Issue - meetings
ACTUARIAL VALUATIONS PROCESS AND RESULTS UPDATE
Meeting: 24/09/2019 - Pensions Committee (Item 6)
6 2019 Actuarial Valuation Assumptions and Draft Funding Strategy Statement PDF 439 KB
Additional documents:
- Appendix 1 - Actuarial Valuation Training and Presentaion, item 6 PDF 886 KB
- Appendix 2 - Draft LBTH Pension Fund updated FSS version 1 for discussion, item 6 PDF 483 KB
Minutes:
The Committee received a report that provided a summary of progress to date on the 2019 actuarial valuation process. It was noted that the London Borough of Tower Hamlets Pension Fund in accordance with Local Government Pension Scheme (LGPS) regulations undergoes a full actuarial valuation once every three years, the results of which are used to determine contribution rates for each employers within the Fund for the following three years. The main points of the discussion on the report may be summarised as follows:
The Committee noted:
· That employee contributions are set by the Government, which means that employers must pay the balance of any cost in delivering the benefits to members;
· That the Funding Strategy Statement (FSS) focuses on the pace at which these liabilities are funded, and insofar as is practical, the measures to ensure that employers or pools of employers pay for their own liabilities;
· That the draft FSS is circulated to all employers who participate in the Fund in Quarter 4 2019 so as to allow comments to be made prior to its finalisation. Comments received from that consultation will be brought to the attention of this Committee along with the final FSS on 19 March 2020;
· An update on the Actuarial Valuation process from the Fund’s actuary, Hymans Robertson, who have been reviewing the data supplied to them by the Council over the summer and is in the process of assessing the current funding position and contributions payable by both the Council and other employers in the Fund;
· That the Hymans will be producing initial results on the overall fund that will be presented to Members in November 2019 when the Committee will be asked to note the new contribution rates for employers that will be effective from 1st April; 2020 for the next three years up to 31st March 2023;
· That the funding strategy essentially is a balancing act with the key decision being to ensure a balance between contributions and investment returns; and
· That the Fund’s strategy aims to reflect the different characteristics of different employers in determining their contribution rates. Which requires the Fund having a clear and transparent strategy to demonstrate how each employer can best meet its own liabilities over future years.
As a result of discussions on the report the Committee RESOLVED to
· Note the content of this report;
· Note and agree the assumptions and methodology proposed by the Actuary to determine the actuarial funding level and standardised employer contribution rate;
· Approve the Funding Strategy Statement (FSS) principles and delegate to the Corporate Director of Resources the employer consultation and resulting changes to the FSS and other changes from further communication with the actuary; and
· Note that a final FSS will be presented to the Committee at the 19 March 2020 meeting.