While practitioners have been busy preparing 2017-18 accounts and dealing with auditors, CIPFA has updated two publications with particular relevance to local government pension funds.
Preparing The Annual Report: Guidance For Local Government Pension Scheme Funds
Preparation and publication of annual reports by 31 December each year is a statutory requirement for local government pension funds under the provisions of:
- Regulation 57 of The Local Government Pension Scheme Regulations 2013 (England and Wales)
- Regulation 55 of The Local Government Pension Scheme (Scotland) Regulations 2018 (the Scotland Regulations).
Regulations also specify content to be included in such reports.
A great deal has changed since the last edition of this guidance was published in 2014. Regional asset pools, local pension boards and new legislation on investing, governance and benefits, not to mention changes to year-end reporting deadlines, have brought new challenges for practitioners.
This updated version offers worked examples of how reporting requirements can be achieved. It incorporates the recommendations of the Local Government Pension Scheme Advisory Board’s Code of Transparency and CIPFA’s May 2018 paper, Proposals for Post Pool Reporting, including:
- Full cost analysis of investment management expenses in a consistent format across different fund managers and asset types
- Regional asset pool set-up costs and expected savings
- Comparison of cost and return between pooled and non-pooled investments.
The annual report is not just a statutory requirement but a key communication channel between pension funds and stakeholders, who range from individual members and employing bodies to government departments, analysts and commentators.
Local Government Pension Scheme Fund Accounts 2018-19: Example Accounts And Disclosure Checklist
This revised edition reflects the reporting requirements of the Code of Practice on Local Authority Accounting in the United Kingdom 2018-19, published in April 2018. To assist practitioners, this publication includes disclosure and consistency checklists.
The main change is the adoption of IFRS 9, which introduces:
- New financial instrument classifications
- Expected loss allowances
- The option of additional disclosures for hedging instruments.
- Changes to debtor and creditor disclosure notes
- Separate analysis of any gains and losses arising from the de-recognition of assets held at amortised cost
- Creation of a long-term debtor to reflect reimbursement arrangements put in place for the 2016 lifetime tax allowance.
The 2018-19 example accounts also reflect the introduction of regional asset pools and recommendations in the CIPFA paper, Proposals for Post Pool Reporting, which require separate disclosure of regionally pooled investments.
Where regional asset pools have established companies limited by share capital, the value and classification of shares held by participating pension funds will need to be considered in terms of Fair Value accounting under chapter 2 of the code, and financial instrument accounting under chapter 7.
This publication includes a checklist of issues to be considered and a worked example of how one possible option might be presented in the year-end accounts.
Both publications should be available via the CIPFA website in January 2019, see www.cipfa.org/policy-and-guidance/publications
For further details, please contact Neil Sellstrom, CIPFA’s treasury management and pensions advisor, at [email protected]
