PLSA Annual Report and Accounts 2017

ANNUAL REPORT AND ACCOUNTS 2017 July 2018

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ANNUAL REPORT AND ACCOUNTS 2017

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PENSIONS AND LIFETIME SAVINGS ASSOCIATION

CONTENTS

A MESSAGE FROM OUR CHAIR CHIEF EXECUTIVE’S OVERVIEW THE PLSA AND ITS STRATEGY POLICY: MAKING A DIFFERENCE IN WHITEHALL, WESTMINSTER AND BRUSSELS MEMBERS: HELPING YOU RUN BETTER PENSION SCHEMES HOW WE WORK: DOING THE RIGHT THINGS IN THE RIGHT WAY FINANCES OUR GOVERNANCE DIRECTORS’ REPORT AND FINANCIAL STATEMENTS

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ANNUAL REPORT AND ACCOUNTS 2017

A MESSAGE FROM OUR CHAIR

THIS IS AN INDUSTRY THAT DOES GREAT THINGS. EVERY YEAR WE PAY BILLIONS OF POUNDS TO MILLIONS OF PEOPLE. WE’VE DELIVERED AUTOENROLMENT, WE’VE GOT MORE PEOPLE SAVING THAN EVER BEFORE, WE’VE ADAPTED TO A PROLONGED PERIOD OF LOW INTEREST RATES, WE’VE HAD THE BRAVERY TO FACE UP TO ONCEUNFORESEEN CHALLENGES IN DEFINED BENEFIT PENSIONS, WE’VE TAKEN HUGE STRIDES IN THE SPHERE OF RESPONSIBLE AND SUSTAINABLE INVESTMENT, WE’VE COMMITTED TO ADDRESSING DIVERSITY ISSUES IN OUR OWN ORGANISATIONS AND TRUSTEE BOARDS. WE DO THESE THINGS TO MAKE SURE WE HELP EVERYONE ACHIEVE A BETTER INCOME IN RETIREMENT.

Last year we took a fresh look at the infrastructure that supports our policymaking. With members’ support, we removed our old 1970s constitution to give us more flexibility to shape our governance around members’ needs and to respond to the policy environment. We consulted on proposals for a new Board structure and a new Policy Board, which you’ll see put in place during 2018.

In 2017 we were doing this in conditions that continued to be unusual, unpredictable and challenging. The unsteady political environment and election fall-out brought us a new pensions minister in Guy Opperman. It has been great to get to know him, and very helpful for him to listen to the voice of our members just as his predecessor did.

Also in 2017 we were pleased to appoint Julian Mund as Chief Executive following a period acting in the role. He’s made a strong start, refining our output and setting out a clear strategy for the future of the PLSA.

That voice is powerful thanks to the collective strength of our membership. By harnessing that strength, we have a real input into the policies that help everyone achieve a better income in retirement – policies aligned with modern life, like our work on Hitting the Target.

Our 2017 Annual Conference & Exhibition, Decoding the Future, focussed on innovation in all areas of pensions: embracing artificial intelligence, accommodating changes in the structure of our lives required by longevity, addressing the structural issues in the pensions system and engaging scheme members. It was a hugely successful event, and we carried its lessons into all of our work.

I want to match the changes in infrastructure with changes in culture and outlook across our 1,300-strong membership – how we interact with our members and what we gain from each other. I launched our #openPLSA campaign at the Conference, which aims to get more of our broad and diverse membership involved in policymaking through new channels. That way we can keep doing great things together.

I want to express my thanks to Julian and the PLSA team for another successful year, to my fellow Board members for their commitment – and in particular to Lesley Williams for her leadership of the Board over the two years to October 2017. And 2018 has so far been an exciting year for the PLSA and I look forward to reflecting on it in next year’s report.

Richard Butcher Chair

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PENSIONS AND LIFETIME SAVINGS ASSOCIATION

CHIEF EXECUTIVE’S OVERVIEW

THERE WERE TWO SIDES TO THE PENSIONS STORY IN 2017, AND THE PLSA WAS INVOLVED AT THE HEART OF BOTH – CHAMPIONING PROGRESS AND DEALING WITH PROBLEMS.

were involved in refreshing our approach around four perspectives: policy work that supports levels of saving, income and confidence; delivering for our members; a strong financial base; and being a happy and effective organisation.

By the end of the year there were more people actively saving for retirement than ever before, with more money invested on their behalf than ever before. We’re leading a clear shift towards thinking about how the bigger picture of life events and the financial choices that accompany them fits together.

Our work on Hitting the Target set out a bold set of ideas for the future of pensions and lifetime savings.

It addressed the interconnected issues we need to get to grips with to deliver sustainable pensions policy and retirement incomes in the next decade.

Financially, our policy of maintaining strong reserves and running a small operating surplus each year enabled additional investment in policy work and other activities. So while these accounts report an operating deficit of £339,000 in 2017 compared to the operating surplus of £208,000 achieved in 2016, our financial strength is undiminished. A 4% increase in contribution from income-generating activities last year is a positive signal for the future.

Meanwhile, we saw a number of high-profile corporate failures having an impact on DB schemes.

Our DB taskforce exposed the extent of risk in the DB system, why it’s there and how we could tackle it. It had a significant influence on the government’s Green Paper – and we’re continuing to work closely with the government in 2018. The taskforce also showed how our members can think about difficult issues close to home and provide a progressive voice.

We also did much more to help our members run great-value pension schemes. We published accessible, timely guidance on many of the things which risk getting in the way – MiFID II, GDPR – and published a range of Made Simple Guides to help open up new opportunities in investment, governance and communications. Our world-class conferences continued to attract record audiences to discuss topics on the cutting edge of pensions and investment thinking and to address the big economic and geopolitical issues affecting our work.

Over the summer and autumn we put a lot of our energy into reviewing the strategic journey we embarked upon when we became the PLSA in October 2015.

This small organisation of just 50 people delivers a huge amount for its members in policy, events and support for UK pension funds. To keep punching above our weight we need to maintain a sharp focus on what we do and how we do it. Staff at all levels

In October we said goodbye to Lesley Williams. She was an incredibly committed Chair and gave me and all of our team a lot of support during a transitional year; and she continues to be a great champion of our policy work and causes like our campaign to improve diversity in pensions. I want to thank her on behalf of our staff and members for everything she gave us. In her place we welcomed a new Chair in Richard – one of our longest-serving Board members – who brings a huge amount of energy and enthusiasm, especially to our policy work. I look forward to continuing to work with him on implementing our refreshed strategy in 2018.

The internal focus this year is on getting our internal wiring right – reshaping our teams and reviewing the services they deliver to members so we can support them as they deserve. In policy, Hitting the Target and our work on a sustainable future for DB continue to shape the future of our flourishing sector. And we have already put on two great conferences, on investment and for our Local Authority members, with an exciting Annual Conference & Exhibition taking shape. I hope to see you there.

Julian Mund Chief Executive

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ANNUAL REPORT AND ACCOUNTS 2017

THE PLSA AND ITS STRATEGY WE HELP EVERYONE ACHIEVE A BETTER INCOME IN RETIREMENT THE PENSIONS AND LIFETIME SAVINGS ASSOCIATION Our mission is to help everyone achieve a better income in retirement. We work to get more people and money into retirement savings, to get more value out of those savings and to build the confidence and understanding of savers.

We represent:

We also help members run better pension schemes: we are an important source for training, support and guidance on key retirement savings issues for the benefit of both pensions professionals and those who provide support services to the sector.

WHY WHAT WE DO IS IMPORTANT

} 1,000,000,000,000, (£1 trillion) in assets

Our members pay out billions of pounds to millions of people every year. The impact of our members’ funds and the retirement incomes they provide underpin the financial security of individuals and beyond that, the future development of the nation’s economy.

} Some 400 businesses which provide essential services and advice to UK pensions providers.

A CENTURY AT THE FOREFRONT OF RETIREMENT SAVINGS

} Over 1,300 pension schemes with 20 million savers. These include defined benefit, defined contribution, master trusts and local government funds.

WHAT WE DO We bring together the industry and other parties to raise standards, share best practice and support our members. We work collaboratively with members, government, parliament, regulators and other stakeholders to help build sustainable policies and regulation which deliver a better income in retirement.

WHAT DOES THAT MEAN IN PRACTICE? We ensure our members’ views, and those of their savers are heard by decision makers; we are the voice of our members with government, Parliament and regulators and we comment publicly on their behalf on key retirement income issues for savers.

Our industry-leading events, policy bodies and working groups facilitate direct exchange between members, government and regulators.

Things have changed radically since our beginnings in 1923 when The Association of Superannuation and Pension Funds was established to serve the interests of a population with a life expectancy of 55.6 for men and 55.9 for women. Today’s nurseryage children will live on average until they are 79.17 and 82.86 respectively.

We continually evolve; we changed our name from the National Association of Pension Funds (NAPF) to the PLSA, recognising that financial decisions for retirement are now about more than pensions (such as other savings and property) and we need joinedup policy on retirement income from government.

Although we’re a small organisation of about 50 people, we have a diverse range of activities across policy, research, press and government affairs, conferences and member relations.

OUR APPROACH We work constantly to be relevant to our stakeholders.

An efficiently-run and high-performing organisation, our employees share common values including being welcoming, helpful, optimistic and expert.

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PENSIONS AND LIFETIME SAVINGS ASSOCIATION

DELIVERING FOR MEMBERS: OUR STRATEGY 2017-2021

MAKING THAT POSSIBLE – KEY ENABLERS

We set ourselves objectives across four perspectives:

We have prioritised six major projects that will enable us to fulfil our objectives. We began these in late 2017 and they will carry through until late 2019.

POLICY } Work to get more people and money into retirement saving } Seek to get more value out of retirement savings } Build the confidence and understanding of savers

MEMBERSHIP } Help our members by giving them support and guidance } Engage with all of our members to understand their needs } Develop our membership to cover more savers and assets

INCREASE MEMBERSHIP ENGAGEMENT We want closer engagement with our members in line with their wishes and our operating requirements. We’ll increase the mutual value from closer engagement by developing and delivering a segmented strategy for member engagement.

IMPLEMENT NEW GOVERNANCE ARRANGEMENTS A new Policy Board will take strategic oversight of PLSA policymaking, so we’re responsive to change and our cross-cutting work is managed efficiently. A new PLSA Board structure will be more stable, give access to more skills and improve diversity of thought.

REVIEW PRODUCT OFFERINGS INTERNAL } Prioritise and focus on doing the right things and in the right way } Invest in retaining, developing and acquiring the right people and technology } Be a great place to work

FINANCIAL } Target incremental growth and develop our revenue streams

} Maintain an operating surplus, adequate

reserves, and a high proportion of stable income

} Seek strategic partnerships that add value to our business.

We want to make sure all of our products meet member needs, generate income to support other activities we undertake for members, or meet a member need or a policy objective that we’re happy to support from members’ subscriptions.

REVIEW SUBSCRIPTION MODEL We want a sustainable, flexible membership model that matches current income with potential to grow, reflects the industry and the key markets we represent, and is commensurate with the products, services and value that members receive – and is recognised by them as such.

SIMPLIFY AND MODERNISE We’ll organise to best serve our members. By mapping key processes and systems, together with technology scanning, benchmarking and best practice, we’ll improve operational efficiency and effectiveness and introduce mechanisms for continuous improvement.

IDENTIFY SIGNIFICANT NEW OPPORTUNITIES We want a clear structure and process for opportunity evaluation and for developing our membership, influence and income development.

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ANNUAL REPORT AND ACCOUNTS 2017

POLICY: MAKING A DIFFERENCE IN WHITEHALL, WESTMINSTER AND BRUSSELS OUR MEMBERS RUN AND PROVIDE SERVICES TO PENSION SCHEMES IN A COMPLEX ENVIRONMENT. TO HELP THEM WE NEED TO UNDERTAKE RESEARCH, ENGAGEMENT AND LOBBYING ACTIVITY ON A HUGE NUMBER OF ISSUES. THE PROGRAMME FOR THESE IS SET BY OUR DB AND DC COUNCILS, WITH OUR MASTER TRUST COMMITTEE.

HIGHLIGHTS IN 2017 HITTING THE TARGET

DB GREEN PAPER AND THE DB TASKFORCE

Automatic enrolment means more people than ever before are saving for their retirement. The pension freedoms mean they have more choice than ever before about how to enjoy the benefits of their saving. This is a cause for celebration, but there are also grounds for concern.

2017 saw several critical developments in the policy environment for DB pension schemes. The government’s wide-ranging Green Paper published in February, Security and Sustainability in Defined Benefit Pension Schemes, mirrored some of the work undertaken by the DB Taskforce we set up a year earlier – including in the crucial areas of consolidation and governance.

How do we make sure people know what they need in retirement and how much to save for it? How much is enough?

Our flagship cross-cutting policy project for 2017 involved an assessment of the ways in which public policy and industry practice is helping people achieve an adequate income in retirement. We carried out a wide-ranging consultation exercise with all of our key stakeholders in autumn 2017.

Our central proposal to help everyone get the retirement income they want or need is a set of new National Retirement Income Targets, simple yardsticks by which they can measure their journey to financial security in retirement. We also set out our proposals on pension contributions, property, working longer, governance, decumulation and engagement.

The project continues in 2018 – look out for our followup paper Hitting the Target: A Vision for Retirement Income Adequacy, published in July 2018.

We engaged extensively with our members, including through a series of cross-country roadshows, to produce our response to the Green Paper. Our members also got the opportunity to hear directly from DWP officials, including from Charlotte Clark – Director, Private Pensions and Stewardship – at our Annual Conference and Ronan O’Connor – Deputy Director, Private Pensions Policy – at our DB Taskforce launch event in September.

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The Taskforce published the second and third of its three reports during 2017: The Case for Consolidation (March) and the final paper Opportunities for Change (September).

Although the Taskforce has finished its work, these reports continue to provide the basis for our engagement with the DWP, the PPF, TPR and other stakeholders. We were pleased to see the DWP’s March 2018 White Paper, Protecting Defined Benefit Schemes, building on our work on consolidation and our recommendation for a DB Chair’s statement, as well as reflecting many of our views on trustees and corporate governance.

2017 AE REVIEW The PLSA provided early input to the statutory review of automatic enrolment and argued for the extension of its scope to cover younger workers and the self-employed, including those in the ‘gig economy’. The DWP included these elements in its final report in December 2017.

PENSIONS DASHBOARD We took part in the industry-led project group with a view to ensuring the project meets the needs of scheme members and is achievable for the many different types of pension scheme, large and small, that exist in the UK. Discussions with the DWP suggest that they are alive to these concerns.

DECUMULATION We set out PLSA member views on the operation of the Pension Freedoms in a submission to the Work and Pensions Select Committee. Our paper included proposals to introduce product standards for decumulation vehicles that will reduce the chance of individuals running out of money. The WPSC’s report, published in early April 2018, followed our recommendations.

YOUR VOICE ON POLICY ISSUES To make a difference on these issues, we work closely with government, regulators and policymakers so they understand how policy problems and solutions affect you.

In 2017 we replied to 20 consultations from government, regulators and other bodies. We held face-to-face meetings across the board with ministers, Number 10, shadow ministers, parliamentarians, Select Committees and senior civil servants at the DWP and HMT. We engaged regularly with TPR, the FCA and the PPF to ensure they fully understood our members’ views on the key policy issues of the day.

We also facilitated events and discussion between members and policymakers to ensure

your views are heard directly. We were delighted the new Pensions Minister Guy Opperman spoke at last year’s Annual Conference & Exhibition – where he made the major announcement of the DWP’s commitment to take forward the Pensions Dashboard.

In October 2017 we briefed parliamentarians on the All-Party Parliamentary Group on Pensions about our Hitting the Target report; we welcomed TPR Chief Executive Lesley Titcomb to a number of PLSA events throughout the year; and, as we go forward, we’re keen to continue and deepen our engagement so our members’ views are heard by decision-makers

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ANNUAL REPORT AND ACCOUNTS 2017

LIFETIME ISA

PENSION TRANSFERS

The PLSA provided a response to the FCA’s proposed changes to the Conduct of Business sourcebook so that people will fully understand the consequences for welfare benefits of taking out a LISA rather than a pension. The FCA handbook is to be amended in line with our submission.

We put forward PLSA member views on the FCA’s proposals on pension transfer advice, and took part in discussions on the industry-led Transfer and Reregistration Group.

EUROPE We made clear to government and Parliament the implications of Brexit for occupational pension schemes, and which form of Brexit would minimise the impact on schemes. We also worked with our EU partners in PensionsEurope, the pan-European confederation of pensions trade associations, to persuade the European Commission to extend the exemption for pension schemes from central clearing of OTC derivatives.

We set out our view of what constitutes good governance and the regulatory approach most likely to achieve it in our discussion paper Good Governance: How to get there in September.

The paper concluded that ‘inputs’ – technical and general skills, cognitive diversity and access to executive support – determine the quality of scheme governance. We immediately saw its relevance and influence as the Pensions Regulator focused on trustee board skills, risk management and advisor relationships.

PENSION SCAMS

ASSET MANAGEMENT

We put forward a comprehensive set of proposals to reduce the risk of pension scams. By adopting a risk-based approach we called for the adoption of a graduated level of authorisation according to the likelihood of scam activity.

GOVERNANCE

The asset management sector remained a key focus for regulators in 2017, with the FCA publishing the final report of its Asset Management Market Study in June. We engaged intensively with our working groups and the broader membership to inform our response to the interim report consultation. We

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worked with the full breadth of our membership to support the referral of the investment consultancy sector to the Competition and Markets Authority, and we’re continuing to engage with the FCA in 2018.

COST TRANSPARENCY As the trend towards greater transparency on investment costs and performance continued, we remained actively involved in the debate. We set up an internal cost transparency working group to support our role on the FCA’s Institutional Disclosure Working Group (IDWG), led by Dr Chris Sier. We’re continuing to feed pension scheme perspectives into this work throughout 2018.

LOCAL GOVERNMENT PENSION SCHEME Another busy year started with the FCA’s proposals to reclassify local authorities as retail investors once MiFID II came into effect in 2018, which would have had a huge impact on funds’ investment strategies. We expressed our concerns, highlighting the need to distinguish between local authorities and local authority pension funds, and noting

that pension funds needed their professional client status to invest in assets such as infrastructure.

The FCA later announced that it would revise the criteria for local authorities investing on behalf of an LGPS pension fund to opt-up to professional client status should they wish to, with a lower threshold for the size of the portfolio.

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ANNUAL REPORT AND ACCOUNTS 2017

MEMBERS: HELPING YOU RUN BETTER PENSION SCHEMES OUR FUND MEMBERS ARE EMPLOYERS OR PENSION SCHEMES THAT COLLECTIVELY PROVIDE PENSIONS FOR 20 MILLION PEOPLE IN THE UK. THEY INCLUDE LARGE, LONG-ESTABLISHED DB AND DC SCHEMES AS WELL AS SMALLER SCHEMES OF BOTH TYPES. THEY ALSO INCLUDE THE LARGEST MEMBERS OF THE MASTER TRUST SECTOR, WHICH HAS EXPANDED RAPIDLY AS THE VEHICLE FOR AUTO-ENROLMENT. Our business members provide pension schemes with the services they need to help their members achieve a better income in retirement, such as investment consultancy, asset management, legal advice, data management and administration.

Last year we welcomed 14 new fund members and 51 new business members to the PLSA. The fund membership renewal rate was 95%, and for business membership it was 93%.

LISTENING TO YOUR NEEDS Over the summer we carried out a quantitative survey of our members and a qualitative audit of stakeholders to build a picture of:

} Our reputation among members and stakeholders;

} Awareness and understanding of our mission and vision;

} Opinions of our overall performance; and } The strength of our relationships with stakeholders and members.

We appointed ICM Unlimited to undertake an online and telephone survey of PLSA members, and to interview up to 20 key stakeholders on our behalf.

The focus was on the development of the PLSA over the last three years, the clarity of our purpose and identity, and the relevance and impact of our work.

The results informed our review of strategy and decisions made about the range of products and services we’re offering in 2018. The key areas of strategic focus we identified are:

} Shape the future leadership of the PLSA. } Be clearer about we mean by and want from lifetime savings.

} Be decisive in addressing the future needs of the pensions industry.

} Balance our representation of members and leadership of the sector.

WE’LL TAKE ALL OF THAT FEEDBACK AND WE’LL SAY ‘OK, WHAT DOES THAT MEAN THEN? WHAT IS IT WE SHOULD BE LOOKING TO DO TO MAKE SURE OUR MEMBERS GET WHAT THEY WANT?’ JULIAN MUND, CHIEF EXECUTIVE, PLSA.

79 85 94 080 79 85 94 63 80 79 85 94

% % % % % % % % % % %% 13

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

WHAT OUR MEMBERS THINK OF US

EVERY THREE YEARS WE ASK WHAT OUR MEMBERS THINK OF THE PLSA. HERE’S WHAT WE LEARNT. PLSA

£

PLSA PLSA

80

%

HAVE A FAVOURABLE VIEW OF THE PLSA

79

%

85

%

RATE THE PLSA’S OVERALL PERFORMANCE AS GOOD

WOULD RECOMMEND ANOTHER ORGANISATION JOINS THE PLSA

94 63 %

WOULD RENEW THEIR MEMBERSHIP

%

THOUGHT THE PLSA WAS GOOD VALUE FOR MONEY

TOP 3: MEMBER BENEFITS

TOP 3: INFLUENCE AND POLICY

FUND MEMBERS 75% KEEPING UP TO DATE ON THE SECTOR 64% FREE DELEGATE PLACES AT CONFERENCES AND EVENTS 55% LEARNING BEST PRACTICE

OUR INFLUENCE 84% PENSION SCHEMES AND EMPLOYERS 83% GOVERNMENT AND POLICYMAKERS 76% PROFESSIONAL PENSION SERVICES

BUSINESS MEMBERS 76% NETWORKING OPPORTUNITIES 51% KEEPING UP TO DATE ON THE SECTOR 51% RAISING OUR OWN ORGANISATION’S PROFILE WITHIN THE PENSIONS INDUSTRY

POLICY AREAS 94% PENSION SCHEME 93% SCHEME GOVERNANCE 90% STEWARDSHIP AND CORPORATE GOVERNANCE

WHAT WE ARE DOING FOR OUR MEMBERS

IMPROVING OUR ENGAGEMENT WITH ALL OUR MEMBERS TO ENSURE THAT WE REPRESENT YOU.

COMMUNICATING A CLEAR VISION FOR THE FUTURE OF PENSIONS AND LIFETIME SAVINGS.

TELLING OUR MEMBERS WHAT WE ARE LOBBYING FOR, HOW WE ARE LOBBYING AND THE RESULTS WE ARE GETTING.

THANK YOU TO ALL OF THE MEMBERS WHO TOOK PART IN THIS RESEARCH. YOUR INPUT IMPROVES OUR OUTPUT.

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ANNUAL REPORT AND ACCOUNTS 2017

EVENTS OUR MEMBERS BENEFIT FROM THE BEST PENSIONS CONFERENCES AND EVENTS IN THE UK. THIS IS WHERE WE GATHER TO HEAR NEW IDEAS, EXCHANGE KNOWLEDGE AND MAKE CONTACTS. Programmes address the big political and economic picture, global trends and practical issues facing pension funds. We book first-class speakers from within and outside pensions, including CEOs, innovators, scientists, politicians, media personalities and public figures.

ANNUAL CONFERENCE & EXHIBITION October, Manchester DECODING THE FUTURE At the biggest and best pensions event in the UK, Professor Lynda Gratton, author of The 100 Year Life, Pensions Minister Guy Opperman, Chief Executive of the Royal Society Matthew Taylor, Broadcaster Matt Frei and a line-up of senior people from our membership led the debate on the future of pensions and savings.

} 1,566 attendees

INVESTMENT CONFERENCE March, Edinburgh DIVERSE INVESTMENTS, DIVERSE PERSPECTIVES The UK’s largest conference focused on pension fund investment took diversity as its theme. Former Shadow Chancellor Ed Balls, US FT Managing Editor Gillian Tett, CEO and author Margaret Heffernan, Lord Finkelstein and philosopher AC Grayling joined the most senior figures in the industry to argue passionately for embracing diversity in every aspect of our work.

} 952 attendees } 54 exhibitors and sponsors } 63 speakers } 30 conference sessions Plus – fringe meetings, trustee learning zones, breakfast updates and gala dinner

} 95 exhibitors and sponsors } 43 conference sessions

LOCAL AUTHORITY CONFERENCE May, Cotswolds

Plus – fringe meetings, trustee learning zones, breakfast updates and networking drinks reception

GLOBAL FORCES, LOCAL SOLUTIONS

} 89 speakers

3,408 PEOPLE ATTENDED

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CONFERENCES AND EVENTS

119

BUSINESS MEMBERS EXHIBITED

As the Local Government Pension Scheme continued to go through huge changes, we heard from a range of industry figures including Scheme Advisory Board Chair Councillor Roger Philips, Lord Hutton and Hermes Chief Economist Neil Williams; broadcasters Isabel Oakeshott and Tim Harford looked at the bigger picture.

} 393 attendees } 43 speakers } 21 exhibitors and sponsors } 16 conference sessions Plus – learning zone sessions, fringe meeting, lunch update meeting and gala dinner

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OTHER EVENTS

MAKING KEY TOPICS SIMPLE

On top of our three biggest conferences, in 2017 we ran:

} 3 Hot Topic Seminars

Our Made Simple Guides are an essential resource for people in the pensions industry. They’re written by industry expert sponsors in jargon-free English, and cover a range of technical issues.

} 10 PensionsConnection events

In 2017 we published guides to:

} Trustee Conference

} 3 Fund Member Breakfasts

} Cashflow-Driven Investment, sponsored by

} Local Authority Forum

Schroders

} Integrated Risk Management, with Cardano Risk

PLSA ACADEMY

Management and Lincoln Pensions

Our academy covers a wide range of training opportunities, including:

} GDPR, sponsored by Herbert Smith Freehills LLP } Fiduciary Management, sponsored by Schroders } Good Quality Data for Local Authorities and Good

} Introductory pensions training } Trustee training } Leadership and professional development,

Quality Data for the Private Sector, with Equiniti

} Factor Investing, sponsored by Robeco Institutional Asset Management B.V. International

including our Diverse Leadership Programme

} Webinars and virtual training } Expert teach-ins

} Indices and Benchmarks, sponsored by FTSE Russell

Visit our website to see sponsor interviews and download the guides.

} We also published a ‘Top 5’ guide to MiFID II for schemes, including LGPS funds

December 2017

May 2017

October 2017

October 2017

CASHFLOW DRIVEN INVESTMENT (CDI)

GOOD QUALITY DATA FOR LOCAL AUTHORITIES

FIDUCIARY MANAGEMENT

INTEGRATED RISK MANAGEMENT (IRM)

MADE SIMPLE GUIDE

MADE SIMPLE GUIDE

MADE SIMPLE GUIDE

MADE SIMPLE GUIDE

September 2017

October 2017

GENERAL DATA PROTECTION REGULATION (GDPR)

GOOD QUALITY DATA FOR THE PRIVATE SECTOR

MADE SIMPLE GUIDE

MADE SIMPLE GUIDE

March 2017

INDICES AND BENCHMARKS MADE SIMPLE GUIDE

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ANNUAL REPORT AND ACCOUNTS 2017

HOW WE WORK: DOING THE RIGHT THINGS IN THE RIGHT WAY OUR PEOPLE

PAY GAP REPORT

Our people are, of course, fundamental to our success. It is their hard work and expertise that secures the policy wins and delivers firstclass training and conferences. Although we’re a small organisation, of about 50 people, we have a diverse range of activities across policy, press and government affairs, events, marketing and publishing, member relations, business development and finance.

Organisations with over 250 employees have to publish information on the pay gap between their male and female employees.

We work to ensure all our staff are aware of all our work, and engaged with it. We hold regular briefings for all staff, as well as social events and awaydays.

We included all of our staff in our review of strategy during the year.

This year, we’ve continued to implement our Learning and Development Strategy to focus on the training and personal development of all our staff.

Although there’s no requirement for us to do so, as we’ve been campaigning for improved diversity in the pensions industry we think it’s only right that we report on this too. However, it’s worth noting that since we’re a small organisation, our figures can be skewed significantly by the pay of a few individuals.

For example, a replacement member of staff of the opposite sex can change a quartile percentage split by ten percentage points.

In April 2017 we had 19 male employees and 28 female employees. Overall, male employees, more of whom hold senior or more technical positions, were paid a higher average hourly rate than female employees.

We also support flexible working, helping our staff to manage their lives outside of the PLSA, including parents, carers and others who need different arrangements from the traditional working week.

GENDER PAY GAP STATISTICS

APRIL 2017

APRIL 2016

27%

19%

Median gender pay gap

16%

23%

Mean bonus pay gap

-12%

7%

Median bonus pay gap

27%

18%

Proportion of males receiving a bonus payment

84%

67%

Proportion of females receiving a bonus payment

90%

90%

APRIL 2017 FEMALE/MALE

APRIL 2016 FEMALE/MALE

36/64

50/50

Quartile 2

66/33

60/40

Quartile 3

50/50

60/40

Quartile 4 (lowest hourly rate of pay)

83/17

90/10

Mean gender pay gap

Figures include PQM subsidiary

PERCENTAGE OF EMPLOYEES IN EACH PAY QUARTILE Quartile 1 (highest hourly rate of pay)

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FINANCES

2017 marked the beginning of three years of change at the PLSA, with a new chief executive and the start of a new strategy. With strong reserves, we’re able to ensure that we can manage these changes and become even better at meeting the needs of our members.

In order to meet our long-term goals, we’re investing in our organisation now. Consequently, we’re reporting an operating deficit of £339,000 in 2017 compared to the operating surplus of £208,000 achieved in 2016. Our policy of aiming to produce a small surplus in most years enables us to do this.

Our revenue is broadly the same as last year, and the contribution from our income-generating activities is 4% higher than last year. We increased spending on our core policy work by £128,000 (+9%), but also spent £390,000 more than last year on non-routine activities.

As a result of this year’s deficit, our reserves have dropped from £5.0m to £4.3m at the end of 2017.

However, the Board considers this to be sufficient both to provide funds for our future development and to manage any contingency that might arise.

KEY FINANCIALS Membership subscriptions

£3.3M

Event income

£4.0M

Deficit Closing reserves

(£0.7M) £4.3M

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ANNUAL REPORT AND ACCOUNTS 2017

OUR GOVERNANCE

As PLSA members know, good governance is the foundation of success. That’s equally true for people running pension schemes and for the Association that represents them.

FIGURE 1: PLSA GOVERNANCE STRUCTURE, 2017

EXECUTIVE COMMITTEE

BOARD

BOARD COMMITTEES

DB COUNCIL

DC COUNCIL

MASTER TRUST COMMITTEE

ASSET OWNERS’ COMMITTEE

DC MULTI-EMPLOYER SCHEME COMMITTEE

DB MULTI-EMPLOYER SCHEME COMMITTEE LOCAL AUTHORITY COMMITTEE STEWARDSHIP ADVISORY GROUP

LEGAL PANEL

HITTING THE TARGET STEERING GROUP

EU WORKING GROUP

LOCAL GROUP LIASON COMMITTEE

19

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

OUR BOARD The Board makes sure that the voice of pensions and lifetime savings in the UK has a clear strategy and the necessary resources to fulfil it. It reviews our financial performance and the effectiveness of our lobbying, events, training and membership products and services.

Richard Butcher PTL

Frank Johnson

Chair

DB Council Representative

Lesley Williams Whitbread Immediate Past Chair Nicola Mark Norfolk County Council Vice Chair, DB Council

Carol Young Royal Bank of Scotland

Julian Mund

Chair, DC Council

Chief Executive

John Dembitz

Chris Hogg

Jamie Jenkins Standard Aberdeen Vice Chair, DC Council

National Grid

Independent

Chair, DB Council

Non-Executive Director

Jamie Fiveash Smart Pension DC Council Representative

Mark Cooke Chief Operating Officer

20

ANNUAL REPORT AND ACCOUNTS 2017

ON THE AGENDA IN 2017 Our strategic review and our review of our governance structure (see later in this section) were the focus of the Board’s time at several meetings last year. In addition to the usual cycle of meetings the Board held an awayday and an additional meeting to discuss strategy, and a group of Board

members met on several occasions to discuss governance. The Pensions Infrastructure Platform, our communications strategy and impact, our ongoing relationship with PensionsEurope (the panEuropean federation of associations like the PLSA), and management information and finances were also discussed frequently.

TABLE 1: BOARD MEETINGS 2017 NAME

POSITION

MEETINGS ATTENDED

NOTES

Richard Butcher

Chair

4/5

1

Lesley Williams

Immediate Past Chair

5/5

2

Ruston Smith

Immediate Past Chair

3/4

3

Chris Hogg

Defined Benefit Council Chair

1/1

4

Jackie Peel

Defined Benefit Council Vice Chair

3/4

3

Nicola Mark

Defined Benefit Council Vice Chair

0/1

5

Robert Brown

Defined Benefit Council Representative

3/4

3

Frank Johnson

Defined Benefit Council Representative

5/5

6

Carol Young

Defined Contribution Council Chair

4/5

7

Jamie Jenkins

Defined Contribution Council Vice Chair

0 /1

5

Jamie Fiveash

Defined Contribution Council Representative

4/5

John Dembitz

Independent Non-Executive Director

5/5

Joanne Segars

Chief Executive

0/2

8

Julian Mund

Chief Executive

5/5

9

Mark Cooke

Chief Operating Officer

5/5

Graham Vidler

Director of External Affairs

5/5

10

NOTES 1

Chair of Defined Contribution Council until October 2017

2

Chair until October 2017

3

Left the Board in October 2017

4

Joined the Board in October 2017

5

Joined the Board in December 2017

6

Chair of Defined Benefit Council until October 2017

7

Vice Chair of Defined Contribution Council until October 2017

8

Left the Board in June 2017

9

Appointed Chief Executive August 2017; previously Commercial Services Director.

10

Left the Board in April 2018.

The Board met on 16 February, 18 May, 7 September, 18 October and 10 December.

21

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

REMUNERATION COMMITTEE The following Board members were members of RemCo during 2017: } Frank Johnson

Chair, RemCo

} Richard Butcher

Association Chair

} Lesley Williams

Immediate Past Chair

RemCo operates under terms of reference that were last updated in February 2017.

RemCo’s key responsibilities in respect of Directors include: } Setting the policy of the Association on the remuneration of Executive Directors and any other members of staff, as recommended by the Chief Executive; } Reviewing the ongoing appropriateness and relevance of the policy; } Agreeing the specific remuneration policies for the Executive Directors and any other members of staff, as recommended by the Chief Executive, including any compensation payments; } Considering and agreeing actual remuneration and bonuses, performance over the year and objectives for the forthcoming year of the Executive Directors and any other members of staff, as recommended by the Chief Executive; and }

Determining packages on termination of employment.

RemCo considers market conditions, organisational and personal performance, and takes such legal or other professional advice as appropriate to enable its members to meet the terms of reference of the Committee.

During 2017, RemCo met eight times and its activities included: } Agreeing leaving terms for the outgoing CEO and remuneration terms for the interim/new CEO; } Deciding on base salaries and benefits for the Executive Directors; } Determining the 2017 annual bonus for the Executive Directors; } Agreeing objectives for 2018 for the Executive Directors; and } Tracking external developments and assessing their impact on the PLSA’s remuneration policy.

22

ANNUAL REPORT AND ACCOUNTS 2017

AUDIT & RISK MANAGEMENT COMMITTEE REPORT The following Board Members were members of the Audit & Risk Management Committee (ARMC) during 2017: } Ruston Smith (Chair) } Carol Young } John Dembitz } Jamie Fiveash (replacing Jackie Peel) ARMC operates under terms of reference that were last updated in December 2015. Its role is to oversee the PLSA’s financial and risk controls together with its relations with the external auditor. The Committee’s composition and terms of reference are reviewed annually by the Board.

ARMC’s key responsibilities include: } Making recommendations on the appointment or dismissal of the external auditors, including approving the terms of their engagement; } Discussing with the external auditor, prior to audit, the nature and scope of the audit; } Reviewing the annual financial statements before submission to the Board, including discussing any problems or reservations arising from the audit; } Approving the audit fee and monitoring fees paid for other work; } Considering the adequacy of internal financial controls and risk management, including procedures and documentation; and } Making recommendations to the Board on any relevant issue.

ARMC is entitled to meet with the external auditors without the presence of PLSA management. The company’s auditors are invited to attend the meeting where the annual accounts are considered.

The Committee is authorised to investigate any activity within its terms of reference, supported by the resources it needs to do so, such as legal or professional advice, and with full access to any information from any employee of the Association.

During 2017, ARMC met twice and its activities included: } Considering the Report & Accounts for the previous year for recommendation to the Board; } Reviewing the Risk Register prepared by the Executive Committee, focussing on the controls and progress made against the risk management action plan; and } At the request of the PLSA Board, assessing the potential risks posed to the PLSA from the activities of its subsidiary, Pensions Infrastructure Platform Ltd.

23

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

COUNCILS The Board delegates decisions on pensions policy to our Councils, the main policymaking bodies through which the PLSA develops and agrees policies on behalf of our 1,300 members.

DC policymaking. We also have a Master Trust Committee, which operates at a level equivalent to the Councils. These are supported by a range of subcommittees and working groups.

The Defined Benefit Council is responsible for the Association’s DB policymaking and the Defined Contribution Council for the Association’s

The Executive Committee is responsible for the day-to-day management of the Association and its Executive Directors sit on the Board.

DEFINED CONTRIBUTION COUNCIL TABLE 2: CURRENT MEMBERS David Astley

Group Pensions Manager

Trinity Mirror Group plc

Francois Barker

Partner and Head of Pensions

Eversheds LLP

Stephen Bowles

Head of Institutional Defined Contribution

Schroders Investment Management

Andy Cheseldine

Capital Cranfield

Dermot Courtier

Head of Group Pensions

Kingfisher plc

Emma Douglas

Head of DC Distribution

Legal & General Investment Management Ltd

Mel Duffield

Head of Pensions Strategy

Universities Superannuation Scheme Ltd

Jamie Fiveash

DC Council Representative

Chief Operating Officer

Smart Pension

Jamie Jenkins

Vice Chair

Head of Pensions Strategy

Standard Life

Simon Lee

Head of M&S Pension Trust and Chief Investment Officer

Marks & Spencer plc

Kevin O’Boyle

Head of Pensions Policy

BT Pension Scheme Management Ltd

John Stevenson

Group Pensions Manager

Next plc

Head of Pensions & Benefits

Royal Bank of Scotland Group

Carol Young

Chair

Carol Young was elected Chair in October 2017, taking over from Richard Butcher. Rob Booth and Richard Butcher left the Council during 2017.

The Council met on 1 February, 3 April, 14 June, 15 September and 1 November.

24

ANNUAL REPORT AND ACCOUNTS 2017

DEFINED BENEFIT COUNCIL TABLE 3: CURRENT MEMBERS Janet Brown

Partner

Sacker & Partners LLP

Robert Brown

Chairman Global Investment Committee

Willis Towers Watson Ltd

Bill Galvin

Group CEO

Universities Superannuation Scheme Ltd

Nick Greenwood

Pension Fund Manager

Royal Country of Berkshire Pension Fund

CEO

National Grid

Chris Hogg

Chair

Frank Johnson

Pensions and Lifetime Savings Association

Susan Martin

Chief Executive

David McGibbon

Chairman - Calmac Pension Trustees Calmac Pension Fund

Thomas Mercier

Chief Investment Officer

Schneider Electric

Mike Nixon

Secretary to the Trustees/ Head of Pensions

Leonardo

Jackie Peel

UK & Ireland Benefits Director

Mars Chocolate UK Ltd a/c ETBC

Head of Norfolk Pension Fund

Norfolk County Council

Client Director

PTL

Nicola Mark

Vice Chair

Colin Richardson

Local Pensions Partnership

Chris Hogg was elected Chair in October 2017, taking over from Frank Johnson. Nicola Elder and Arno Kitts left the Council during 2017.

The Council met on 21 February, 25 April, 21 June, 18 September and 21 November.

MASTER TRUST COMMITTEE TABLE 4: CURRENT MEMBERS Claire Altman

Head of Financial Services

Smart Pensions

Ken Anderson

Head of DC Solutions

Xafinity

David Bird

Head of Proposition Development

Lifesight

Emma Douglas

Head of DC

L&G Worksave

Tony Filbin

Chair

Chair

BlueSky

Patrick Heath-Lay

Chief Executive

The People’s Pension

Bruce Kirton

Chief Executive

Welplan

Paul McBride

Chair, PLSA DC MES Forum

Atlas

Sir Derek Morris

Chair

Cheviot Trust

Gavin Perera-Betts

Chief Customer Officer

NEST

Michael Ramsey

CEO

TPT

Gary Smith

Chair

Atlas

David Snowdon

DC Director

SEI

Andy Waring

Chief Executive

Ensign

The Committee met on 27 February, 20 June, 18 September and 23 November.

25

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

A NEW GOVERNANCE STRUCTURE FOR A MODERN ASSOCIATION In October 2016 we announced a review of our governance arrangements. We wanted to make sure the rules and structures that govern the PLSA are effective, help us serve members and give us flexibility to respond quickly to changes in our environment or members’ needs.

Our Governance Review produced three main proposals:

1. Adopt new Articles of Association, based on the most up-to-date standard model, that give the Board the necessary flexibility to govern the PLSA now and in the future.

Members approved the new Articles for adoption at the 2017 AGM in October.

2. Create a new Policy Board and associated

selection process to provide strategic oversight of our policy and advocacy work.

3. Change the composition and appointment process of the Board to give us access to a more diverse range of skills and increase Board stability.

We consulted members on the new Policy Board and changes to the Board from October 2017 to January 2018. Members supported both proposals.

ARTICLES OF ASSOCIATION New Articles of Association were adopted by members at our AGM on 20 October 2017. Based on the standard model introduced in 2009, they give the Board more flexibility than it previously had in determining its own composition and selection and the shape of the policy governance structure through which we work with our members to set PLSA policy positions.

Members retain control of their Association. The Articles require the Board to consult on detailed Rules on various aspects of governance and members have power to revoke Rules and direct the Board to take or avoid specified actions by special resolution.

A NEW POLICY BOARD The new Policy Board of 15-20 members will take responsibility for oversight of all our policy activity, policy positions on strategic issues, and setting the PLSA policy work programme. We expect it to meet for the first time in autumn 2018.

The Policy Board Chair and members will be appointed for three-year terms by selection committees and members will approve those appointed at the 2018 AGM. We began the search for a Policy Board Chair in March 2018, and other members will be recruited in summer 2018.

A STRONGER PLSA BOARD From October 2018 our Board will have a minimum of five non-executive directors (instead of the current nine), plus executive directors. Three of the five must be representatives of PLSA members, ordinarily including the Chair, and the remainder independent.

The Board now has power to determine its own selection processes. Greater separation from the policy governance structure will help increase stability – in the past three to five non-executive Board members have changed every two years.

26

ANNUAL REPORT AND ACCOUNTS 2017

DIRECTORS’ REPORT AND FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2017

CONTENTS DIRECTORS’ REPORT

27

INDEPENDENT AUDITORS’ REPORT

30

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

33

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

34

COMPANY STATEMENT OF FINANCIAL POSITION

35

CONSOLIDATED STATEMENT OF CHANGES IN RESERVES

36

COMPANY STATEMENT OF CHANGES IN RESERVES

36

CONSOLIDATED STATEMENT OF CASH FLOWS

37

NOTES TO THE FINANCIAL STATEMENTS

38

PENSIONS AND LIFETIME SAVINGS ASSOCIATION Company Number 01130269

COMPANY INFORMATION Directors

L A Williams R Butcher M A Cooke J A Dembitz J G Fiveash C F Johnson J O Mund (Chief Executive) C Young C D Hogg N Mark J Jenkins

Company secretary

E S J Bogira

Registered number

01130269

Registered office

Cheapside House 138 Cheapside London EC2V 6AE

27

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2017 The directors present their report and the financial statements for the year ended 31 December 2017.

Key financials:

BUSINESS REVIEW

Event income

£4.0M

Deficit

(£0.7M)

Closing reserves

£4.3M

The principal activity of the company is to help everyone achieve a better income in retirement.

The company’s finances are sound and appropriate for a not‑for‑profit organisation of its size. The company aims to generate a modest operating surplus each year and ensure there are sufficient reserves to give the company financial strength and depth.

The company had a change of Chief Executive during the year, with Joanne Segars leaving and Julian Mund taking over. The organisation has begun a strategic review to ensure that its future structure and operations remain efficient and relevant to its members and the market place. The review and its implementation will continue into 2018 and 2019.

PLSA recorded an operating deficit of £339,000 in 2017 (2016: surplus of £208,000) and a deficit of £717,000 (2016: surplus of £1,040,000) after deducting one off restructuring costs.

PLSA holds £4.3 million in reserves. The Board considers this an adequate amount both to provide funds for future development, and to manage any contingency that might arise. During 2014 the Board allocated £1.5 million of the reserves as a Development Fund, to be invested in activities outside the normal day to day work to deliver a new, broader outlook. Having spent £871k by the end of 2017 on activities such as rebranding, research and product development, the Board has determined that future spend will form part of the normal operating activities of the company, so no further allocation will be made.

Membership subscriptions £3.3M

The Company’s people are fundamental to the success of PLSA. It is their hard work and expertise that secures the policy wins and delivers first class training and conferences. Although the PLSA is a small organisation of about 50 people, it has a diverse range of activities across member relations, policy, press, events, publishing, training, standards setting, marketing, business development, finance and facilities management.

The Company works to ensure all the staff are aware of the full range of activities undertaken, and are engaged with it. Senior management hold regular briefings for all staff, as well as social events and away days. PLSA has been building a Learning and Development programme to increase the focus on the training and personal development of all staff to further increase performance. All staff can earn performance related bonuses reflecting the outcome of their reviews.

During 2017 PLSA continued to develop the work of the Leadership Group, those staff who have management and leadership responsibility but are not directors. This included significant involvement in defining the Company’s strategy. A number of this group have also been invited to join the Executive Committee, giving them greater exposure and input to strategic development and decision making. These activities are proving successful at engaging and developing managers.

PLSA staff profile at December 2017: 47 people in post Including 1 part-time, 1 fixed term contract 29 female 18 male

28

ANNUAL REPORT AND ACCOUNTS 2017

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2017 RESULTS AND DIVIDENDS

DIRECTORS

The results of the group show a deficit on ordinary activities before taxation of £332,241 (2016 ‑ surplus of £405,859).

The directors who served during the year were:

GROUP STRUCTURE The company is the sole member of Pensions Infrastructure Platform Ltd, a company limited by guarantee registered in England number 08365110. However the limit of that guarantee is £1 and no financial benefit arises from the Company’s relationship with this company.

Consequently PLSA does not consolidate Pensions Infrastructure Platform Ltd and its subsidiaries into the group accounts of Pensions and Lifetime Savings Association.

The Company has one active subsidiary, Pension Quality Mark Ltd., which aims to raise standards in the pensions industry through assessing the governance and communications of schemes.

INVESTMENT PORTFOLIO The company sold the last of its investments in January 2017 realising £741,989.

L A Williams J Segars (resigned 13 April 2017) R Brown (resigned 20 October 2017) R Butcher M A Cooke J A Dembitz J G Fiveash C F Johnson J O Mund (Chief Executive) J Peel (resigned 20 October 2017) R A M Smith (resigned 20 October 2017) G J E Vidler C Young C D Hogg (appointed 20 October 2017) N Mark (appointed 7 December 2017) J Jenkins (appointed 7 December 2017)

29

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

DIRECTORS’ RESPONSIBILITIES STATEMENT

DISCLOSURE OF INFORMATION TO AUDITORS

The directors are responsible for preparing the Directors’ Report and the consolidated financial statements in accordance with applicable law and regulations.

Each of the persons who are directors at the time when this Directors’ Report is approved has confirmed that:

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the Group and of the surplus or deficit of the Group for that period.

} so far as the director is aware, there is no relevant audit information of which the company and the Group’s auditors are unaware, and

In preparing these financial statements, the directors are required to: } select suitable accounting policies and then apply them consistently; } make judgements and accounting estimates that are reasonable and prudent; } prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

} the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company and the Group’s auditors are aware of that information.

AUDITORS The auditors, BDO LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

SMALL COMPANIES NOTE In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.

This report was approved by the board on 22 May 2018 and signed on its behalf.

J O Mund (Chief Executive) Director

30

ANNUAL REPORT AND ACCOUNTS 2017

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF PENSIONS AND LIFETIME SAVINGS ASSOCIATION OPINION

CONCLUSIONS RELATING TO GOING CONCERN

We have audited the financial statements of Pensions and Lifetime Savings Association for the year ended 31 December 2017 which comprise the consolidated Statement of Comprehensive Income, the consolidated and company Statement of Financial Position, the consolidated and company Statement of Changes in Reserves, the consolidated Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

In our opinion, the financial statements: } give a true and fair view of the state of the company’s affairs as at 31 December 2017 and of its result for the year then ended; } have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and } have been prepared in accordance with the requirements of the Companies Act 2006.

BASIS FOR OPINION We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

} the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or } the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

OTHER INFORMATION The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

31

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion, based on the work undertaken in the course of the audit: } the information given in the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and } the Directors’ report has been prepared in accordance with applicable legal requirements.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT

BY EXCEPTION In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Director’s report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: } adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or } the parent company financial statements are not in agreement with the accounting records and returns; or } certain disclosures of directors’ remuneration specified by law are not made; or } we have not received all the information and explanations we require for our audit; or } the directors were not entitled to prepare the directors’ report in accordance with the Small Companies regime and to the exemption from the requirement to prepare a strategic report.

RESPONSIBILITIES OF DIRECTORS As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

32

ANNUAL REPORT AND ACCOUNTS 2017

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located at the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities.

This description forms part of our auditor’s report.

Vanessa-Jayne Bradley (Senior Statutory Auditor) For and on behalf of BDO LLP, Statutory Auditor London United Kingdom BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

33

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2017 Note Revenue

4

Administrative expenses Operating (deficit)/surplus

5

Gain on revaluation of investments Interest

8

(Deficit)/surplus before taxation Tax (credit)/charge on (deficit)/surplus

9

(Deficit)/surplus for the financial year

There was no other comprehensive income for 2017 (2016 - £Nil).

The notes on pages 38 to 50 form part of these financial statements.

All amounts relate to continuing operations.

2017 £

2016 £

8,124,328

8,177,952

(8,463,643)

(7,970,449)

(339,315)

207,503

5,370

192,573

1,704

5,783

(332,241)

405,859

(384,463)

634,463

(716,704)

1,040,322

34

ANNUAL REPORT AND ACCOUNTS 2017

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017 Note

2017 £

2017 £

2016 £

2016 £

Fixed assets Tangible assets

10

533,305

526,154

533,305

526,154

Current assets 2,319,173

2,883,316

Current asset investments

-

736,619

Cash at bank and in hand

5,498,753

4,047,963

7,817,926

7,667,898

(4,034,598)

(3,160,715)

Debtors: amounts falling due within one year

11

Current liabilities Creditors: amounts falling due within one year

13

Net current assets

3,783,328

4,507,183

Net assets

4,316,633

5,033,337

4,316,633

5,033,337

4,316,633

5,033,337

Capital and reserves Profit and loss account reserve

18

The company’s financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved and authorised for issue by the board on 22 May 2018 and were signed on its behalf by

J O Mund (Chief Executive) Director The notes on pages 38 to 50 form part of these financial statements.

35

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017 Note

2017 £

2017 £

2016 £

2016 £

Fixed assets Tangible assets

10

533,305

526,154

533,305

526,154

Current assets 2,354,111

2,888,110

Current asset investments

-

736,619

Cash at bank and in hand

5,454,860

3,999,254

7,808,971

7,623,983

(3,983,475)

(3,136,845)

Debtors: amounts falling due within one year

11

Current liabilities Creditors: amounts falling due within one year

13

Net current assets

3,825,496

4,487,138

Net assets

4,358,801

5,013,292

4,358,801

5,013,292

4,358,801

5,013,292

Capital and reserves Profit and loss account

18

The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own statement of comprehensive income in these financial statements. The deficit after tax of the parent company for the year was £654,491 (2016 ‑ £1,040,541 surplus).

The company’s financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved and authorised for issue by the board on 22 May 2018 and were signed on its behalf by

J O Mund (Chief Executive) Director The notes on pages 38 to 50 form part of these financial statements.

36

ANNUAL REPORT AND ACCOUNTS 2017

CONSOLIDATED STATEMENT OF CHANGES IN RESERVES FOR THE YEAR ENDED 31 DECEMBER 2017 Group Income & expenditure reserve £

Total reserves £

At 1 January 2016

3,993,015

3,993,015

Surplus for the year

1,040,322

1,040,322

Total comprehensive surplus for the year

1,040,322

1,040,322

At 1 January 2017

5,033,337

5,033,337

Deficit for the year

(716,704)

(716,704)

Total comprehensive deficit for the year

(716,704)

(716,704)

At 31 December 2017

4,316,633

4,316,633

COMPANY STATEMENT OF CHANGES IN RESERVES FOR THE YEAR ENDED 31 DECEMBER 2017 Profit and loss account reserve £

Total reserves £

At 1 January 2016

3,972,751

3,972,751

Surplus for the year

1,040,541

1,040,541

Total comprehensive surplus for the year

1,040,541

1,040,541

At 1 January 2017

5,013,292

5,013,292

Deficit for the year

(654,491)

(654,491)

Total comprehensive deficit for the year

(654,491)

(654,491)

At 31 December 2017

4,358,801

4,358,801

37

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2017 2017 £

2016 £

(716,704)

1,040,322

Depreciation of tangible assets

219,869

194,490

Profit on disposal of tangible assets

(1,000)

-

1,704

8,091

Taxation credit

384,463

(634,463)

Decrease/(increase) in debtors

165,236

(389,885)

Increase in creditors

873,883

492,946

Corporation tax received

14,444

32,565

Gain on revaluation of investments

(5,370)

(192,573)

936,525

551,493

(227,020)

(225,410)

1,000

-

741,989

2,153,558

(1,704)

(8,091)

514,265

1,920,057

Net increase in cash and cash equivalents

1,450,790

2,471,550

Cash and cash equivalents at beginning of year

4,047,963

1,576,413

Cash and cash equivalents at the end of year

5,498,753

4,047,963

5,498,753

4,047,963

Cash flows from operating activities (Deficit)/surplus for the financial year Adjustments for:

Interest received

Net cash generated from operating activities

Cash flows from investing activities Purchase of tangible fixed assets Sale of tangible fixed assets Sale of short term unlisted investments Interest received Net cash from investing activities

Cash and cash equivalents at the end of year comprise: Cash at bank and in hand The notes on pages 38 to 50 form part of these financial statements.

38

ANNUAL REPORT AND ACCOUNTS 2017

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 1.

GENERAL INFORMATION

Pensions and Lifetime Savings Association is a private company limited by guarantee, incorporated in England and Wales under the Companies Act. The address of the registered office is given on the company information page. The nature of the company’s operations and principal activities are set out in the directors’ report.

2.

ACCOUNTING POLICIES

2.1

BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The company’s functional and presentational currency is GBP.

The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires group management to exercise judgement in applying the group’s accounting policies (see note 3).

Pensions and Lifetime Savings Association is the sole member of Pensions Infrastructure Platform Limited (“PiP Ltd”), a company limited by guarantee registered in England number 08365110. The limit of that guarantee is £1 and no other benefit arises from the company’s relationship with PiP Ltd. Consequently PLSA does not consolidate Pensions Infrastructure Platform Ltd and its subsidiaries into the group accounts of Pensions and Lifetime Savings Association.

Parent company disclosure exemptions In preparing the separate financial statements of the parent company, advantage has been taken of the following disclosure exemptions available in FRS 102:

} No cash flow statement has been presented for the parent company;

} Disclosures in respect of the parent company’s financial instruments have not been presented as equivalent disclosures have been provided in respect of the group as a whole; and

} No disclosure has been given for the aggregate remuneration of the key management personnel of the parent company as their remuneration is included in the totals for the group as a whole.

The following principal accounting policies have been applied:

2.2

BASIS OF CONSOLIDATION

The consolidated financial statements present the results of the company and its own subsidiaries (“the group”) as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

39

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

2.3 TURNOVER Turnover represents amounts receivable for goods and services provided in the normal course of business, and excludes Value Added Tax. Turnover comprises:

}

ale of membership subscriptions: the value of goods and services is recognised across the period S of subscription.

}

ales of conferences and events: the value of goods and services is recognised in the period the S event occurs.

P } ublications and other income: this is generally recognised on a receivable basis where entitlement to the income and the amount can be measured with reasonable certainty. It is reported gross of related expenditure.

2.4

TANGIBLE FIXED ASSETS

Depreciation is provided using the following rates and bases to write off the tangible fixed assets over their estimated useful economic lives: Leasehold improvements

- Straight line over the remaining length of the lease

Computer equipment and software - 33.33% straight line or 20% straightline

Office equipment/Event structures - 20% straight line

Website

- 33.33% straight line

The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

2.5

VALUATION OF INVESTMENTS

Current asset investments are valued at fair value.

2.6 DEBTORS Short term debtors are measured at transaction price, less any impairment.

2.7

CASH AT BANK AND IN HAND

Cash is represented by cash in hand and deposits repayable on demand.

40

ANNUAL REPORT AND ACCOUNTS 2017

2.8

FINANCIAL INSTRUMENTS

The group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors and loans to related parties.

Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short‑term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out‑right short‑term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset’s carrying amount and the present value of estimated cash flows discounted at the asset’s original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset’s carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the group would receive for the asset if it were to be sold at the reporting date.

2.9 CREDITORS Short term creditors are measured at the transaction price.

2.10 OPERATING LEASES: THE GROUP AS LESSEE Rentals paid under operating leases are charged to the Consolidated Statement of Comprehensive Income on a straight line basis over the lease term.

2.11 PENSIONS

Defined contribution pension plan Contributions to the group’s defined contribution pension scheme are charged to the Statement of Comprehensive Income in the year in which they become payable.

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

2.12 HOLIDAY PAY ACCRUAL A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Statement of Financial Position date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the Statement of Financial Position date.

2.13 INTEREST RECEIVABLE Interest income is recognised in the Consolidated Statement of Comprehensive Income using the effective interest method.

2.14 PROVISIONS FOR LIABILITIES Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.

Provisions are charged as an expense to the Consolidated Statement of Comprehensive Income in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Statement of Financial Position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.

When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.

2.15 TAXATION Tax is recognised in the Consolidated Statement of Comprehensive Income, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company and the group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of Financial Position date, except that:

} The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;

} Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and

} Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

41

42

ANNUAL REPORT AND ACCOUNTS 2017

3.

JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Preparation of financial statements requires management to exercise judgement in applying the company’s accounting policies. Estimates and assumptions used in the preparation of the financial statements are continually reviewed and revised as necessary. The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Taxation: The group establishes provisions based on reasonable estimates, for possible consequences of audits by the UK tax authorities. The amount of such provisions is based on various factors, such as experience with previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority.

Management estimation is required to determine the amount of deferred tax that can be recognised, based upon likely timing and the level of future taxable profits.

Tangible fixed assets (see note 10): Tangible fixed assets, are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re‑assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

There are no key sources of estimation uncertainty.

4. REVENUE An analysis of turnover by class of business is as follows: 2017 £

2016 £

Membership subscriptions

3,252,129

3,240,162

Events Income

3,972,546

4,074,583

Other income

775,581

659,605

Costs recharged to PIP Ltd and its subsidiaries

124,072

203,602

8,124,328 8,177,952 All turnover arose within the United Kingdom.

43

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

5.

OPERATING (DEFICIT)/SURPLUS

The operating (deficit)/surplus is stated after charging: 2017 £

2016 £

Research

200,389

253,278

Depreciation of tangible fixed assets

219,869

194,490

15,500

15,000

Fees payable to the Group’s auditor and its associates for the audit of the company’s annual financial statements

Fees payable to the Group’s auditors and its associates for other services to the group: - Outsourcing fees

5,150

5,000

- Taxation compliance services

5,150

5,000

1

(541)

Operating lease rentals

421,000

430,675

Defined contribution pension cost

360,505

351,778

Exchange differences

6. EMPLOYEES All staff are employed by Pensions and Lifetime Savings Association. Pensions and Lifetime Savings Association then makes an appropriate recharge for use of staff, including directors, to its subsidiaries.

The average monthly number of employees, including directors, during the year was 46 (2016 ‑ 48).

7.

DIRECTORS’ REMUNERATION

Directors’ remuneration

2017 £

2016 £

1,204,493

968,898

Key management personnel Key management personnel are considered to be the directors who have the responsibility and authority for planning, directing and controlling the activities of the group.

8. INTEREST

Government stock Bank interest

2017 £

2016 £

-

(2,308)

1,704

8,091

1,704

5,783

44

ANNUAL REPORT AND ACCOUNTS 2017

9. TAXATION 2017 £

2016 £

Origination and reversal of timing differences

384,463

(634,463)

Taxation on deficit on ordinary activities

384,463

(634,463)

Deferred tax

Factors affecting tax charge/(credit) for the year The tax assessed for the year is higher than (2016 ‑ lower than) the standard rate of corporation tax in the UK of 20% (2016 ‑ 20%). The differences are explained below: 2017 £

2016 £

(332,241)

405,859

(63,945)

81,374

1,121

-

87

-

(5,565)

-

13,551

6,353

(1,034)

(38,515)

104

95,513

13,390

26,889

-

999

Adjust closing deferred tax to average rate of 20.00%

88,868

111,824

Adjust opening deferred tax to average rate of 20.00%

(84,581)

(91,890)

-

(827,010)

422,467

-

384,463

(634,463)

(Deficit)/surplus on ordinary activities before tax Effects of: Tax on (deficit)/surplus on ordinary activities at standard CT rate of 19.25% (2016 - 20%) Fixed asset differences Other permanent differences Adjustments to tax charge in respect of prior periods Expenses not deductible for tax purposes Income not taxable for tax purposes Adjustments to brought forward values Chargeable gains/(losses) Group relief surrendered/(claimed)

Deferred tax not recognised Deferred tax losses not utilised Total tax charge/(credit) for the year

45

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

10.

TANGIBLE FIXED ASSETS GROUP AND COMPANY Long-term leasehold property £

Computer equipment Office equipment and software £ £

Website £

303,815

29,160

457,638

565,967

1,356,580

Additions

-

78,027

13,349

135,644

227,020

Disposals

-

(25,000)

-

-

(25,000)

303,815

82,187

470,987

701,611

1,558,600

239,990

21,512

299,514

269,410

830,426

35,674

14,917

43,415

125,863

219,869

-

(25,000)

-

-

(25,000)

275,664

11,429

342,929

395,273

1,025,295

At 31 December 2017

28,151

70,758

128,058

306,338

533,305

At 31 December 2016

63,825

7,648

158,124

296,557

526,154

Total £

Cost or valuation At 1 January 2017

At 31 December 2017 Depreciation At 1 January 2017 Charge for the year on owned assets Disposals At 31 December 2017 Net book value

46

ANNUAL REPORT AND ACCOUNTS 2017

11. DEBTORS Group

Group

Company

Company

2017 £

2016 £

2017 £

2016 £

1,399,067

811,831

1,329,337

766,767

-

-

115,676

73,457

Other debtors

118,355

970,847

118,355

962,487

Prepayments and accrued income

551,751

451,731

551,751

451,731

-

14,444

-

-

250,000

634,463

238,992

633,668

2,319,173

2,883,316

2,354,111

2,888,110

Trade debtors Amounts owed by group undertakings

Tax recoverable Deferred taxation

The impairment write back of £3,334 (2016 ‑ £18,592) in respect of bad and doubtful trade debtors was recognised against trade debtors and the group surplus and deficit for the period.

Other debtors includes an amount for PiP Ltd for £25,393 (2016 ‑ £757,529) for costs recharged in the period.

12.

CURRENT ASSET INVESTMENTS

The investment in a Diversified Growth Fund held at the start of the year was administered by Ruffer LLP. Diversified Growth Fund £ At 1 January 2017 Sales

736,619 (741,989)

Change in market value

5,370

At 31 December 2017

-

47

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

13.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Group 2017 £

Group 2016 £

Company 2017 £

Company 2016 £

Trade creditors

254,815

253,394

254,130

247,142

Other taxation and social security

547,760

554,887

534,788

542,553

1,229

80,523

1,229

80,164

3,230,794

2,271,911

3,193,328

2,266,986

4,034,598

3,160,715

3,983,475

3,136,845

Other creditors Accruals and deferred income

14.

AMOUNTS HELD ON TRUST

At 31 December 2017, the company held £400,317 (2016 ‑ £400,254) on trust on behalf of its members to finance the costs associated with taking a case to the VAT tribunal relating to the treatment of fund management charges payable by defined benefit pension funds. A cumulative amount of £749,088 has been spent on professional fees after allowing for VAT recovered. The case was referred to the Court of Justice of the European Union and its judgement was issued on 7 March 2013. The judgement was unfavourable.

A new case by another claimant has been raised and the members’ case has been sat behind this. The case is currently paused because connected but not associated cases have been going through the courts and now through appeals. It is estimated that any further costs to be incurred will be less than the funds still held on trust and the remaining balance will then be returned to the members who provided the finance.

15.

FINANCIAL RISK MANAGEMENT

The group considers it faces two main areas of financial risk ‑ liquidity risk and customer credit exposure.

Liquidity risk The objective of the group in managing liquidity risk is to ensure that it can meet its financial obligations as and when they fall due. The group expects to meet its financial obligations through operating cash flows. The group is in a position to meet its commitments and obligations as they fall due.

Customer credit exposure The group may offer credit terms to its customers which allow payment of the debt after delivery of the services. The group is at risk to the extent that a customer may be unable to pay the debt on the specified due date. This risk is mitigated by embedding strong customer relationship management through the group.

48

ANNUAL REPORT AND ACCOUNTS 2017

16.

FINANCIAL INSTRUMENTS Group 2017 £

Group 2016 £

Company 2017 £

Company 2016 £

-

736,619

-

736,619

7,016,174

5,830,641

7,018,228

5,801,965

7,016,174

6,567,260

7,018,228

6,538,584

(635,837)

(502,186)

(612,069)

(490,648)

(635,837)

(502,186)

(612,069)

(490,648)

Financial assets Financial assets measured at fair value through profit or loss Financial assets measured at amortised cost

Financial liabilities Financial liabilities measured at amortised cost

Financial assets measured at fair value through profit or loss comprise of current investments.

Financial assets measured at amortised cost comprise of trade debtors, other debtors, cash and amounts owed by subsidiaries.

Financial liabilities measured at amortised cost comprise trade creditors, accruals and other creditors.

49

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

17.

DEFERRED TAXATION

Group

2017 £

2016 £

634,463

-

(384,463)

634,463

250,000

634,463

2017 £

2016 £

633,668

-

(394,676)

633,668

238,992

633,668

Group 2017 £

Group 2016 £

Company 2017 £

Company 2016 £

Fixed asset timing differences

(61,921)

(13,319)

(62,573)

(14,114)

Short term timing differences

113,274

393,671

113,274

393,671

Capital gains

(8,498)

(8,499)

(8,498)

(8,499)

Tax losses carried forward

207,145

262,610

196,789

262,610

250,000

634,463

238,992

633,668

At beginning of year Charged to profit or loss At end of year

Company At beginning of year Charged to profit or loss At end of year

50

ANNUAL REPORT AND ACCOUNTS 2017

18. RESERVES Profit and loss account

Profit and loss account reserve represents a cumulative surplus or deficit.

19.

COMMITMENTS UNDER OPERATING LEASES

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the leased asset to the group. All other leases are classified as operating leases.

At 31 December 2017 the Group and the company had future minimum lease payments under non‑cancellable operating leases as follows:

Not later than 1 year

Group 2017 £

Group 2016 £

Company 2017 £

Company 2016 £

327,452

415,000

327,452

415,000

-

326,815

-

326,815

327,452

741,815

327,452

741,815

Later than 1 year and not later than 5 years

The company has a lease on its office premises which expires in October 2018. There was a break clause included in the lease which was not exercised in 2014. New terms were agreed in 2015.

20.

MEMBERS’ FUNDS AND ARTICLES OF ASSOCIATION

The company is limited by guarantee and has no issued share capital. Every member, in pursuance with Clause 4 of the Memorandum and Articles of Association, undertakes to contribute a sum not exceeding £1 in the event of the company being wound up whilst they are a member or within one year after they cease to be a member.

21.

SUBSIDIARY UNDERTAKINGS

At the year end, the company controlled Pension Quality Mark Limited a company limited by guarantee. Pension Quality Mark Limited is an entity promoting quality in defined contribution pension schemes. This company’s registered office is 6th Floor Cheapside House, 138 Cheapside, London, United Kingdom, EC2V 6AE. The results of Pension Quality Mark Limited are consolidated into these accounts.

The company is also the sole member of The National Association of Pension Funds Limited, a dormant company limited by guarantee. This company’s registered office is Cheapside House, 138 Cheapside, London, United Kingdom, EC2V 6AE.

PENSIONS AND LIFETIME SAVINGS ASSOCIATION

DISCLAIMER

The Pensions and Lifetime Savings Association 2018 Š All rights reserved.

You must not reproduce, keep, or pass on any part of this publication in any form without permission from the publisher.

You must not lend, resell, hire out, or otherwise give this book to anyone in any format other than the one it is published in, without getting the publisher’s permission and without setting the same conditions for your buyers.

Material provided in this publication is meant as general information on matters of interest. This publication is not meant to give accounting, financial, consulting, investment, legal, or any other professional advice.

You should not take action based on this guide and you should speak to a professional adviser if you need such information or advice.

The publisher (The Pensions and Lifetime Savings Association) or sponsoring company cannot accept responsibility for any errors in this publication, or accept responsibility for any losses suffered by anyone who acts or fails to act as a result of any information given in this publication.

51

Cheapside House, 138 Cheapside, London EC2V 6AE T: 020 7601 1700 E: plsa@plsa.co.uk www.plsa.co.uk Pensions and Lifetime Savings Association 2018 Š All rights reserved.

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