College
Hilderstone College
K College
Mid Kent College
North West Kent College
Thanet College
Homewood School, Tenterden
Horton Kirby County Primary School
Howard School
Hundred of Hoo School
Hugh Christie School
John Wesley School
Judd School Tonbridge
King Ethelbert School
Malling School
Maplesden Noakes School, Maidstone
Mascalls School
Northfleet Technical College
Northfleet School for Girls
Oakwood Park Grammar School
Our Lady of Hartley RC Primary School
Parkway Primary
Pent Valley Secondary School
Queen Elizabeth Grammar School
Riverview Infants School
Riverview Junior School
Robert Napier School
Roseacre Junior School
Sandling CP
Shatter Locks Infants
Simon Langton Grammar School for Boys
Skinners School
Snodland County Primary School
St Anselm’s RC Comprehensive School
St Bartholomew County Primary School
St Botolphs County Primary School
St Edmund of Canterbury Comprehensive
St Francis County Primary School
St George’s School, Broadstairs
St George’s School, Gravesend
St Gregory’s Catholic Comprehensive
St Johns CEP School
St John RC Comprehensive
St Joseph RC Primary School
St Mary’s CEP
St Peter’s Aylesford
St Simon Stock School
Staplehurst School
Stella Maris RC Primary School
Sutton at Hone County Primary School
Thamesview School
The Norton Knatchbull
Thomas Aveling School
Tunbridge Wells Girls Grammar School
Valence Special School
West Minster CP Sheppey
White Cliffs Primary
Whitehill Primary School
Willesborough County Primary Junior School
Wilmington County Primary School
Wilmington Grammar School for Boys
Wilmington Grammar School for Girls
Wilmington Hall
Wrotham School
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List of Employing Bodies
Other Scheduled Bodies
Ash Parish Council
Birchington Parish Council
Borough Green Parish Council
Broadstairs and St Peter’s Town Council
Chesterfield Parish Council
Cranbrook Parish Council
Darenth Parish Council
Deal Town Council
Ditton Parish Council
Dover Town Council
Downswood Parish Council
Eastry Parish Council
Edenbridge Town Council
EK Arms Length Management Organisation
EK Services (Thanet)
Eynsford Parish Council
Eythorne Parish Council
Farningham Parish Council
Faversham Town Council
Folkestone Town Council
Great Mongeham Parish Council
Hartley Parish Council
Hawkhurst Parish Council
Hawkinge Parish Council
Herne and Broomfield Parish Council
Horton Kirby and South Darenth Parish Council
Hythe Town Council
Kent and Essex Sea Fisheries Committee
Kent and Medway Fire and Rescue Authority
Kent Police Authority
Kent Probation
Kent Valuation Tribunal
Kings Hill Parish Council
Leigh Parish Council
Longfield and New Barn Parish Council
Lower Medway Internal Drainage Board
Margate Charter Trustees
Minster on Sea Parish Council
Otford Parish Council
Otham Parish Council
Pembury Parish Council
Ramsgate Town Council
River Stour Internal Drainage Board
Romney Marsh Levels Internal Drainage Board
Sandwich Town Council
Seal Parish Council
Sevenoaks Town Council
Snodland Town Council
Southborough Town Council
Staplehurst Parish Council
Stone Parish Council
Sturry Parish Council
Swanley Town Council
Swanscombe and Greenhithe Town Council
Tenterden Town Council
Thanet Joint Computer Committee
Upper Medway Internal Drainage Board
Westerham Parish Council
West Kingsdown Parish Council
Woodnesborough Parish Council
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List of Employing Bodies
Academies
Amherst School Academy
Bishop of Rochester Academy
Brompton Academy
Canterbury Academy
Castle Community College Academy
Chatham House Grammar School Academy
Clarendon House Grammar School Academy
Cornwallis Academy
Dartford Grammar School For Boys Academy
Dover Christchurch Academy
Duke of York Military Academy
Folkestone Academy
Fort Pitt Grammar School Academy Trust
Fulston Manor School Academy
Hayesbrook High School for Boys Academy
Herne Bay High School Academy
Highstead Grammar School Academy
Highworth Grammar School Academy
Isle of Sheppey Academy
John Wallis Academy
Kemnal Academy Trust: Orchards Academy
Kemnal Academy Trust: Rainham School for Girls
Knole Academy
Leigh Technology Academy
Longfield Academy
Marlowe Academy
Marsh Academy
Meopham Community Academy
New Line Learning Academy
Rainham Mark Grammar School Academy
Rochester Grammar School For Girls Academy
Sandwich High School Academy
Sir Roger Manwood School Academy
Skinners Academy
Spires Academy
Strood Academy
St Stephens Junior School Academy
Tonbridge Grammar School For Girls Academy
Weald of Kent Grammar School Academy
Westlands Primary School Academy
Westlands School Academy
Wilmington Academy
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List of Employing Bodies
Admitted Bodies
Community Admission Bodies
Active Life Limited
Ashford’s Future Company Ltd
Ashford Leisure Trust Limited
The Avenues Trust
Caldecott Community
Canterbury and Rochester Diocesan Council
Canterbury Archaeological Trust
Christchurch College, Canterbury
Connexions Partnership Kent & Medway
Folkestone and Dover Water Company
Gravesham Community Leisure
Hope (Kent) Limited
Hyde Housing Association
Invicta Telecare Limited
Kent College, Canterbury
Kent College, Pembury
Kent Community Housing Trust
Kent Music School
Knotley Hall School
Maidstone Housing Trust
Medway Community Living Services
Medway Housing Society
Mote House, Maidstone
Museum of Kent Life Trust
Orbit South Housing Association
Remade South East
Rochester Bridge Trust
Russet Homes
Sevenoaks Leisure Limited
Sevenoaks School
St Vincent’s School, Tankerton
Swale Housing Association
Thanet Archaeological Trust
Thanet Leisure Force
Tourism South East
Town & Country Group
University Of Kent
West Kent Housing Association
West Kent Water Company
Transferee Admission Bodies
ABM Catering Limited
APCOA Parking Limited
Avenues Trust Community Support Service
Brenwards Limited
Compass Group UK & Ireland
Fusion Lifestyle
Mitie PFI Limited
Mitie Cleaning & Support Services
Northgate Managed Services
Norwest Holst
Orchard Theatre Dartford Limited
Quadron Services Limited
Reliance Task Management
Shaw Healthcare (FM Services) Ltd
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The Fund Profile –5 Year Summary
Financial 2006-07 2007-08 2008-09 2009-10 2010-11 £000’s £000’s £000’s £000’s £000’s
Contributions 189,989 200,932 218,955 224,380 229,688
Investment and other income 82,107 81,224 81,807 80,901 70,495
Sub Total 272,096 282,156 300,762 305,281 300,183
Benefits and other payments (142,862) (153,485) (164,558) (184,966) (187,042)
Total 129,234 128,671 136,204 120,315 113,141
31 March 31 March 31 March 31 March 31 March 2007 2008 2009 2010 2011 £000’s £000’s £000’s £000’s £000’s
Net Assets 2,573,640 2,489,098 2,075,687 2,885,463 3,202,442
Investments at Valuation 2,457,117 2,334,413 1,895,169 2,745,201 3,084,739
Membership 31 March 31 March 31 March 31 March 31 March 2007 2008 2009 2010 2011
Contributors 40,586 42,513 43,385 44,509 43,408
Pensioners 25,737 26,658 27,898 29,107 30,549
Deferred Pensioners 24,746 26,569 26,607 30,691 32,618
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46 Kent County Council Superannuation Fund
Appendix 1: Major UK & Overseas Equity & Unit Trust Holdings by Value
As At 31 March 2011
£000’s
United Kingdom
Invesco Perpetual Income Fund 355,861
MPF UK Equity Index Sub-Fund 245,009
BG Group 32,764
Vodaphone Group 30,615
Royal Dutch Shell 27,463
Anglo American Plc 26,960
Rio Tinto 24,256
Unilever Plc 22,281
HSBC Holdings 19,728
AstraZeneca 19,719
BP Amoco 19,563
Legal & General 15,463
Prudential 13,553
Standard Chartered 12,033
Lloyds TSB Group Plc 11,738
Carnival Plc 11,425
Schroder Recovery Fund Income 11,392
Centrica 10,853
Carillion 10,644
Spirax-Sarco 10,636
£000’s
North America
Oracle 13,604
Altria Group Inc 13,455
Stericycle 12,217
Apache 11,688
Apple 9,200
Progressive Cp 8,786
Praxair 7,305
O’Reilly Automotive 7,269
Pepsico Inc 7,232
EOG Resources 7,141
Japan
Baillie Gifford Japanese Smaller Cos Fund 4,962
Mitsui & Co Ltd 4,093
Canon Inc 3,564
Japan Tobacco 3,438
Inpex Holdings 3,092
SMC Corporation 2,947
Olympus 2,729
Fast Retailing 2,194
Komatsu 2,173
Mitsui Sumitomo Insurance 1,779
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46 Kent County Council Superannuation Fund Kent County Council Superannuation Fund 47
Appendix 1: Major UK & Overseas Equity & Unit Trust Holdings by Value
£000’s
Europe
Nestle 13,284
Svenskahandelsbank 12,276
Groupe Bruxelles 11,667
Investor “B” 11,363
Total 9,507
Roche Holdings 8,052
Atlas Copco 7,748
Heineken 6,378
Celesio 5,364
Essilor 5,361
Pacific/Other
MPF International Equity 292,691
GMO Developed World Equity Investment Fund 185,559
Schroder GAV Unit Trust 149,993
Goldman Sachs Sterling Credit Fund 134,556
Goldman Sachs Global Corporate Fund 71,288
Impax Environmental Fund 26,877
OGX Petroleo On 9,872
Partners Group 9,499
Itau Unibanco 7,142
TKI Garanti Bksi 6,862
Vale Sa 6,494
Samsung Electronics 6,254
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48 Kent County Council Superannuation Fund
as at 31 March 2011
Location Market Value £
Type of Property
Unit 1/13 Boyatt Wood Industrial Estate, Parham Drive, Eastleigh 3,150,456 Industrial
Otterspool Way, Watford 2,650,384 IndustrialUnits 1/10 Stuart Close, Penarth Road, Cardiff 4,055,252 IndustrialUnits 6/13 Hawksworth Trading Estate, Bridgewater Close, Swindon
4,005,187 Industrial
Capital Interchange, Brentford 7,501,087 IndustrialKings Park Units 100 and 200, Trafford Park, Manchester 6,711,692 IndustrialKings Park Units 300 and 400 , Trafford Park, Manchester 4,928,382 Industrial49/59 Battersea Park Road, London SW8 16,252,354 IndustrialHertsmere Industrial Estate, Borehamwood 12,251,775 Industrial42-50 Grey Street, Newcastle 4,784,241 OfficeThe Tramshed, Walcot Street, Bath 4,255,157 Office1 Castle Terrace, Edinburgh 5,657,145 Office14-15 Conduit Street, London W1 14,349,975 Office3-5 Charing Cross Road, London W1 19,164,179 Office22 St Ann’s Road, Harrow 958,209 Retail Store24 St Ann’s Road, Harrow 1,765,122 Retail Store17-19 Cornhill & 1 Tavern St, Ipswich 3,530,244 Retail Store21-23 Bridlesmith Gate, Nottingham 7,724,556 Retail StoreNational House, 34/36 St Ann's Street and 42/46 Cross Street, Manchester
7,450,459 Retail Store
Queens Drive, Nottingham 4,410,295 Retail/WarehouseBurton Road, Kendal, Cumbria 6,843,560 Retail/WarehouseBarker Road, Maidstone, Kent 5,829,700 Retail/Warehouse217a Bath Road, Slough 10,392,073 Retail/WarehouseWenvoe Retail Park, Culverhouse Cross, Cardiff 11,152,469 Retail/Warehouse102 - 114 Wardour Street London 10,590,731 Retail/Warehouse63 George Street, Edinburgh 10,590,117 Retail/OfficeHenderson UK Shopping Centre Fund 4,217,383 Property FundLegal & General Leisure Fund 7,130,547 Property FundING Central London Fund 746,886 Property FundUnite Student Accommodation Fund 8,320,467 Property FundFalcon Unit Trust 7,103,250 Property FundHercules Property Unit Trust 10,764,792 Property FundLothbury 7,577,305 Property FundQuercus 7,778,804 Property FundWest End of London Property Unit Trust 9,049,212 Property FundAirport Industrial Property Unit Trust 9,186,475 Property FundAurora European Property Fund 17,740,519 Property Fund
Total Market Value 280,570,441
Appendix 2: Property Valuation
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48 Kent County Council Superannuation Fund Kent County Council Superannuation Fund 49
Appendix 2: Property ValuationDuring the year the following transactions were carried out within the property portfolio:
Acquisitions Market Value £
Type of Property
63 George Street, Edinburgh 10,669,790 Retail/Office
Units 300 and 400 Kings Park, Trafford Park, Manchester 5,039,029 Industrial
DisposalsThere were no disposals during 2010-11
Kent County Council Pension Section
Fund benefits and contributions
Pat Luscombe (Pensions Manager)
2nd Floor
Brenchley House
Week Street
Maidstone
Kent
ME14 1RF
Tel: 0844 875 3488
Fax: 01622 694590
email: [email protected]
Web: www.kentpensionfund.co.uk
Kent County Council Corporate Finance
Fund accounting and investment
Nick Vickers (Head of Financial Services)
Sessions House
County Hall
Maidstone
Kent
ME14 1XQ
Tel: 01622 694603
Fax: 01622 673806
email: [email protected]
County Print & Design 2 01622 605368 22609/TRH