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Contents

The Trustees’ Report

The Assembly Members Pension Scheme (NI) 2000

Aim of this Report

How the Trustees of the Fund are Appointed

Trustees Names

Information about the Trustees

Trustee Meetings

Other Parties Appointed in Connection with the Fund as at 31 March 2005

Income of the Fund

Actuarial Valuation

Membership

Preparation and Audit of Annual Accounts

Summary of Financial Information

The Compliance Statement

Benefits

Tax Status of the Fund

Funding Standard

Investments

The Investment Report

Investment Manager

Basis of Remuneration

Investment Policy

Investment Performance Objectives and Expected Return

Performance Target

Distribution of Assets

Economic and Market Background

Policy Changes

Performance

Marketablity

Largest Holdings

Additional Voluntary Contributions (AVCs)

Annex A - Legislative Background

ANNEX B - FINANCIAL ANNUAL ACCOUNTS

THE TRUSTEES' REPORT

INTRODUCTION

The Assembly Members’ Pension Scheme (NI) 2000

The Assembly Members’ Pension Scheme (NI) 2000 (AMPS) provides benefits for Members of the NI Assembly through the basic scheme and for Ministers and Office Holders through the Supplementary Scheme. Both schemes are operated on an ‘opt out’ basis, meaning that all Members, Ministers and Office Holders are members of the scheme from the date they become MLAs unless they make a specific option not to be.

The main benefits of the scheme are:

The legislative background to the AMPS can be found at Annex A.

Aim of this Report

In order to conform to best practice in relation to reporting requirements the Trustees consider it appropriate to disclose actuarial and other accounting details to all members of the Fund, generally within seven months of the end of the accounting year (i.e. by 31 October each year).

The Trustees are pleased to present this report, which has been prepared in accordance with best practice and covers the period from 1 April 2004 to 31 March 2005. The purpose of the report is to describe how the Fund and its investments have been managed during the year.

How the Trustees of the Fund are Appointed

Part B, Section B2 of the Assembly Members’ Pension Scheme (NI) 2000 states that the Assembly shall by resolution appoint not more than five members of the Assembly to be the Trustees of this Scheme.

A person appointed as a Trustee –

a) may resign from office by notice in writing to the Presiding Officer;

b) may be removed from office by a resolution of the Assembly;

c) shall, without prejudice to sub-paragraph (b), cease to hold office on the expiry of six months from the date on which he ceases to be a member of the Assembly.

During suspension the Secretary of State shall be the sole Trustee of the Scheme and may appoint not more than 5 persons to be Trustees of the Scheme on his behalf. As The Northern Ireland Assembly is currently in suspension the Secretary of State has invited the 5 Trustees below to remain in their present role and all 5 Trustees have accepted.

Trustees Names

Information about the Trustees

The Northern Ireland Assembly Members’ Pension Fund shall be vested in and administered by the Trustees. The Trustees shall hold the assets comprised in the Fund upon trust in accordance with the provisions of the AMPS.

The procedure of the Trustees shall be such as the Trustees may determine.

The quorum for any meeting of the Trustees shall be three.

The Trustees may act by a majority of those present at any meeting.

The Trustees may employ such staff and obtain such professional advice and services
as they think necessary in connection with the performance of their functions under this Scheme.

The expenses of the Trustees in the exercise of their functions shall be defrayed out of the Fund.

Trustee Meetings

Six regular Trustee meetings were held during the period ending 31 March 2005.

Other Parties Appointed in Connection with the Fund as at 31 March 2005.

Actuary: The Government Actuary

Investment Manager: Baillie Gifford

Scheme Consultants: Price Waterhouse Coopers

Fund Insurance: Swiss Life

AVC: Clerical Medical

Scheme Auditor: NIAO

The Government Actuary is appointed on a statutory basis while the Trustees were responsible for the appointment of the Investment Manager, Scheme Consultants and AVC providers. The Scheme Auditor is appointed by Schedule 1 of the Schedule to the Assembly Members’ Determination 2000. The Government Actuary’s Department advised the Trustees that the Swiss Life premium was still competitive and recommended renewing the policy for a further 12-month period, taking into consideration the size of the AMPS fund and its current funding level.

All parties remain in place at the date of the report.

Any queries about pensions or any further information required regarding the day to day administration of the Scheme should be sent to the Secretariat at the following address:

Members Pensions Unit
Assembly Personnel Office
Annexe C
Dundonald House
Stormont Estate
Belfast
BT4 3SF

Tel: 028 9052 0954
Fax: 028 9052 0871

E-mail: evan.hobson@niassembly.gov.uk
alison.whitaker@niassembly.gov.uk
kathryn.mccartney@niassembly.gov.uk
neil.burns@niassembly.gov.uk

Income of the Fund

The income of the Fund is derived from four main sources:

i. Contributions – from Members and Holders of Qualifying Office

ii. Investments – see the Investment Report

iii. Transfers In – Members who have pension benefits in the scheme of a former employer or in a personal pension plan may be able to transfer in the benefits to the Scheme

iv. Consolidated Fund – a Consolidated Fund contribution, calculated in accordance with the recommendations contained in the Actuary’s report under article S2 (4b), shall be paid into the Fund out of money appropriated by Act of the Assembly for that purpose.

Actuarial Valuation

The Government Actuary is required to make a report on the general financial position of the Scheme as at each subsequent reporting date, not more than three years after the date last agreed or fixed, and to recommend to the Assembly the future rate of the Consolidated Fund contribution. The first valuation of the Scheme was conducted at the start of the 2002 –2003 financial year and was based on the standing of the Scheme as at 31 March 2002. The Government Actuary is also required to provide the Trustees with an indicative funding position annually on the 31 March between the dates of the formal actuarial valuation.

The Trustees have no authority to change this recommendation.

The second full valuation will be based on the standing of the Scheme as at 31 March 2005.

The Member’s and the employer’s contribution rates, for this reporting period, remain at the rate of 6% and 21.3% respectively.

Copies of the Actuarial Valuations are available on request from the Assembly Secretariat Pensions Section; Annexe C Dundonald House; Belfast; BT4 3SF.

Membership

The membership of the fund at 31 March 2005 was as follows:

Current members 99
Deferred members 25
Retired members 13
Transfers out 4
Widows 2
Widowers -
Children -

The benefits payable during the year amounted to £57,702, which included a lump sum on retirement payment of £8,087. There were no changes to the benefit regulations during the period. Pensions in payment were increased by 2.8%.

PREPARATION AND AUDIT OF ANNUAL ACCOUNTS

Summary of Financial Information

TOTAL FUND AT 1 APRIL 2004:

£5,288,880

  

What Went into The Fund

2004-2005

2003-2004

Consolidated Fund Contributions

£ 635,016

£ 502,314

Contributions from Members/Office Holders

£ 177,694

£ 140,792

Transfers in from other schemes

£ 901

£ NIL

Additional Voluntary Contributions

£ 14,691

£ 13,660

Investment Income

£ NIL

£ 18,481

Change in Market Value of Investments

£ 595,947

£ 877,405

TOTAL

£1,424,249

£ 1,552,652

What Went Out Of The Fund

   

Benefits Payable

£ 57,702

£ 92,496

Refunds of Contributions

£ NIL

£ NIL

Transfers out of the Scheme

£ 551,868

£ NIL

Administrative Expenses

£ NIL

£ NIL

Life Assurance

£ 30,219

£ 20,136

Consultancy

£ NIL

£ 10,169

Actuarial Expenses

£ 31,481

£ 26,038

Investment Management Expenses

£ 22,374

£ 18,621

Interest Payable

£ 1,805

£ NIL

Misc

£ 2,974

£ NIL

TOTAL

£ 698,423

£ 167,460

TOTAL FUND AT 31 MARCH 2005

£6,014,706

£5,288,880

The summary above is not the financial statements but a summary of information relating to both the Fund Account and the Net Assets Statement. The full Financial Annual Accounts are available at Annex B on page 13.

The Report for the period ended 31 March 2005 including the attached Investment Report and Compliance statement is approved on behalf of all the Trustees by:

Denis Watson
Chairman of Trustees

THE COMPLIANCE STATEMENT

Benefits

All pensions paid in the year were authorised under the appropriate Act and thus made in accordance with the regulations of the Fund. No alterations were made to regulations governing the payment of pensions during the year.

Tax Status of the Fund

The Northern Ireland Assembly Members’ Pension Fund is a statutory pension scheme within the meaning of Chapter 1 Part XIV of the Income and Corporation Taxes Act 1988 and is an ‘approved scheme’ for the purposes of accepting transfer values.

Funding Standard

The Northern Ireland Assembly Members’ Pension Scheme is not subject to the Minimum Funding Requirement of the Pensions Act 1995. Accordingly, it is not appropriate for the "MFR" actuarial statement, which is set out in regulations and used by schemes that are subject to MFR provisions, to be adopted for the Northern Ireland Scheme.

Nevertheless, the Trustees have asked the Government Actuary to provide periodical reassurances that this level of funding would be met.

Investments

All investments are in holdings that are permitted by the regulations of the Fund. Although the Trustees cannot direct the investment strategy of the Fund in which the Assembly Members’ Pension Scheme (NI) 2000 invests, nevertheless, it will consider Socially Responsible Investment policy issues when comparing two providers who are otherwise of equal preference.

THE INVESTMENT REPORT

Year Ending 31 March 2005

Investment Manager

On 15 March 2004 Royal London Asset Management’s (RLAM) 12-month extension to their contract was extended on a month-by-month basis. The Trustees completed a tender exercise during the year and appointed Baillie Gifford & Co to undertake the Fund Management responsibilities for the Northern Ireland Assembly Member’s Pension fund with effect from 1 November 2004. Baillie Gifford operates in accordance with guidelines and restrictions set out in the Life Policy Agreement and with instructions given by the Trustees from time to time. Their responsibilities include:

(i) carrying out all the day-to-day functions relating to the management of the Fund;

(ii) the allocations of the balanced portfolio between categories of investments and for the selection of individual stocks within each category of investment;

(iii) deciding whether it is appropriate to retain or realise individual investments within the portfolio;

(iv) exercising the investment powers in such a way that will give effect to the principles contained in the Statement of Investment Principles (SIP), so far as is reasonably practicable, and in particular will have regard to the suitability and diversification of the investments within the guidelines set by the Trustees.

Basis of Remuneration

Royal London Asset Management is paid an annual management fee of 0.40 % based on the value of the portfolio. The fee paid to RLAM for the period from 1 April 2004 to 31 October 2005 was £13,631.

Baillie Gifford is paid an annual management fee of 0.45% based on the value of the portfolio. The fee paid to BG for the period from 1 November 2004 to 31 March 2005 was £8,743.

Investment Policy

The Investment Policy of the Trustees of the Assembly Members’ Pension Fund is detailed in the Statement of Investment Principles, which was reviewed and updated by the Trustees during this reporting period. This is available on request from the Secretariat.

The size of the Scheme’s assets, remain insufficient to allow a widely diversified portfolio of investments were these assets to be invested directly in bonds, stocks and shares. Therefore, the fund continues to be invested in a single pooled fund run by an independent investment management company.

Investment Performance Objectives and Expected Return

The Trustees have agreed expected performance benchmarks within the SIP against which the performance of the Fund is assessed.

Performance Target

The Trustees have set a performance objective for the investment manager, which takes account of the liability profile of the Scheme and the level of risk that the Trustees believe appropriate. The present target of the Baillie Gifford Managed Pension Fund is to outperform the CAPS Median Balanced Pooled Fund over rolling 3-year periods.

The Scheme began investing with Baillie Gifford in November 2004 and therefore the following report reflects the period from that date to 31st March 2005. The economic and market background covers the twelve months to the end of March, in order to provide a slightly broader perspective

Distribution of Assets

The valuation and distribution of assets in the Baillie Gifford Managed Pension Fund at 31st March 2005 was as follows:

 

2005
%

UK Equities

52.0

Overseas Equities

 

North America

6.9

Europe

12.3

Japan

6.4

Pacific (ex Japan)

5.2

Emerging Markets

3.2
 

34.0

Fixed Interest

 

UK Bonds

4.0

Overseas Bonds

2.4
 

6.4

Cash & Deposits

7.6

TOTAL

100.0

Economic and market background

In sterling terms, equity markets continued to perform well over the period, with European and UK markets rising by 17% and 15% respectively, and the developed Asian and Emerging Markets posting gains of 19% and 14% respectively. In comparison, the weak dollar hurt US returns, up only 4%, and fading economic growth resulted in the Japanese market posting a loss of 3%.

Although markets performed well, investor sentiment was dampened at the start of the period by a number of worries, including high oil prices, slowing Chinese growth and rising interest rates, which it was feared would in turn lead to slower global economic growth. To a degree these fears have been confirmed by the recent moderation in economic activity in the major industrialised regions including the US, Europe and Japan, and also by government policy in China, which has been explicitly set to slow growth. However, a worst-case scenario has not materialised and this helped markets in the latter part of the period, particularly in Emerging Markets. Interest rates probably have further to rise in the US but it would appear that they will peak at low levels in both the UK and US as inflationary pressures are low. Corporate profits growth has also remained strong.

Oil stocks generally outperformed during the period, buoyed by the high oil price. Tobacco was another strong sector, whilst pharmaceutical stocks were hit by a stream of bad news on existing drugs. As interest rates rose, many financial stocks suffered, irrespective of their actual exposure to rate rises. Rising raw material costs and difficulties in putting up prices has meant that there were a number of profit warnings over the period, particularly in the consumer goods sector. It is encouraging, however, that very few of the holdings within the fund have suffered in this way.

Baillie Gifford are optimistic about the outlook for economic growth and equity markets, although gently rising interest rates and the high oil price provide a less favourable backdrop than has been the case over most of the last two years. Baillie Gifford expects corporate profits to grow, albeit at a slower pace than in 2004, and is also seeing renewed dividend growth, which is encouraging. China is likely to be a dominant influence on global economic growth for many years to come, and Baillie Gifford also believe the long term growth prospects and stock opportunities in the Asian and Emerging Markets remain attractive.

Baillie Gifford are positive on the prospects for the fund’s investments, which are mostly performing well at the operational level and producing strong rates of growth in their earnings and dividends. In general, high quality growth stocks are good value at present, and we expect their attractions to be reflected in higher share prices over time.

Policy Changes

Asset changes were modest. Baillie Gifford retained an overweight position in equities relative to bonds throughout the period. Within fixed interest, Baillie Gifford moved to an underweight position in corporate bonds, after strong performance led to a significant tightening of spreads. Within equities, Baillie Gifford increased exposure to Japan early in the year as company prospects improved on the back of economic recovery. However, the weighting was reduced towards the end of the year as growth fell to more muted levels. The exposure to UK equities was also trimmed during the period, allowing the cash position to rise. During the last quarter, there was a small increase in the weighting of US equities in order to fund a number of attractively priced growth opportunities.

Performance

The Managed Pension Fund provided a total return of 11.0% during the year ended 31st March 2005 compared with a median return for funds included in the CAPS Balanced Pooled Fund survey of 11.1%.

The annualised investment return over the last three years to 31st March 2005 of 1.9 % compares to a CAPS Balanced Pooled Fund survey median return of 2.3% per annum. The returns for the five years are -0.9% and -1.2 % respectively.

Marketability

Investments comprise units in a collective investment vehicle managed by Baillie Gifford, the holdings of which are regarded as being readily marketable.

Largest Holdings

As of 31st March 2005 the ten largest holdings, which accounted for 26.8% of the total value of the portfolio, were:

 

% of
Portfolio

Vodafone

3.7

GlaxoSmithKline

3.5

Royal Bank of Scotland

3.4

Barclays

3.2

BP

2.7

HSBC

2.3

Baillie Gifford British Smaller Cos

2.3

Wolseley

2.0

BHP Billiton

2.0

BG Group

1.7
 

26.8

Additional Voluntary Contributions (AVCs)

During the 2004 – 2005 financial year Clerical Medical continues to act as AVC provider for the scheme.

At the start of the reporting period 4 members took advantage of the facility to pay additional voluntary contributions. At the end of the reporting period 6 members took advantage of the facility to pay additional voluntary contributions.

One retired member is in receipt of AVC benefits.

LEGISLATIVE BACKGROUND TO THE AMPS (NI) 2000

ANNEX A

The Assembly Members’ Pension Scheme (NI) 2000 was set up on 13 May 2000 by Determination made by the Secretary of State under Section 48 of the Northern Ireland Act 1998 by virtue of paragraph 9 of the Schedule to the Northern Ireland Act 2000.

The Fund provides for pensions and gratuities to be payable to, or in respect of, persons who have ceased to be members of the Northern Ireland Assembly.

ANNEX B

Account, of the Assembly Members’ Pension Scheme (Northern Ireland) 2000, prepared pursuant to the Schedule to the Assembly Members’ Pensions Determination 2000, made under section 48 of the Northern Ireland Act 1998 by virtue of paragraph 9 of the Schedule to the Northern Ireland Act 2000 for the year ended 31 March 2005 together with the Report of the Comptroller and Auditor General thereon.

ASSEMBLY MEMBERS' PENSION SCHEME
(NORTHERN IRELAND) 2000

ACCOUNT FOR THE YEAR TO 31 MARCH 2005

Contents

Foreword

Statement of Trustees’ responsibilities

Statement on Internal Control

The Certificate and Report of the Comptroller and Auditor General

Fund Account

Net Assets Statement

Notes to the Financial Statements

Foreword

Background

1

The Assembly Members’ Pension Scheme (Northern Ireland) 2000 (AMPS(NI)2000) was set up from 13 May 2000 under the Assembly Members’ Pensions Determination 2000, made by the Secretary of State under section 48 of the Northern Ireland Act 1998 by virtue of paragraph 9 of the Schedule to the Northern Ireland Act 2000. The scheme provides benefits for Members and qualifying office-holders of the Northern Ireland Assembly.
 

2

Contributions are paid by Members, qualifying office-holders and the Northern Ireland Assembly into the Fund established under the Scheme, and the assets in the Fund are managed by an external Investment Manager. The Scheme is administered on a day to day basis on behalf of the Trustees by the Pensions Unit of the Personnel Office of the Northern Ireland Assembly’s Finance and Personnel Directorate.

Trustees

3

The Trustees are Members of the Northern Ireland Assembly appointed by Resolution of the Assembly in accordance with the Schedule to the Assembly Members’ Pensions Determination 2000.

During the current suspension of the Assembly the Secretary of State will act as sole Trustee of the Assembly Member’s Pension Scheme. However, during suspension he may appoint not more than 5 persons to be Trustees of the scheme on his behalf. The Secretary of State has invited the 5 Trustees below to remain in their present role and all 5 have accepted.
 

4

The Trustees were:

  • Denis Watson (Chairman);

  • Mervyn Carrick ;

  • John Dallat MLA;

  • John Kelly; and

  • David McClarty MLA.

 

Other parties appointed in connection with the Fund

5

The following professional parties are appointed in connection with the Fund:
   

Responsibiliy

Actuarial advice

Name

Government Actuary

Appointed by

Part S1(2) of the Schedule to the Assembly Members’ Determination 2000
   

External auditor of annual accounts

Comptroller and Auditor General

Schedule 1 of the Schedule to the Assembly Members’ Determination 2000
   

Investment Management

Royal London Asset Management Limited

Baillie Gifford – from 1 November 2004

Trustees

Trustees
   

AVC Provider

Clerical Medical

Trustees
   

Legal Advice

Senior Legal Assistant at the Northern Ireland Assembly

  
   

Scheme Consultant

PricewaterhouseCoopers

Trustees

Preparation of annual accounts

6

Paragraph 5 of Schedule 1 to the Schedule to the Assembly Members’ Determination 2000 requires that annual accounts are prepared in accordance with a direction given by the Comptroller and Auditor General. The accounts have been prepared, as far as appropriate, in accordance with the Statement of Recommended Practice (SORP) Financial Reports of Pension Schemes issued in July 1996 (revised November 2002), in order to conform to best practice reporting requirements. A statement of the Trustees’ responsibilities with regard to the preparation of the accounts is on page 19.

Benefits payable

7

The main provisions of the scheme are:

  • an immediate pension of one fiftieth of final salary for each year of service on retirement at age 65;

  • an immediate pension before retirement age subject to certain service restrictions;

  • an immediate pension on retirement at any time on the grounds of ill health;

  • an abated pension paid on retirement at any time on attainment of age 50 and completion of not less than 15 years service;

  • an actuarially reduced pension paid to most former Members at any time after age 50;

  • a five eighths widow/ers pension;

  • children’s pensions (at the rate of one quarter of the basic or prospective pension of the Member if there is one child or three eighths if there are two or more children OR if there is no surviving spouse at the rate of five-sixteenths of the basic or prospective pension of the Member for each eligible child not exceeding two);
   

  • a lump sum death gratuity on death in service equal to three years salary with provision for more than one nominee;

  • the purchase of added years;

  • transfer of pension rights (into and out of the scheme); and

  • the opportunity to contribute to an AVC scheme with an outside provider.
 

8

The numbers of beneficiaries from the Fund at 31 March 2005 were as follows:
   

Categories

Number of Awards

   

Retired members

13
   

Widow/ers

2
 

9

The benefits payable were £57,702. In addition, an amount of £551,868 was transferred out of the scheme into other pension funds. There were no changes to the benefit regulations during the period or increases to pensions in payment.

Income

10

Income to the Fund is derived from five main sources:

  • contributions from Members and qualifying office-holders under the Schedule to the Assembly Members’ Determination 2000;

  • an Exchequer contribution paid from the Northern Ireland Assembly’s income as detailed below;

  • interest from investment;

  • claims on life assurance policy; and

  • transfers of pension benefits into the Fund.
 

11

Members and office-holders contribute 6 per cent of their salaries. This rate has been in effect since the commencement of the Scheme. The Exchequer Contribution for the period to 31 March 2004 was 21.3 per cent (18% in the year ended 31 March 2003). (See para 17)

Investment details and performance

12

The Trustees have decided to produce a ‘Statement of Investment Principles’ in order to comply with best practice for Funded schemes.
 

13

The Statement covers such items as how investments are chosen, the balance between asset classes, the Trustees’ attitude to risk and the expected return and review procedures. It has been designed to cover the fundamental aspects of investment policy that are not expected to differ greatly from one year to the next and has been drawn up in consultation with the Government Actuary.
 

14

The Trustees delegated responsibility for the investment management of the fund entirely to Royal London Asset Management Limited (RLAM) on 30 March 2001. Prior to this date receipts were invested in the Northern Ireland Consolidated Fund.

RLAM’s contract expired on 15 March 2004, however they agreed for the contract to be extended on a month by month basis whilst the Trustees revisited the Statement of Investment Principles. The Trustees completed a tender for a new Investment Fund Manager and appointed Baillie Gifford with effect from 1 November 2004.
 

15

There was no investment income during the year. The income in 2003/04 of £18,481 related to rebates that were paid to the scheme in May 2004 from RLAM which related back to the financial year 2002.
 

16

The overall effect of the movements in pensions payable, income and investments was an increase of £725,826 in the Net Assets of the Fund during the period.

Actuarial
position of
the Fund

17

The Government Actuary’s last full report valued the fund as at 31 March 2002. The report concluded that in relation to past service the value of the assets falls short of the liabilities accrued prior to the valuation date by £1.02 million and recommended that the deficit be met by additional contributions from the Consolidated Fund of 2.2% of pay. In relation to future service the report concluded that the employer’s share of the Standard Contribution Rate of the Scheme should be 19.1%. Thus the total contribution from the Consolidated Fund from 1 April 2003 should be 21.3%. The Government Actuaries are now in the process of carrying out another full valuation. This is due to be completed in September 2005. A mini valuation was carried out on the draft financial statements for 2004/2005, this valuation concluded that the overall shortfall has increased to £1.2m. This is an increase of £340K on the prior year. A copy of this report is available from the Pensions Unit of the Personnel Office of the Northern Ireland Assembly’s Finance and Personnel Directorate.

 

Membership
statistics

     18    Details of the current membership of the Assembly Members’ Pension Scheme (Northern Ireland) 2000 are as follows:

 

   

Active members

   
   

Active members at 1 April 2004

  

98

   

Add: New entrants in the period

  

1

   

Less: Retirements in the period

  

-

   

Deferred awards

  

-

   

Deaths

  

-

   

Active members at 31 March 2005

 

99

   

Deferred Members

   
   

Deferred members at 1 April 2004

  

30

   

Add: New deferred members in the period

  

-

   

Less: Transfers out

  

(4)

   

Deferred awards coming into payment

  

(1)

   

Deaths

  

-

   

Deferred Members at 31 March 2005

 

25

   

Pensioners in payment

Members

Dependants

Total

   

Pensioners in payment at 1 April 2004

12

2

14

   

Members retiring in the period

1

-

1

   

Deaths in the period

-

-

-

   

New dependants

-

-

-

   

Pensioners in payment at 31 March 2005

13

2

15

Annual Report

19

In order to comply with best practice reporting requirements as set out in the SORP the Trustees have prepared an Annual Report, which incorporates, inter alia, a Trustees Report, Investment Report and statement of the compliance of the Fund with relevant laws and regulations. This provides fuller information on the Fund than is provided by this Foreword. See pages 3 to 12.

Contract address

20

Further information about the Assembly Members’ Pension Scheme (Northern Ireland) 2000 can be obtained from the Personnel Office, Pensions Unit, Annexe C Dundonald House, Belfast, BT4 3SF.

Approved on behalf of the Trustees on 20 September 2005 by:

Denis Watson
Chairman of the Trustees

Mervyn Carrick
Trustee

Statement of Trustees’ responsibilities

The Schedule to the Assembly Members' Determination 2000 requires the Trustees of the Assembly Members' Pension Scheme (Northern Ireland) 2000 to prepare annual accounts in such a form and in such manner as the Comptroller and Auditor General may direct.

The financial statements for the year ended 31 March 2005 were prepared on an accruals basis to give a true and fair view of the financial transactions of the Fund during the year then ended, and of the disposition at 31 March 2005 of its assets and liabilities, other than liabilities to pay benefits after the end of the Fund period.

In preparing those financial statements, the Trustees were required to:

The Trustees are responsible for the keeping of proper accounting records, for ensuring that proper financial procedures are followed and for ensuring that the accounting records are capable of producing statements which comply with the requirements of the Schedule to the Assembly Members' Determination 2000.

The Trustees are also responsible for the regularity and propriety of public finances provided by the Exchequer Contribution, for safeguarding the assets of the Fund and for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT ON INTERNAL CONTROL

Scope of Responsibility

We acknowledge our responsibility as Trustees for maintaining a sound system of internal control to safeguard the public funds and assets connected with the Assembly Member's Pension Scheme (NI) 2000 (AMPS (NI) 2000).

The AMPS (NI) 2000 is a statutory scheme and operates within a legislative framework. Officials from the Pensions Unit of the Personnel Office of the Northern Ireland Assembly's Finance and Personnel Directorate provide a full secretariat and administrative service to the Trustees.

The purpose of the system of internal control

The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness.

The system of internal control is based on an ongoing process designed to identify the principal risks to the achievement of the AMPS (NI) 2000 aims and objectives, to evaluate the nature and extent of those risks and to manage them efficiently, effectively and economically. It is based on a framework of regular management information, financial regulations, administrative procedures including segregation of duties, and a system of delegation and accountability. The system of internal control has been in place in AMPS (NI) 2000 for the year ended 31 March 2005 and up to the date of approval of the annual report and accounts.

Capacity to handle risk

The scheme's day-to-day administration and accounting responsibility is administered on behalf of the Trustees by the executive managers within the Pensions Unit of the Personnel Office of the Northern Ireland Assembly's Finance and Personnel Directorate who have responsibility for the development and maintenance of the control framework.

The risk and control Framework

Future corporate governance developments such as a risk assessment exercise leading to a risk register document is presently being put in place. In the meantime the following risks have been identified and measures have been put in place to minimise the risk:

Review of effectiveness

The Northern Ireland Assembly is subject to review by Internal Audit units, which operate to standards defined in the Government Internal Audit Manual. The work of the Internal Audit units is informed by an analysis of the risk to which the Northern Ireland Assembly is exposed and annual Internal Audit plans are based on this analysis.

Our review of the effectiveness of the system of internal control is informed by the work of the Internal Auditors and the senior managers within the Northern Ireland Assembly who have responsibility for the development and maintenance of the internal control framework, and comments made by the external auditors in their management letter and other reports.

An Internal Audit review of the Pension Scheme was carried out during the 2002/2003 financial year and no irregularities or improprieties were discovered. Internal Audit concluded that the system of internal control was operating effectively.

Approved on behalf of the Trustees on 20 September 2005 by:

Denis Watson
Chairman of the Trustees 		Mervyn Carrick
Trustee

ASSEMBLY MEMBERS' PENSION SCHEME (NORTHERN IRELAND) 2000

The Certificate and Report of the Comptroller and Auditor General to the House of Commons and the Northern Ireland Assembly

I certify that I have audited the financial statements on pages 24 to 29 under the Schedule to the Assembly Members’ Pensions Determination 2000 and directions made thereunder. These financial statements have been prepared in accordance with the accounting polices set out on page 26.

Respective responsibilities of the Trustees and Auditor

As described on page 19, the Trustees are responsible for the preparation of the financial statements in accordance with the Schedule to the Assembly Members’ Pensions Determination 2000 and directions made thereunder and for ensuring the regularity of transactions. The Trustees are also responsible for the preparation of the Foreword and contents of the Annual Report. My responsibilities, as independent auditor, are established by statute and I have regard to the standards and guidance issued by the Auditing Practices Board and the ethical guidance applicable to the auditing profession.

I report my opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Schedule to the Assembly Members’ Pensions Determination 2000 and directions made there- under, and whether in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. I report whether the contributions payable to the scheme have been paid in accordance with the Scheme rules and the recommendations of the actuary. I also report if, in my opinion, the Foreword is not consistent with the financial statements, if the Fund has not kept proper accounting records, or if I have not received all the information and explanations I require for my audit.

I read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. I consider the implications for my certificate if I become aware of any apparent misstatements or material inconsistencies with the financial statements.

I review whether the statement on page 20 and 21 reflects the Fund’s compliance with the Department of Finance and Personnel’s guidance on the Statement on Internal Control. I report if it does not meet the requirements specified by the Department of Finance and Personnel, or if the statement is misleading or inconsistent with other information I am aware of from my audit of the financial statements. I am not required to consider, nor have I considered whether the Trustee's Statement on Internal Control covers all risks and controls. I am also not required to form an opinion on the effectiveness of the Fund’s corporate governance procedures or its risk and control procedures.

Basis of audit opinion

I conducted my audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts, disclosures and regularity of financial transactions included in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Trustees in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Funds circumstances, consistently applied and adequately disclosed.

I planned and performed my audit so as to obtain all the information and explanations which I considered necessary in order to provide me with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by error, or by fraud or other irregularity and that, in all material respects, the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. In forming my opinion, I have also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion

In my opinion:

I have no observations to make on these financial statements.

JM Dowdall CB

Northern Ireland Audit Office

Comptroller and Auditor General

106 University Street

Date: 13 October 2005

Belfast

 

BT7 1EU

 

Fund Account for the year to 31 March 2005

     
       
 

Note

2004-05

2003-04

£

Contributions and Benefits

     

Contributions receivable

3

827,401

656,766

Individual transfers in from other schemes

  

901

-

   

828,302

656,766

Individual transfers paid to other schemes

5

 

(551,868)

 

-

Benefits payable

4

(57,702)

(92,496)

Other Payments

6

(34,998)

(20,136)

Administrative expenses

7

(31,481)

(36,207)

   

(676,049)

(148,839)

       

Net additions from dealings with members

  

152,253

507,927

Returns on Investments

     

Investment income

8

-

18,481

Change in market value of investments

9

595,947

877,405

Investment management expenses

11

(22,374)

(18,621)

Net returns on investments

 

573,573

877,265

Net Increase/(decrease) in the Fund
During the period

 

725,826

1,385,192

Net Assets of the Fund at 1 April 2004

 

5,288,880

3,903,688

At 31 March 2005

 

6,014,706

5,288,880

The notes on pages 26 to 29 form part of these accounts.

Net Assets Statement as at 31 March 2005
 

Note

2005

£

2004

£

Investments

     

Managed Fund

AVC Investment

9

9

5,829,229

95,324

5,090,159

73,230

Net current assets

12

90,153

125,491

Net Assets of the Fund as at 31 March 2005

 

6,014,706

5,288,880

The notes on pages 26 to 29 form part of these accounts

These financial statements were approved on behalf of the Trustees

On 20 September 2005 by:

Denis Watson Mervyn Carrick
Chairman of the Trustees Trustee

Notes to the Financial Statements

Basis of preparation

1

The accounts meet the accounting and disclosure requirements of the Statement of Recommended Practice (SORP) (revised November 2002) Financial Reports of Pension Schemes issued in July 1996, as far as appropriate.
   

The financial statements summarise the transactions of the Fund and deal with the net assets at the disposal of the Trustees. They do not take account of obligations to pay pensions and benefits which fall due after the end of the year. The actuarial position of the Fund, which does take account of such obligations, is dealt with in the Government Actuary’s valuation report on the position of the Fund as at 31 March 2002 and these financial statements should be read in conjunction with that report.

Accounting policies

2

The principal accounting policies are:
   

  • normal pension contributions are accounted for on an accruals basis;

  • pension benefits are accounted for on an accruals basis;

  • transfer values from and to other pension schemes represent the amounts received and paid during the year for members who either joined or left the Fund; and

  • all other expenditure is accounted for in the period to which it relates.

Contributions receivable

3

  

2004-05
£

2003-04
£

   

Exchequer contributions:

    
   

normal

635,016

502,314

   

Members’ contributions:

    
   

normal

177,694

140,792

   

Additional Voluntary contributions

(AVCs)

14,691

13,660

     

827,401

656,766

     
   

Exchequer contributions are paid out of money appropriated by Act of the Assembly.

Benefits payable

4

  

2004-05
£

2003-04
£

   

Pensions

49,280

23,726

   

AVC Benefits

119

4,191

   

Lump sum retirement benefits

8,303

64,579

     

57,702

92,496

Transfers to
Other Schemes

5

  

2004-05
£

2003-04
£

   

Individual transfers to other schemes

551,868

-

Other payments

6

  

2004-05
£

2003-04
£

   

Premium on life assurance policy

30,219

19,327

   

Interest Payable

1,805

-

   

Miscellaneous

2,974

809

     

34,998

20,136

Administrative expenses

7

  

2004-05
£

2003-04
£

   

Actuarial fees

31,481

26,038

   

Consultancy

-

10,169

     

31,481

36,207

   

The Pensions unit of the Northern Ireland Assembly provides administration support to the pension scheme and these costs are borne by the Northern Ireland Assembly.

    

Investment Income

8

  

2004-05
£

2003-04
£

   

Investment income earned on deposits

-

18,481

Investments

9

          
   

Value at 31 March 2004

£

Purchases
at cost

£

Sales

£

Change in
Market Value

£

Value at 31 March 2005

£

RLAM Managed Fund

  

5,090,159

247,599

5,646,887

309,129

0

BG Managed Fund

  

0

5,550,218

-

279,011

5,829,229

AVC Investments

  

73,230

70,033

55,746

7,807

95,324

   

5,163,389

5,867,850

5,702,633

595,947

5,924,553

The change in market value of investments during the year comprises all increases and decreases in the market value of investments held any time during the year, including profits and losses realised on sales of investments during the year.

Additional Voluntary Contributions (AVCs)

10

The Trustees are responsible for administering an AVC scheme whereby participants in the Assembly Members’ Pension Scheme may make contributions to secure additional benefits to those provided by the Pension Scheme. At 31 March 2005 these contributions were invested separately from the Pension Fund, in a variety of Investment Funds, with an outside provider Clerical Medical. These investments secure additional benefits on a money purchase basis for those members electing to pay AVCs. Members participating in this arrangement will receive an annual statement confirming the amounts held to their account and the movements in the year.

Investment Management Expenses

11

The management fee paid to Royal London Asset Management and Baillie Gifford was £13,631 and £8,743 respectively. The management fee is a percentage rate fee based on the value of the portfolio and is deducted on a monthly basis within the price of units held by the Members’ Pension Scheme.

Net Current
assets

12

Current assets

2004-05

£

2003-04

£

   

Contributions and benefits:

   
   

Contributions due

1,240

2,802

   

Balance at bank

16,344

2,807

   

Prepayments

23,190

13,655

   

Sundry Debtors

55,300

129,353

     

96,074

148,617

   

Current liabilities

   
   

Administrative expenses:

   
   

Actuarial fees

(5,921)

(9,925)

   

Life Assurance

-

(8,299)

   

Consultancy Fees

-

(3,180)

   

Other:

   

 

Pensions payable

-

(1,722)

     

(5,921)

(23,126)

   

Net current assets

90,153

125,491

Related party
transactions

13

None of the Trustees, key management staff or any other related party has undertaken any material transactions with the Fund during the year.