Issue - meetings

Report by the Chairman of the Pension Advisory Board.

The Board is asked to note the current issues relating to Scheme Regulations and Guidance.

22.1     The Board received a report by the Chairman of the Pension Advisory Board (copy appended to the signed minutes).

22.2     The Chairman introduced the report and confirmed that the Local Government Pensions Committee (LGPC) bulletin 203 had been released which outlined Exit Caps, McCloud and the Consumer Price Index (CPI) increase.

22.3     The Pensions Committee report on Scheme Changes had been included as an appendix; and training on this subject would be delivered by the fund actuary after the meeting.

22.4     Tara Atkins confirmed that officers were currently focussed on the Exit Cap proposals.

22.5     Resolved – That the Board notes the current issues relating to Scheme Regulations and Governance.

Report by the Director of Finance and Support Services.

The Committee is asked to note the update, including the impact on the pensions administration team and the actuary.  The Committee is also asked to agree the amendments to the funding strategy statement as a result of employer flexibilities.

33.1     The Committee considered a report by the Director of Finance and Support Services (copy appended to the signed minutes).

33.2     Katharine Eberhart introduced the report and confirmed that McCloud and Goodwin were elements that required consideration.

33.3     Steven Law, Hymans Robertson, gave a presentation to the Committee which covered the impact of McCloud, Her Majesty’s Treasury and Scheme Advisory Board (SAB) Cost Sharing, Goodwin, the £95k exit cap, and changes to the regulations concerning employer management (copy appended to the signed minutes).

33.4     Steven Law explained that these areas will result in a large increase in administration workloads.

33.5     The Committee made comments including those that follow.

•     Raised concerns that the £95k exit cap changes could negatively impact members receiving low pay.  – Katherine Eberhart gave reassurance that officers would be responding to the consultation, including the points that had been raised.

•     Queried the increase in administration workloads and if the administration team would be changing their contract terms in response.  – Katherine Eberhart confirmed that a discussion was anticipated due to the required additional resources.

•     Asked if the backdated work for gender issues would be looking into living spouses or estates.  – Steven Law reported that Hymans Robertson were still awaiting guidance on this.

•     Sought clarity on what guidance was offered to members when they had to choose between options such as the example in the presentation.  – Steven Law confirmed that the pension fund was not allowed to give advice and so it was for the individual to seek their own advice.

•     Queried cessation deficits and how this would impact the fund when an employer leaves the scheme when the organisation has folded with no income.  – Steven Law explained that the order of responsibility would be followed for the deficit, in the order of employer, then administrators, then any securities in place, then the other employers that stand behind the employer.

33.6     Steven Law reported that the implementation dates of the £95k pay cap would be early November; the LGPS regulation changes would be late this year or early next year.  For other elements, Hymans Robertson were still waiting on guidance from the SAB on the impact on Funding Strategy Statements.

33.7     The Chairman confirmed that a change had been made to the report.  The punctation for paragraph 6.3, 4^th bullet had been changed so it now read as ‘Except in exceptional circumstances, such as an employer nearing cessation, market volatility and changes to asset values will not be considered as a basis for a change in contributions outside a formal valuation’.

33.8     Resolved – that:

1)   The update, including the impact on the pensions administration team and the actuary is noted.

2)   The amendments to the funding strategy statement as a result of employer flexibilities, as amended in minute 33.7, are agreed.