Agenda item

The Head of Pensions, Governance and Investments presented a report to present Members of the Teesside Pension Board with the 2023/24 draft unaudited accounts for the Teesside Pension Fund and to provide an update on the revised format required for the Pension Fund Annual Report.

It was noted that the overall financial performance of the Fund for the year to 31 March 2024 was very positive. The Fund’s value rose to £5.477 billion, an increase over the year of approximately £413 million, over 8%. This increase in value was mainly a result of equity market performance, which was positive for the year as a whole.

The Fund was two years into the current triennial valuation cycle. The Fund’s asset

value as at 31 March 2025 would be used by the Fund actuary when calculating the

three-yearly valuation of the Fund. The value of the Fund’s assets was currently increasing broadly in line with the actuary’s expectations at the last valuation.  Although welcome news, it was important to recognise the long-term nature of the

Fund and the volatility of many of its assets meant that the actuary would look beyond just the immediate value of the assets when carrying out the valuation. In addition, the size of the Fund’s liabilities (the cost of paying current and future benefits) was just as important when carrying out the valuation and setting employer contribution rates. Factors such as the actuary’s view of future inflation rates, future investment returns and life expectancy expectations would play a key part in the actuary’s valuation calculations.

Total membership of the Fund had increased, with total membership at the year-end now standing at 82,213 an increase of 1,875 over last year. The number of active

members had remined broadly similar, increasing by 22 or 0.08% over the year, and

increased by 11.9% over the past four years. The number of pensioners had increased by 898 or 3.3% over the year, and increased by 12.8% over the past four years. The number of deferred members has increased by 955 or 3.5% over the year, and increased by 20% over the past four years. Some of the increase in the number of deferred members in the four-year figure was because in the count of deferred members those individuals who have left employment but not yet had their benefits fully processed were now being recognised.

The Pension Fund Accounts presented were in draft form and, whilst the main

numbers and outcomes were not expected to change, changes might be needed as

further review took place. A draft would be presented to the Pension Fund Committee

later this month. In addition, the audit process was not complete and further changes might be required as a consequence of this.

The Pension Fund Annual Report was currently being prepared so as to comply as far as possible with the new guidance. A final draft would be presented to the 25 September Pension Fund Committee for approval and to the 25 November Board for noting before publication by 1 December 2024.

AGREED that the information provided was received and noted.