Agenda item

Consideration was given to the report of the Corporate Director, Resources which informed Members of the overall value of the Pension Fund as at 31 March 2015, and of any additional sums available to the Managers for further investment or amounts to be withdrawn from Managers (for copy see file of Minutes).

Councillor Carr noted that dividend income receivable in 2015/2016 was estimated to be £31m but was concerned that employee contributions may decline. Don McLure, Corporate Director, Resources stated that the assumptions were based on the actuarial valuation of 2013 and had been taken into account in the forecasts at that time. The next actuarial valuation was due in March 2016.

Nick Orton, Team Leader Operations and Data/Pensions clarified that dividend income related to income from Assets and contribution income from scheme membership would be expected to decline if employee numbers reduced. However the Council contributed £22m over and above its membership contribution which would safeguard the position.

By way of information Don McLure advised that the Council had agreed to introduce auto-enrolment whereby employees were automatically enrolled in the scheme but could opt out. This reversed the current arrangements where employees decided whether or not to participate in the scheme at the outset. The implementation of auto-enrolment had been delayed until 2017 but evidence in other areas had shown that a significant number of employees who had been auto-enrolled had not opted out. 

Pension Funds across the country would be subject to the same constraints and Philip Williams advised that generally public sector schemes were in a better position than private sector schemes because of their long-term focus. Members could be assured that Durham’s scheme was in an above average position in terms of its solvency.

Councillor Davinson referred to Government consultation on the future structure of Local Government Pension Schemes which included proposals to merge Pension Funds.  Nick Orton informed the Committee of the outcome of the consultation which had determined that Pension Fund mergers should not be pursued and the focus was now on pooled investment vehicles. Consultation was ongoing in relation to this and the final conclusions were awaited.

Resolved:

That the information contained in the report be noted.