Agenda item
Triennial Valuation
- Meeting of Pensions Committee, Thursday, 18th June, 2020 6.00 p.m. (Item 5.2)
- View the background to item 5.2
Minutes:
Mr Barry Dodds, from Hymans Robertson presented the Triennial Valuation report. He said the valuation report had been discussed at previous meetings of the Committee. He explained a valuation process is gone through every three years, to establish the appropriate contributions rates for all the employers within the Fund. The main employer in the Fund is the Council who represents the majority of the liability and assets for the fund, but increasingly there are new employers such as contractors and academies who also need to make contributions. Mr Dodds said the valuation is to check the overall health of the fund i.e. the solvency levels of the fund. Mr Dodds said that at previous meetings the assumptions used and how these relate to the funding strategy statement had been discussed, and as such this valuation report was a report to note, in that the regulations required submission of the valuation to occur by the end of March 2020.
Mr Dodds went through the report explaining how the valuation report had been derived at and referred members to various pages within the report. In particular, the graph at page 41 and table on page 42 of the agenda. He said the graph showed the differing funding levels that one would have, based on different assumption levels. Mr Dodds referred Members to pages 54 and 55 which gave a breakdown of each employers’ contribution and said that prior to the report being finalised, the impact of COVID-19 was also taken into consideration. Mr Dodds said it was decided that because the employers involved were long-term employers, a knee-jerk reaction wasn’t required in terms of contribution rates and therefore further changes to the valuation report were not made, other than to say COVID-19 had been considered. He referred members to page 56, point 6 of the report.
Mr Dodds also referred to the Funding Strategy Statement that was attached to the supplement agenda. He said the Funding Strategy Statement set out how each employer would be treated during the membership of the fund. He said the McCloud judgement, which dealt with age discrimination would lead to retrospective changes being made to the LGPS scheme. Mr Dodds referred Members to the table on page 34 of the supplement agenda which showed the ‘likelihood of achieving the target’ and said in view of the judgement a buffer had been created to deal with any adjustments that would need to be made.
In response to questions from Members the following was noted:
· Councillor Wood said it was fantastic that £339M had been achieved in investment returns and wondered if this was due to decisions made by the Committee and Board or the rising markets. He asked Hymans if they had achieved this success with other clients and funds it administered? Mr Dodds responded stating that Hymans advised about 6-7 LGPS schemes and each had seen a 20-30% jump in investment returns. He said the Council’s LGPS had achieved 35%, so it was quite an achievement.
The Committee RESOLVED to:
1. Note the whole Fund and individual employer valuation results as set out in Appendix 1;
2. Note the final Funding Strategy Statement as set out in Appendix 2; and
3. Note and adopt the actuarial valuation report and results which were signed by the actuary on 31st March 2020.
Supporting documents:
- Triennial Valuation, item 5.2 PDF 286 KB
- Triennial Valuation Results, item 5.2 PDF 1 MB
- Funding Strategy Statement, item 5.2 PDF 540 KB