Compliance and Reporting Committee’s Annual Report working group – Review of 2019 CIPFA ‘Preparing the Annual Report’ guidance

The Annual Report working group (established as part of the Compliance and Reporting Committee) has been reviewing the 2019 CIPFA ‘Preparing the Annual Report’ guidance and has identified several areas within the current guidance which now require updating and clarification. A priority has been to streamline the guidance and reduce duplication wherever possible with other reporting obligations – this was a message that was fully endorsed by DLUHC.

Another key area of improvement is how funds should report and categorise the allocation of assets. This area is covered in DLUHC’s recent consultation on LGPS investments, which proposes a requirement for ‘a single standard set of data on investments across annual reports and LGPS statistics’. The new guidance will suggest funds follow a ‘worked example’ template provided by the SAB which aims to improve consistency and better scheme-level reporting of asset allocation in the SAB annual report. Using standard data to report asset classes also aims to make the annual report process simpler for funds and more consistent for readers to directly compare data. The ‘worked example’ template for the categorisation of assets will shortly be shared by the SAB secretariat team which should be incorporated into reporting as soon as possible whilst the new guidance is being prepared.

From an administrative perspective, the Key Performance Indicators are being reviewed, with various fund officers and software providers invited to provide comment on the current guidance. The aim is to better define them and allow for standardised reporting so that funds can properly benchmark themselves against others. The new guidance aims to be in place ready for the 2023/24 reporting period but there are reporting changes which we hope can be implemented on a voluntary basis for 2022/23 annual reports to help with consistency in the asset allocation reporting area.