Issue - meetings

Report by the Director of Finance and Support Services.

The Panel is asked to note the update.

The Panel also to receive a presentation from the fund actuary.

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

33.2   Rachel Wood introduced the report which set out the summary since the last meeting.  The report confirmed that the current funding level was 112%, and that new rates following the valuation would be effective from 1 April 2020.

33.3   Steven Law gave a presentation to the Panel on the 2019 Valuation Results (copy appended to the signed minutes).

33.4   Steven Law spoke through the presentation which outlined the calculations and assumptions that formed the valuation work to ensure that the pension fund could deliver its requirements for members.  The presentation included 2 updates from Central Government.  The first confirmed there would be a 2022 valuation, but it was unconfirmed what would happen after this.  The second concerned the value of liabilities and that contribution rates needed to take allowance of McCloud and cover this within the valuation.

33.5   Steven Law explained that it was no longer required for members to submit nomination forms which was previously required to pay death grants.  The fund had the authority to choose to pay an alternative person than the one stated on a nomination form.  Steven Law confirmed that there was general rules and criteria for these decisions.  -  The Chairman requested that clarity on this process should be available for the next meeting (document appended to the signed minutes).

33.6   The Panel made comments including those that follow.

•      Queried if Retail Prices Index (RPI) would be removed from future valuation calculations.  – Steven Law predicted that it could be replaced with an alternative in the future.

•      Asked how life expectancy for future members was considered.  – Steven Law explained that this was allowed for in mortality projections portion of assumptions.  The pace of increases in life expectancy is reflected in this assumption.

•      Commented on the consideration for salary increases and that average earnings could outpace the Consumer Prices Index (CPI); and asked if it would it be prudent to expect salaries to match the market.  – Steven Law explained that the first year had lower paid staff get increases as the living wage was introduced, this was used to help with considering the average.  Promotional increases are applied on top of the 0.5%.

•      Reported on the increases to British Telecom (BT) pensions for women following a change in pension calculations and asked if this was unique to BT.  – Steven Law explained this was not unique to BT and was linked to the Barber ruling and the Lloyds ruling concerning sexual discrimination in pension ages.  The Lloyds ruling would impact the Local Government Pension Scheme (LGPS).  A lower anticipated return rate had been picked for the LGPS which made approximate allowance for this and for the McCloud outcome.

•      Noted the overall funding level of 112% and queried the funding level for various employers.  – Steven Law confirmed that employers had different values which were still being calculated.  ...  view the full minutes text for item 33