Agenda item

The Board considered a report from the Corporate Director of Resources which provided details on developments in matters that were both Local Government Pension Scheme (LGPS) specific, as well as providing an update on non-LGPS specific matters of interest (for copy see file of Minutes). 

The Head of Pensions (LGPS) noted issues referred to included: Managing Risk and Exit Policy, GMP; the Levelling Up White Paper and Edinburgh Reforms.  He noted the Fund’s support for the launch of the North East Regional Investment Fund which met the aims of the Levelling Up agenda ahead of any requirements; adding that Durham was very much ahead of the curve in terms of pooling. 

Councillor A Hopgood asked how low other Funds were in terms of their percentage of pooled funds.  The Head of Pensions (LGPS) explained that some funds had zero pooled funds and that while the Government policy was clear in terms of polling, the legal absolute legal required states that Funds should simply have a plan for pooling in place.  He noted that DLUHC have made clear that intention is that Funds get with the requirement to pool, and statutory guidance may be issued.

The Head of Pensions (LGPS) noted that the approach for Further Education Colleges was subject to expected Department for Education guarantees, therefore a temporary rate had been used in valuation, the same rate as set the last time. The rates will be revisited when there is greater certainty over that guarantee.

The Head of Pensions (LGPS) explained that the Scheme Advisory Board Chair had written to the Department for Levelling Up, Housing and Communities (DLUHC) as regards Pension Fund Accounts being separated out from the main Local Authority Accounts and noted that a Government Working Group was now looking at the matter, with many relevant bodies, such as the Chartered Institute of Public Finance and Accountancy (CIPFA), feeding into the process.

The Head of Pensions (LGPS) noted that following the Government Budget, Annual Allowance would increase from £40,000 to £60,000 and the Lifetime Allowance charge would be abolished from April 2023.  He noted that the Opposition had indicated their intention to rollback the changes if elected.  Councillor A Hopgood noted the arguments for the merits of the changes, however, noted she could see why it may be felt it would not fix the problems intended, in terms of encouraging NHS staff to continue working for longer or coming out of retirement.  The Head of Pensions (LGPS) noted that many in that situation already managed their position carefully and that it would not affect many within the LGPS.

The Head of Pensions (LGPS) noted as regards the background to GMP Rectification and explained that finalised data, as set out in the table at paragraph 26 of the report, was comparatively very good, with no pensioner having an estimated reduction greater than £10.  He noted that any overpayment would be corrected, however, there would be no recovery of any historic overpayments.  In terms of underpayments, he explained that these would also be corrected, however, with arrears and interest calculated at the Bank of England base rate plus one percent.  He noted the agreement of the Pension Fund Committee in terms of the work and approach and added that communications for pensioners was being developed.

Councillor A Hopgood noted the positive figures as set out in the table in terms of the lower numbers of pensioners impacted and the low level of impact and thanked the Team for their work.

The Chair asked as regards the modelling set out at paragraph 25. The Head of Pensions (LGPS) explained half the population had been modelled, and then it was applied to the remaining half, with any non-standard records requiring manually assessing.  The Chair asked if there was associated cost in terms of the communications required to go out to pensioners.  The Head of Pensions (LGPS) noted there was a cost and explained the Council’s software provider, Civica, were helping in terms of the data, though the Fund would have final say on communications issued.

RESOLVED:

That the report be noted.