“I believe the Trust is well placed to meet the challenges that lie ahead.”
How the Trust has performed in the year to 31 March 2018:
I am delighted to report that the Trust reached a historic milestone in the year to 31 March 2018 when its net assets rose to £1 billion. This was achieved by another year of growth from a combination of cash flow from new plan sales by Golden Charter Limited, and strong returns from the managed investments. The audited net assets of the Trust at the year-end totalled £1.031 million (2017 audited – £936 million). The chart below shows how the value of the Trust has grown over the five years from 31 March 2014.
The steady growth in the net assets of the Trust is reflected by the growth in the average value of an outstanding funeral plan at the year-end which, as can be seen from the chart below, is now £3,111 (2017 – £3,020).
We anticipate that the Trust’s value, and the average plan value, will continue to grow in line with Golden Charter Limited’s forecasts for plan sales and from prudent management of our investments.
The principal objective of the Trust is to invest the funds received from plan holders with a view to ensuring that there are sufficient funds to meet the anticipated invoice costs of all outstanding and maturing funeral plans.
Last year we completed a significant portfolio rebalancing exercise moving to a broader mix of investments, including gilts, equities, property and infrastructure funds. The Board is very pleased with the outcome of this exercise and Gareth Howlett, Chair of the Investment Strategy Group, gives more details on the performance of the investment portfolio in his Investment Report.
Actuarial valuation as at 31 March 2018:
In our Actuarial Report, you will see that our Actuary states that the Trust’s assets continue to cover more than 100 per cent of future expected funeral director payments, when taking into account anticipated future consumer price inflation.
During the year, Golden Charter Limited submitted its 2017 annual return to the Funeral Planning Authority (the FPA) of which it is a registered provider. The submission includes the Trust’s audited accounts and Actuarial Report, confirmation that the Trust complies with the Rules, and Code of Practice of the FPA, and a statement signed by the Trustees, confirming that there are sufficient funds held in the Trust to meet the obligations to customers and funeral providers.
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.
During the year the Audit Committee had a particular focus on ensuring that adequate cyber security measures were in place and that the Trust was taking the necessary steps to identify and implement its responsibilities under the new General Data Protection Regulations.
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 long term increase in the Consumer Price Index. Over the years, our prudent management of the Trust’s funds has allowed the Trust to continue to uplift plan values and deliver sustainable plan pay-outs to independent funeral directors.
In February it was explained that, going forward, the growth rates for Independent Way plans and Golden Charter set plans would be aligned and that we would have the single objective to pay at least long term CPI on all plans. This change will reinforce our ability to deliver sustainable pay-outs and our aim to ensure the Trust remains fully funded.
In addition, the Trustees are pleased to confirm that additional maturity payments, as advised by Golden Charter Limited, will continue to be paid from the Trust to qualifying funeral directors. The ability to continue to pay additional maturity payments from the Trust is reviewed annually in November of each year by the Trustees and is dependent on the impact of investment performance on the funding level of the Trust as advised by our Actuary.
In the last 12 months the funeral planning industry has come under increasing scrutiny and this has increased the Trustees’ resolve to provide clear information about The Golden Charter Trust and the funds we hold on behalf of plan holders for the ultimate beneficiaries, the funeral directors.
During the year we launched a new website for the Trust which makes it easier to obtain information about the Trust and its Trustees. The website includes a revised Frequently Asked Questions (FAQs) page which reflects the key questions current and prospective plan holders ask about the Trust.
The managed investments of the Trust are held in our subsidiary company, The Golden Charter Trust Limited and the accounts of this company are filed on public record at Companies House.
We also recognise the importance of communicating directly with funeral directors who are the beneficiaries of the Trust. This includes trustee attendance at the SAIF Charter’s AGM and Executive meetings. The Trust also contributes articles on relevant topics to the SAIF Insight magazine.
The Trust continues to be governed in an efficient and effective manner in accordance with its Trust Deed, the duties and responsibilities obligated on the Trustees under Trust Law, and the FPA Rules and Code of Conduct.
Without being complacent, I believe the Trust is well placed to meet the challenges that lie ahead. Our Board comprises a high calibre of trustee with a broad mix of skills and experience. We remain committed to safeguarding 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 and the employees of the Trust for their valued contribution, commitment and support over the year.