Agenda item

A report providing an update on the latest Scheme, Legal, Regulatory and Fund developments for the Board’s information.

Andy Cunningham, Head of Pension Administration and Relations, presented a report on the latest Scheme, Legal, Regulatory and Fund developments for the Board’s information.

The three main areas of focus were; reforms to public sector exit payments, cost cap mechanism and the McCloud case, and the Good Governance Project.

Following a consultation on reforms to public sector exit payments in 2019, HM Treasury recently responded confirming that they were going ahead as originally planned. The Scheme Advisory Board had been involved with the working group and were starting to get some insight on the reforms. As this was a change to primary legislation, there would be a need to change the secondary legislation such as the LGPS regulations. No action would be taken until further details were available.

The changes to the Scheme relating to McCloud and the cost cap mechanism were discussed. The McCloud consultation, specifically related to the LGPS, was live and due to close in October. The details of the consultation were in line with officer expectations and officers have put in place an internal project team to analyse the likely resourcing needs and administrative impact of the final legislation, looking at what actions could be taken now and later.

From the cost perspective and based on estimates from the actuary at a national level, it was commented that there were not any significant changes or concerns. Contribution rates would be looked at during the next valuation as there would not be any material financial impact on the funding level at present.

The cost cap mechanism had previously been postponed due to the McCloud case, now that the McCloud case has progressed, the cost cap would be looked at again. Officers would monitor the review as it could result in Scheme changes.

There were no specific updates regarding the Fund’s COVID-19 response and it was noted that it was continuing for the most part as business as usual.

The Local Pension Board (LPB) and Wiltshire Pension Fund Committee (WPFC) Terms of Reference (ToR) were approved at the Full Council meeting on 21 July 2020. The ToR and Governance Compliance Statement for the Investment Sub-Committee (ISC) were in the process of being reviewed.

Officers had set themselves a target to issue 99% of benefit statements by the end of year (from 95% last year). This was unlikely to be achieved and instead a figure of 96-98% was expected.

A review of the employer ill health insurance policy would be taking place, looking at an alternative way to provide similar cover, which is more cost effective for employers. Work

was being done with the actuary and a proposal would be brought back to Committee.

In response to a question from the Board regarding McCloud and refining the numbers to downgrade the risk in the register, it was noted that the administrative impacts were more significant than the financial. However, the financial impact was dependant on a lot of future unknowns such as salary increases which was based on actuary assumptions and therefore uncertain. It was stated that once the administrative impacts had been fully analysed and further information available then the risk could be reviewed again.

Resolved

To note the scheme, legal, regulatory and Fund update.