Agenda item

The Committee considered a report of the Corporate Director of Resources which briefed the Committee on developments in matters that were both LGPS specific, as well as providing an update on non-LGPS specific matters of interest (for copy see file of Minutes).

Councillor B Kellett noted the points outlined regards the McCloud judgement and separately asked if there had been any interest from the Scheme Advisory Board (SAB) in terms of the LGPS Annual Report. The Head of Pensions (LGPS) noted Members were aware that Pension Fund Statement of Accounts formed part of Local Authority Statements of Accounts and while that had never been any issue for Durham, in some other areas and for other Pension Funds it had proven to be an issue, where those Local Authorities had not completed their Statement of Accounts on time.  He added that therefore consideration was being given as to whether the two should be separated, however, those deliberations were at an early stage.

Councillor M Porter noted the importance of the McCloud judgement and noted the implications would result in a huge piece of work, noting the cost implications and asked as regards process and systems that would be utilised.  The Head of Pensions (LGPS) agreed it would be a substantial piece of work and noted that one element of frustration was that the work would likely benefit a small proportion of scheme members.  He noted that currently data was being pulled together and test loading undertaken but reiterated that it was anticipated there would be very few pensioners/scheme members impacted, though there would only be positive outcomes for those impacted.  Councillor M Porter noted the huge task and the need to obtain external data from other providers.  The Head of Pensions (LGPS) noted one issue had been as a result of GDPR where data relevant to McCloud that did not need to be collected at the time, and indeed could not be collected under the GDPR, had not been obtained since 2014.  He noted that as a result of the McCloud judgement there was a need to identify gaps and go forward from there.  He noted that the range of employers from whom data was required ranged from the largest ones, such as DCC and DBC, right through to much smaller employers.  He noted processing would be ran on a test database initially, then worked on the live data, but reiterated it was a lengthy process.

Councillor J Atkinson noted paragraph 58 referred to LGPS and Sharia compliance and asked for additional information.  The Head of Pensions (LGPS) noted it was an issue the SAB was looking at, though as they were not experts, a Sharia Law Scholar had been appointed to look at the matter.  He added that there was concern that Sharia provisions had meant that many Muslim employees throughout the country had opted out of the LGPS.

Councillor K Early noted the issue was complex and noted similar issues in relation to mortgages and that mechanisms had been developed in these cases.  The Head of Pensions (LGPS) noted that the issue had been driven by scheme members, and there was evidence from other Local Authorities that many Muslim employees had perhaps been opting out of the LGPS.

Councillor J Shuttleworth entered the meeting at 11.00am

The Independent Investment Adviser, Anthony Fletcher noted the issue arose as Islam did not allow for interest on loans or investments and as it was a complex issue it was sensible for SAB to employ a Sharia Scholar to look at the issue, to try and help address the issue of those opting out of the LGPS.

Resolved:

That the information contained in the report be noted