The Deputy Chief Executive and Finance Business Officer presented the draft Monmouthshire County Council Statement of Accounts 2022/23 and sought feedback and comments from the Committee. The Audit Wales Officer confirmed the accounts were received on 19th July 2023, past the deadline but in line of when officers had advised. It was reported that progress is delayed due to Audit Wales resource issues and the final accounts and ISA260 are unlikely to be ready by the November meeting. Progress will be reviewed at the next meeting.
· A Member, referred to the pensions liability (noting the main driver for the change in the total worth being a significant re-measurement of the net future pension liabilities of £202.6m) asked for more information. The Deputy Chief Executive explained that the pension fund deficit is similar to many other authorities. Triennial valuations of the fund by the Actuary are in progress combined with consideration of employers increasing employee and employer contributions to arrest the position. The results of the latest actuarial valuation presented a more positive position in terms of its assessment of liabilities due to a material change in the discount rate, inflation factors, how long people are living into retirement etc leading to a restructuring of pension scheme liabilities. It is a positive that there is a flattening of employer contributions going forward over the next few years as the Actuary is more comfortable that the pension fund is working towards a point of being fully funded.
The changes in the 2022/23 accounts are because of the valuation undertaken in March 2020 working its way through.
The Member suggested that the information provided could be expanded upon to provide reassurance to the reader. It was suggested that Officers consider this point outside the meeting.
A Member commented that it would be a “hard sell” to increase contribution rates when 0.5% change to a discount rate makes a £200m difference in the fund. The Deputy Chief Executive confirmed that the discount rate is determined by the Actuary based on evidence. It was agreed to provide a fuller explanation to put into context what the change in liabilities means for the Council.
The Chair referred to table 14.2, (pension stakeholders broken down between active, deferred and pensioners) and queried the average age being 52, and sought confirmation about the high average age of active members who are employees making contributions. Is there an issue with an older workforce who could retire in significant numbers in future. The Deputy Chief Executive confirmed that active members tend to be older age. The is a national drive of auto enrolment to encourage employees to make pension contributions through their careers rather than later on.
The Chair, on behalf of the Committee conveyed thanks to all the Officers involved in the completion of the Statement of Accounts , appreciating the amount of work involved.
As in the report recommendations, the Governance & Audit Committee:
1. Reviewed the 2022/23 draft Statement of Accounts and highlighted any queries and comments; and
2. Noted that following the completion of the external audit process, the audited Statement of accounts for 2022/23, alongside the outcome of the external audit process, will be presented to this Committee.