“We have built a strong foundation for the future long-term benefit of funeral directors and planholders.”
On behalf of the Board of Trustees, I am pleased to present our Annual Review of The Golden Charter Trust for the year to 31 March 2017. The Trustees are committed to providing clear information about the Trust and the funds we hold on behalf of funeral directors and plan holders.
How the Trust has performed in the year to 31st March 2017:
I am please to report another year of continued growth in the net asset value of the Trust through both increased cash flow from new plan sales by Golden Charter Limited, and positive investment returns. The audited net assets of the Trust at the year-end totalled £936m (2016 audit: £761m). This demonstrates the ongoing strength of The Golden Charter Trust with the average value of an outstanding funeral plan at the year-end now £3,020 (2016: £2,869).
The average value of a plan, and the value of the Trust, have both grown significantly over the last five years. The first chart below shows how the average value of an outstanding plan has grown from £2,455 in 2013 to £3,020 in 2017. The second chart shows how the value of the Trust has grown from £435m at 31 March 2013 to £936m at 31 March 2017. Looking ahead, we anticipate that the average plan value and the Trust’s value, will continue to grow in line with Golden Charter Limited’s forecasts for plan sales and from prudent management of our investments.
You will see the detailed spread of the underlying investments and assets in our Investment Report.
Review of Investment Strategy:
Last year I reported that the Board of Trustees had taken the decision to change our asset allocation policy to meet our principal investment objective, which is to invest the Trust assets in such a way as to maximise the likelihood that the assets will be sufficient to meet the costs of all pre-paid funeral plans as they mature. Our new strategy required a move to holding a broader mix of investments, to include gilts, equities, property and infrastructure funds.
I am pleased to report that this major exercise is almost complete and full details are given by my fellow Trustee, Gareth Howlett in his Investment Report. I would like to take the opportunity to thank the Trustees who serve on our Investment Strategy Group and our investment advisers, Barnett Waddingham, for all their endeavours in implementing this important change.
Actuarial valuation as at 31 March 2017:
The Actuary’s Report below confirms that the Trust assets continue to cover more than 100% of future expected funeral director payments, when taking into account anticipated future consumer price inflation.
During the year, Golden Charter Limited submitted its 2016 annual return to the FPA, which included the submission of the Trust’s audited accounts and actuarial report.
The accounts to 31 March 2017 for the Golden Charter Trust, and its subsidiary, The Golden Charter Trust Limited, have been audited by Grant Thornton.
The Trust’s Audit Committee, chaired by Geraldine Gammell, monitors the integrity of the Trust’s financial statements, reviews internal financial controls including risk management systems, and recommends the appointment of external auditors to the Board of Trustees.
Uplift to plan values and additional maturity payments:
It is the aim of the Trust to pay growth on outstanding funeral plans at a level at least equivalent to the annual percentage increase in the Consumer Price Index. Our prudent management of the Trust fund has allowed the Trust to continue to uplift plan values and deliver sustainable plan payouts to independent funeral directors.
In addition, the Trustees are pleased to confirm that additional maturity payments, as advised by Golden Charter Limited, will be paid from the Trust to qualifying funeral directors, on each plan maturing between 1 April 2017 and 31 March 2018. The Trust’s ability to continue to pay additional maturity payments from the Trust will be reviewed annually by the Trustees and is dependent on the impact of investment performance on the funding level of the Trust as advised by our Actuary.
The Trust continues to be governed in an efficient and effective manner in accordance with the Trust Deed, the duties and responsibilities obligated on the Trustees under Trust Law, and the FPA Rules and Code of Practice.
I believe we have built a strong foundation for the future, and you can be reassured that, with a combination of retaining a high calibre of Trustee, adherence to regulation, and maintaining the Trust’s reputation, the Board of Trustees will continue to safeguard the assets of The Golden Charter Trust for the long-term benefit of funeral directors and plan holders.
Finally, i would like to thank my fellow Trustees for their hard work, commitment and support over the year. I would like to make a special mention of thanks to James Tovey who resigned from the Trust Board in November 2016 to take up a position as non-executive director of Golden Charter Limited. I am also delighted to welcome Paul Stevenson who has replaced James as Trustee. As Vice President of SAIF Scotland and a member of the SAIFCharter Executive, Paul will bring valuable and relevant experience to the Board of Trustees.
Chairman of The Golden Charter Trust