British Coal Staff Superannuation Scheme Annual General Meeting Overview
1
Annual General Meeting
Edinburgh
29 September 2022
BRITISH COAL STAFF
SUPERANNUATION SCHEME
Introduction
Dame Kate Barker
Chairman of the
Committee of Management
2
3
James
Grant
John
Owen
Bleddyn
Hancock
John
Sheldon
Pensioner
Representatives
Appointed Members
Kate Barker
Chairman of the Committee of Management
Alan Whalley
Chair of the Risk and Assurance Sub-committee
Jim Shearer
Chair of the Administration and Benefits Sub–committee
and the Discretions & Appeals Sub-committee
Alan Rubenstein
Chair of the Investment Sub-committee
4
AGM Programme
1.
Chairman’s Report
Kate Barker
2.
Funding Update & Investment Strategy
Alan Rubenstein
3.
Key Statistics
Karen Barton
4.
Written Question & Answers
Karen Barton
5.
Open Forum
Chaired by Kate Barker
6.
Chairman’s Summary
Kate Barker
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Duty of the Scheme Actuary:
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Assess the annual returns required over the future to meet the
payments due to members and to the Guarantor;
•
Report on the return requirements & confirm if these returns fall
within an agreed corridor.
•
2021 Actuarial Valuation Results:
•
Returns required from the Scheme’s assets to meet the future
payments to members and the Guarantor have fallen over the period
since the 2018 valuation. Required returns are now outside the
agreed corridor.
•
Triggered a consultation with the Guarantor - are there any changes
to the Scheme’s funding and investment strategy that might be
beneficial?
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Primary funding aim:
pay all future benefits to members as they fall due, without
requiring funding from the Guarantor
•
Valuation results show the Scheme is well funded relative to
this aim
•
However, still need a challenging level of return to achieve,
relative to ‘low risk’ assets
•
Increased market volatility in the first three months of 2022
(which has continued)
7
Increasing Regulation
Pension schemes face increasing regulatory burden.
E
nvironmental -
climate, pollution, scarce resources
S
ocial - health, education, human rights
G
overnance – responsible business, shareholder rights
Responsible investing increasing in priority – including more
regulation and reporting.
But focus in all these activities remains on achieving the best
financial outcomes for members.
8
Developments & Member Services
•
Custodian services transferred from JP Morgan to Northern
Trust on 1 April 2021
•
Proposed change in how RPI is calculated from 2030
•
Change expected to reduce pension increases only from 2030
•
Recent judicial review dismissed by High Court
•
Capita continue to perform well, especially in high priority
areas
•
Pension payments, retirements and handling death notifications
•
Working hard on maintaining a positive experience for members
•
Reappointed for 5 more years until 2027
•
Ongoing success of extra services offered to members
•
Tax help for Older People
•
Wealth at Work
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Alan Rubenstein
Chair of the
Investment Sub-committee
Future Scheme Payments & Cash-flows
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Investment Income
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Assets at 31 March 2022
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nvironmental –
“Green” investments
S
ocial – Russian invasion of Ukraine
G
overnance – active engagement with the companies we own
ESG considerations are important in all investment decisions
Our approach remains on achieving the best financial outcomes
for members.
TCFD
: Align with Framework – Scenario Analysis, Metrics
Our focus is on data
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Karen Barton
Scheme Secretary
Key Statistics for 2022
Total number of pensioner members
43,189
Total number of deferred members
1,623
Total benefits paid and transfers out
£573m
Net increase in the Fund during the year
£218m
Net assets of the Scheme at the year-end
£9,815m
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Fund Account
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£ million £ million
Pensions & lump sums
(573)
Administration Expenses
(4)
Total expenditure
(577)
Investment income
229
Investment management expenses
(19)
Increase in market value of investments
585
Net return on investments
795
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Net assets at 31 March 2021
9,597
Net assets at 31 March 2022
9,815
AGM Written Questions and Answers
Question - Mr Anthony McGarry
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Can the pensions be paid on a 28 day basis instead of end of month ?
This would give us a rise of 1 months extra pension per annum.
For example, if a pensioner is currently paid £1,000 a month, then under
this proposal he would receive £1,000 every 28 days which would mean
instead of receiving £12,000 a year he would receive £13,000 a year.
21
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Annual General Meeting
Edinburgh
29 September 2022
BRITISH COAL STAFF SUPERANNUATION SCHEME
OPEN FORUM
Thank you
•
Thank you for your questions and for attending today
•
Changes to the format of the 2023 AGM – making it
easier for members to engage!
22
22
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Annual General Meeting
Edinburgh
29 September 2022
BRITISH COAL STAFF
SUPERANNUATION SCHEME
The annual general meeting of the British Coal Staff Superannuation Scheme held in Edinburgh covered important updates on funding, investment, key statistics, and the 2021 actuarial valuation results. Discussions included the Scheme's primary funding aim, increased market volatility, and the challenges posed by increasing regulations in pension schemes regarding environmental, social, and governance factors.
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Presentation Transcript
BRITISH COAL STAFF SUPERANNUATION SCHEME Annual General Meeting Edinburgh 29 September 2022 1
Introduction Dame Kate Barker Chairman of the Committee of Management 2
James Grant Pensioner Representatives John Owen Bleddyn Hancock John Sheldon 3
Appointed Members Kate Barker Chairman of the Committee of Management Alan Whalley Chair of the Risk and Assurance Sub-committee Jim Shearer Chair of the Administration and Benefits Sub committee and the Discretions & Appeals Sub-committee Alan Rubenstein Chair of the Investment Sub-committee 4
AGM Programme 1. Chairman s Report Kate Barker 2. Funding Update & Investment Strategy Alan Rubenstein 3. Key Statistics Karen Barton 4. Written Question & Answers Karen Barton 5. Open Forum Chaired by Kate Barker 6. Chairman s Summary Kate Barker 5
2021 Actuarial Valuation Duty of the Scheme Actuary: Assess the annual returns required over the future to meet the payments due to members and to the Guarantor; Report on the return requirements & confirm if these returns fall within an agreed corridor. 2021 Actuarial Valuation Results: Returns required from the Scheme s assets to meet the future payments to members and the Guarantor have fallen over the period since the 2018 valuation. Required returns are now outside the agreed corridor. Triggered a consultation with the Guarantor - are there any changes to the Scheme s funding and investment strategy that might be beneficial? 6
Funding & Investment Overview Primary funding aim: pay all future benefits to members as they fall due, without requiring funding from the Guarantor Valuation results show the Scheme is well funded relative to this aim However, still need a challenging level of return to achieve, relative to lowrisk assets Increased market volatility in the first three months of 2022 (which has continued) 7
Increasing Regulation Pension schemes face increasing regulatory burden. Environmental - climate, pollution, scarce resources Social - health, education, human rights Governance responsible business, shareholder rights Responsible investing increasing in priority including more regulation and reporting. But focus in all these activities remains on achieving the best financial outcomes for members. 8
Developments & Member Services Custodian services transferred from JP Morgan to Northern Trust on 1 April 2021 Proposed change in how RPI is calculated from 2030 Change expected to reduce pension increases only from 2030 Recent judicial review dismissed by High Court Capita continue to perform well, especially in high priority areas Pension payments, retirements and handling death notifications Working hard on maintaining a positive experience for members Reappointed for 5 more years until 2027 Ongoing success of extra services offered to members Tax help for Older People Wealth at Work 9
Alan Rubenstein Chair of the Investment Sub-committee
Future Scheme Payments & Cash-flows Future Scheme Payments Future pension payments Adjusted Reserve payment (2033) Total 10.8 bn 2.5 bn 13.3 bn Assets & Cash-flows as at 31 March 2022 Asset value Investment Income Annual benefit payments Shortfall 9.8 bn 229 m 573 m 344 m 11
Investment Income 2022 m Dividends from equities Income from fixed income securities Property rents Income from pooled investment vehicles Income from shipping Interest on cash deposits & margin accounts Other Total 32 92 44 48 12 1 0 229 12
Assets at 31 March 2022 Actual m % Cash Government bonds and credit Private credit Public equity Private equity Property and infrastructure Global macro Shipping Other (new) opportunities Total 0.8 26.6 13.0 25.3 14.4 16.9 1.4 0.7 0.9 100.0 79 2,611 1,276 2,483 1,413 1,659 137 69 88 9,815 13
Annualised Returns and Performance Scheme Return % New Previous Benchmark Benchmark % % 1 Year 8.64 4.92 6.44 3 Years 8.07 7.07 8.20 5 Years 7.67 6.23 7.37 14
ESG & the TCFD Report Environmental Green investments Social Russian invasion of Ukraine Governance active engagement with the companies we own ESG considerations are important in all investment decisions Our approach remains on achieving the best financial outcomes for members. TCFD: Align with Framework Scenario Analysis, Metrics Our focus is on data 15
Karen Barton Scheme Secretary
Key Statistics for 2022 Total number of pensioner members Total number of deferred members 43,189 1,623 Total benefits paid and transfers out 573m Net increase in the Fund during the year 218m Net assets of the Scheme at the year-end 9,815m 17
Fund Account (577) million million (573) (4) Pensions & lump sums Administration Expenses Total expenditure Investment income Investment management expenses Increase in market value of investments 585 Net return on investments 229 (19) 795 Net increase in the value of the Fund 218 Net assets at 31 March 2021 9,597 Net assets at 31 March 2022 9,815 18
Question - Mr Anthony McGarry Can the pensions be paid on a 28 day basis instead of end of month ? This would give us a rise of 1 months extra pension per annum. For example, if a pensioner is currently paid 1,000 a month, then under this proposal he would receive 1,000 every 28 days which would mean instead of receiving 12,000 a year he would receive 13,000 a year. 20
BRITISH COAL STAFF SUPERANNUATION SCHEME OPEN FORUM Annual General Meeting Edinburgh 29 September 2022 21
Thank you Thank you for your questions and for attending today Changes to the format of the 2023 AGM making it easier for members to engage! 22
BRITISH COAL STAFF SUPERANNUATION SCHEME Annual General Meeting Edinburgh 29 September 2022 23
