TAYSIDE PENSION FUND PENSION FORUM

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PARTICIPATING BODIES FORUM
 THURSDAY 30TH OCTOBER 2014
Programme of Events
 Welcome – Bailie Willie Sawers, Chairperson of Tayside Pension Fund
Sub-Committee
 Investment Manager Review – Tracey Russell, Financial Services &
Investment Manager, Dundee City Council
 Global Economic Outlook – Steven Boyle, Director of Economics, Royal
Bank of Scotland
 Actuarial Triennial Valuation – Graeme Muir, Head of Public Sector,
Barnett Waddingham
 New LGPS Scheme and Governance – Karen McWilliam, Head of Public
Sector Benefits Consultancy, AON Hewitt
 LGPS Administration Update – Alan Mooney, Payroll & Pensions
Manager, Dundee City council
 Questions
Investment Manager Review
Tracey Russell
Financial Services & Investment Manager
Current Asset Allocation & Manager Selection
30%
Alternatives
25%
6%
Property
20%
% of Fund
Fixed Income
15%
Equities (Passive)
24%
21%
10%
Equities (Active)
15%
12%
10%
5%
12%
0%
Baillie
Gifford
Fidelity
Alliance
Bernstein
Legal &
General
(Passive)
Goldman
Sachs
Investment Manager
Schroders
M&G
Individual Manager 5 Year Rate of Return Versus Benchmark
Investment Manager
Portfolio Return
Benchmark
Excess Return
Alliance Bernstein
13.40
14.45
-1.05
Baillie Gifford
16.95
14.30
2.65
Fidelity Equity Fund
13.30
11.92
1.38
Fidelity Bond fund
9.87
7.99
1.88
Goldman Sachs
8.82
7.69
1.13
Schroders
7.43
9.46
-2.03
Overall
7.27
7.23
0.04
Equities
Fixed Income
Property
Tayside Pension Fund Asset Value
Over The Years
Events of Previous Year
 Appointment of Investment Consultants – AON Hewitt
(effective 1/10/13)
 Transition of 10% of fund to Passive Global Equity Manager –
LGIM (transfer of approx £230m value 31/10/13)
 Triennial Actuarial Valuation 31/3/14
 2 x Investment Manager fee reductions successfully negotiated
 Employer Consultation on Tobacco Investment (motion passed
27/10/14)
 Consultation on new governance requirements (effective
31/3/15)
Employer Consultation On Tobacco
Investment
 16 responses from employers
 9 advised that they supported a decision to disinvest but only with
suitable alternative
 27/10/14 – Motion passed at TPF Investment Sub-Committee:
“Tayside Pension Fund, through each of it’s Fund Managers, should
keep the issue of alternative investments to tobacco under constant
review and that, as soon as a Fund Manager identifies other
investments which would provide satisfactory returns without
materially affecting the volatility of risk and return or impacting on
current investment benchmarks the Fund Managers should reduce
the Fund’s investment in tobacco, the Fund’s aim being to disinvest
from tobacco stocks, where investment circumstances permit“
New Governance Arrangements –
Local Pension Formation Plan
 Current consultation on Draft Regulations (11/11/14)
 Discussions with Trade Unions regarding nomination of
representatives (Oct 14)
 Report to Policy & Resources (Dec 14)
 Nomination of Local Government Employer
Representatives (Jan 15)
 Required changes to constitution of existing Investment
Sub-Committee (Feb 15)
 Constitution and terms agreed (Feb 15)
 Training plan (Mar 15)
What’s Planned For Next Year
 Implementation of New Scheme and Regulations
 Formation of Local Pension Board
 Strategic Review of Asset Allocation and Policy based on
triennial valuation outcome
 Custodian Procurement Exercise
 Evolution of Fixed Income Mandates
GLOBAL ECONOMIC OUTLOOK
STEVEN BOYLE
DIRECTOR OF ECONOMICS
ROYAL BANK OF SCOTLAND
Tayside Pension Funds
2014 Actuarial Valuation – Main Fund
[email protected]
October 2014
Agenda
Purpose of the valuation
How do we do it?
Funding models and assumptions
Valuation Data
Results
Any questions?
1
Purpose of valuations
Approach depends
on question being
asked
2
• Many questions!
Ongoing triennial
funding valuation
• How much do employers need to pay in future to have
enough assets to pay benefits?
Annual accounting
valuations
(IAS19/FRS17)
• Help accountants compare
• If we were a plc how much would we need to borrow to
finance liabilities?
Cessation
valuations
• Have we enough assets to meet liabilities?
• How much risk do we leave on the table?
• Different approaches depending on employer situation
Triennial Funding Valuation
Set out in LGPS
Regulations
3
• to certify levels of employer
contributions to secure the
solvency of the Fund
Also have to look at
Funding Strategy
Statement
• As determined by
administering authority
• With some actuarial help!
Actuary to “have
regard to desirability
of maintaining as
stable a contribution
rate as possible”
• Function of Funding Model /
investment strategy
• Spreading and stepping
How do we do it?
4
Step 1
Step 2
Step 3
• Projection of all possible
benefit payments for each
member
• Attach probabilities to
each possible payment to
get “expected” payments
• Discount “expected”
payments to obtain
“value”
How do we do it?
Step 1
Step 2
Step 3
• Projection of all possible
benefit payments for each
member
• Attach probabilities to
each possible payment to
get “expected” payments
• Discount “expected”
payments to obtain
“value”
Total cashflows c£8bn
5
How do we do it?
Step 1
Step 2
Step 3
• Projection of all possible
benefit payments for each
member
• Attach probabilities to
each possible payment to
get “expected” payments
• Discount “expected”
payments to obtain
“value”
Total cashflows c£8bn
6
How do we do it?
Look at accrued benefits and future benefits separately
Past Service
• Compare assets with value of accrued benefits
Future Service
• Determine contribution required to meet value of annual accrual of
benefits
Calculations completed at
• Whole fund level for contribution purposes
• At individual employer level for accounting purposes
7
Assumptions
Price
Inflation
(RPI)
• Usually
difference
between fixed
interest and
index linked
gilts
• CPI adjustment
required
8
Salary
Increases
Statistical
assumptions
Discount
rates
• Long term 1%
pa more than
price inflation
• Investigate
past
experience
• Depends on
purpose and
objectives of
valuation
• CPI in short
term
• Use standard
tables
• Adjust for
actual
experience
Discount Rates
Choice of discount rate depends on the question being
asked
Funding valuation
• What contributions are required to build up a fund of assets to meet
pension liabilities for a given investment strategy?
Accounting valuation
• How much would a corporate body need to borrow to finance their
pension liabilities?
Cessation valuation
• How much cash would we need to fully “de-risk” liabilities?
9
Discount Rates
Accounting valuation
• Corporate bond yields / cost of borrowing
Minimum risk cessation
• Gilt yields
Ongoing funding valuation
• Expected future investment returns from actual investment strategy
Gilts and bonds – easy….
• Redemption yields
Equities – less easy….
• Fixed risk premium over gilts (Gilt + model)
• Economic model (BW model)
Property/alternatives – keep it simple
• Somewhere between equities and gilts
10
Discount Rates / Equity Returns
Gilt Plus models
“Risk based” approach based on alleged tPR approach
• Doesn’t apply to LGPS!
Value liabilities on minimum risk gilts basis
•
•
•
•
Increase risk factor via fixed risk premium
Discount rate then gilts plus something
Based on asset strategy and employer covenant
Seems quite sensible and nice and simple
But liability values then behave like gilts
• Potential for lots of volatility
• Equities and gilts not well correlated especially in short term
Problems with quantitative easing
• BoE making pensions “more expensive”
• Government taking an interest
11
Discount Rates / Equity Returns
Our economic model
• Been using and developing for 15 years
• Specifically designed for LGPS
Assumes equity returns function of
• Dividend income plus
• Economic/dividend growth
Valuation results assessed over 6 month period spanning
valuation date
• Essentially some smoothing
• Helps meet stability objective
More complex model
• But more robust and stable valuation results
12
Change in Average LGPS Employer Contribution
13
Change in Average LGPS Employer Contribution
14
Change in Average LGPS Employer Contribution
15
Valuation Data - Liabilities
Key Stats
2014
%
2011
%
Average Age
Average
Retirem ent Age
Actives
17,634
43%
17,950
47%
46.4
62.6
Deferred Members
10,293
25%
8,738
23%
45.4
62.3
Pensioners
13,123
32%
11,862
31%
70.5
Total Mem bers
41,050
100%
38,550
100%
Actual Pay/Pensions
£ (000)
£ (000)
% Change
Actives
351,659
356,401
(1%)
Pensioners
66,489
53,383
25%
£
£
% Change
Actives
19,942
19,855
0%
Pensioners
5,067
4,500
13%
Num ber of Mem bers
Average Pay/Pensions
16
This Valuation
Assets and Fund Accounts
Revenue Accounts
Year to
March 2014 March 2013 March 2012
TOTAL
£ (000)
£ (000)
£ (000)
£ (000)
Retirement Pensions
64,283
60,522
55,487
180,292
Retirement Lump Sums
17,650
17,478
19,929
55,057
Death Benefits
2,215
2,173
2,573
6,961
Leavers benefits
4,741
3,410
4,898
13,049
Expenses
1,220
1,198
1,257
3,675
-
-
-
-
Total
90,109
84,781
84,144
259,034
Employees Ctbns
22,364
22,029
22,340
66,733
Employers Ctbns
67,620
66,961
69,787
204,368
Transfer Values
3,762
4,216
2,497
10,475
-
-
-
-
93,746
93,206
94,624
281,576
New money for investment
3,637
8,425
10,480
22,542
Investment Income
50,704
46,035
43,007
139,746
2,262,275
1,959,058
1,908,628
1,908,628
Cashflow
54,341
54,460
53,487
162,288
Change in value
146,447
248,757
(3,057)
392,147
2,463,063
2,262,275
1,959,058
2,463,063
8.7%
15.0%
2.1%
8.5%
Expenditure
Other Expenditure
Non-investment income
Other Income
Total
Fund Value
Assets at Start of Year
Assets at End of Year
Annual Returns
Approx Rate of Return (per annum)
17
Intervaluation Experience
Intervaluation Experience
Actual
Expected
Investm ent Return
8.5% pa
6.3% pa
Pay Increases**
1.8% pa
3.3% pa
Pension Increases
3.4% pa
3.0% pa
1,321
916
£5k
£4k
Deaths
Pension Ceasing
** includes short term overlay
18
Intervaluation Experience
Intervaluation Experience
Actual
Expected
Investm ent Return
8.5% pa
6.3% pa
Pay Increases**
1.8% pa
3.3% pa
Pension Increases
3.4% pa
3.0% pa
1,321
916
£5k
£4k
Deaths
Pension Ceasing
** includes short term overlay
19
Intervaluation Experience
Intervaluation Experience
Actual
Expected
Investm ent Return
8.5% pa
6.3% pa
Pay Increases**
1.8% pa
3.3% pa
Pension Increases
3.4% pa
3.0% pa
1,321
916
£5k
£4k
Deaths
Pension Ceasing
** includes short term overlay
20
Intervaluation Experience
Intervaluation Experience
Actual
Expected
Investm ent Return
8.5% pa
6.3% pa
Pay Increases**
1.8% pa
3.3% pa
Pension Increases
3.4% pa
3.0% pa
1,321
916
£5k
£4k
Deaths
Pension Ceasing
** includes short term overlay
21
Intervaluation Experience
Intervaluation Experience
Actual
Expected
Investm ent Return
8.5% pa
6.3% pa
Pay Increases**
1.8% pa
3.3% pa
Pension Increases
3.4% pa
3.0% pa
1,321
916
£5k
£4k
Deaths
Pension Ceasing
** includes short term overlay
22
Intervaluation Experience
Intervaluation Experience
Actual
Expected
Investm ent Return
8.5% pa
6.3% pa
Pay Increases**
1.8% pa
3.3% pa
Pension Increases
3.4% pa
3.0% pa
1,321
916
£5k
£4k
Deaths
Pension Ceasing
** includes short term overlay
23
Intervaluation Experience
Intervaluation Experience
Actual
Expected
Investm ent Return
8.5% pa
6.3% pa
Pay Increases**
1.8% pa
3.3% pa
Pension Increases
3.4% pa
3.0% pa
1,321
916
£5k
£4k
Deaths
Pension Ceasing
** includes short term overlay
24
Intervaluation Experience
Intervaluation Experience
Actual
Expected
Investm ent Return
8.5% pa
6.3% pa
Pay Increases**
1.8% pa
3.3% pa
Pension Increases
3.4% pa
3.0% pa
1,321
916
£5k
£4k
Deaths
Pension Ceasing
** includes short term overlay
25
Intervaluation Experience
Intervaluation Experience
Actual
Expected
Investm ent Return
8.5% pa
6.3% pa
Pay Increases**
1.8% pa
3.3% pa
Pension Increases
3.4% pa
3.0% pa
Deaths
1,321
916
Pension Ceasing
£5.2m
£4.3m
** includes short term overlay
26
Intervaluation Experience
Intervaluation Experience
Actual
Expected
Investm ent Return
8.5% pa
6.3% pa
Pay Increases**
1.8% pa
3.3% pa
Pension Increases
3.4% pa
3.0% pa
Deaths
1,321
916
Pension Ceasing
£5.2m
£4.3m
** includes short term overlay
27
Intervaluation Experience
Intervaluation Experience
Actual
Expected
Investm ent Return
8.5% pa
6.3% pa
Pay Increases**
1.8% pa
3.3% pa
Pension Increases
3.4% pa
3.0% pa
Deaths
1,321
916
Pension Ceasing
£5.2m
£4.3m
** includes short term overlay
28
2014 Valuation Results
“Actuarial experience”
• Actual returns, inflation
• Actual mortality etc.
Changes in assumptions
• Changes in discount rates, inflation etc. due to
changes in market conditions
• “De-risked” discount rate and set up 5% volatility
reserve
• Revised mortality assumptions to better reflect
recent experience
Allow for LGPS 2015
• New career average structure
29
2014 Valuation Results
“Actuarial experience”
• Actual returns, inflation
• Actual mortality etc.
Changes in assumptions
• Changes in discount rates, inflation etc. due to
changes in market conditions
• “De-risked” discount rate and set up 5% volatility
reserve
• Revised mortality assumptions to better reflect
recent experience
Allow for LGPS 2015
• New career average structure
30
2014 Valuation Results
“Actuarial experience”
• Actual returns
• Actual mortality etc.
Changes in assumptions
• Changes in discount rates, inflation etc. due to
changes in market conditions
• “De-risked” discount rate and set up 5% volatility
reserve
• Revised mortality assumptions to better reflect
recent experience
Allow for LGPS 2015
• New career average structure
31
2014 Valuation Results
Have “de-risked” funding strategy and reserved 5%
volatility reserve
• Reduced likelihood of bad news in future
Funding Level still up from 98% to 100%
Employer Contributions down from 18% to 17% of
payroll
32
2014 Valuation Results
Have “de-risked” funding strategy and reserved 5%
volatility reserve
• Reduced likelihood of bad news in future
Funding Level still up from 98% to close to 100%
Employer Contributions down from 18% to 17% of
payroll
33
2014 Valuation Results
Have “de-risked” funding strategy and reserved 5%
volatility reserve
• Reduced likelihood of bad news in future
Funding Level still up from 98% to close to 100%
Planning to trim employer contributions by 1% of
payroll
34
Questions please!
35
Tayside Pension Fund
The New LGPS Scheme and Governance
Arrangements
Karen McWilliam
30 October 2014
Prepared by Karen McWilliam
Consulting
Presentation to Tayside Pension Fund Forum for Participating Employers
How it all began….
I have a
dream
…
Consulting | Retirement
October 2014
27
recommendations
53
The Public Service Pensions Act


Made on 25 April 2013
Key elements
–
–
–
–

New public sector pension schemes
Key design elements
Cost sharing mechanism to cap employer costs
Independent oversight role of the appropriateness of valuations and
employer contribution rates
– "Scheme Managers" and "Pension Boards"
– Extending the Pensions Regulator’s (“tPR") role
– Scheme Advisory Board (national)
Timescales
– In accordance with HMT Directions and scheme specific regulations
– By 1 April 2015 at the latest
Consulting | Retirement
October 2014
54
LGPS2015
Consulting | Retirement
October 2014
55
LGPS 2015 – the key changes at a glance
Pre 2009
Basis of Pension
Accrual Rate
LGPS 2009
Career Average Revalued Earnings
(CARE)
Final Salary
1/80th (plus
3/80ths cash)
LGPS 2015
1/60th
1/49th
Revaluation Rate
Based on final year’s salary
Consumer Prices Index (CPI)
Pensionable Pay
Pay excluding non-contractual overtime
+ non-pensionable additional hours.
Pay excluding non-contractual overtime.
If P/T, additional hours to FTE now
pensionable.
Contributions
Normal
Retirement Age
6% (5% for
some)
Tiered – moving to actual pay
65
Equal to the individual’s State Pension
Age (underpin if within 10 years of NPA at
1/4/12)
65 (+Rule of 85
until 2006)
Voluntary (Early)
Retirement
50% Benefits for
50%
Consulting | Retirement
Contributions
October 2014
Tiered - 5.5% - 12%
60+
Not available
55+
Not available
56
Optional
The basics of the CARE scheme
 Example
Scheme Year
Actual
Pay
Cost of Living
Adjustment
1
1 April 2015 to
31 March 2016
£24,500
3%
2
1 April 2016 to
31 March 2017
£25,333
3.1%
…In main section of the scheme
Consulting | Retirement
October 2014
57
The basics of the CARE scheme
 Example - continued
Scheme Opening
Year
Balance
1
2
Consulting | Retirement
October 2014
Pension
Build up
in year
Total
Cost of
Updated
Account
living
Total
31 March adjustment Account
£0
£24,500/4
9
= £500
£500
3% = £15
£515
£515
£25,333/4
9
= £517
£1032
3.1% = £32
£1,064
58
A more realistic example
Consulting | Retirement
October 2014
Date of Birth
1 April 1963
Joined the Scheme
1 April 1991
Retires
31 March 2020 (age 57 – no
employer consent)
Pay (new scheme)
From £32,334 to £35,000
Revaluation Orders
Final Pay (old
scheme)
3% each year
59
£35,000
John’s Pension Benefits
Membership up
to 31 March 2009
Pension
Lump
Sum
18 x £35,000 / 80
= £7,875
+
Membership from
1 April 2009 to
31 March 2015
Membership from 1
April 2015
6 x £35,000 / 60
= £3,500
5 Years of 1/49 x
£32,334 to £35,000 =
£660 to £714 (basic)
Revalued Total =
£3,751
3 x £7,875 =
£23,625
Consulting | Retirement
October 2014
£0
60
+
£0
John’s Pension Benefits
Normal
Pension
Age
Pension
Lump
Sum
Membership up
to 31 March 2009
Membership from
1 April 2009 to
31 March 2015
Membership from 1
April 2015
R85 = 55 but
reduce to age 60
65
67
6 x £35,000 / 60
= £3,500
Less 36%
= £2,240
5 Years of 1/49 x
£32,334 to £35,000 =
£660 to £714 (basic)
Revalued Total =
£3,751
Less 42%
=£2,176
18 x £35,000 / 80
= £7,875
Less 16%
= £6,615
+
3 x £7,875 =
£23,625
Less 8%
= £21,735
Consulting | Retirement
October 2014
£0
61
+
£0
Consulting | Retirement
October 2014
62
Governance changes
Consulting | Retirement
October 2014
63
Current governance structure
 “*Scheme regulations …must provide for a person to be responsible for
*Source – Public Service Pensions Act
managing or administering …called the scheme manager”
2013
Scheme Manager = Administering Authority
= Dundee City Council
Delegated Management (Decision Making)
Policy & Resource Committee
Pension Investment SubCommittee
Director of Corporate Services
Consulting | Retirement
October 2014
64
64
6 DCC elected members
3 employee observers
Pensions Board in PSPA


“Scheme regulations… must provide for the establishment of a board… for
assisting the scheme manager… in… the following matters.
– …securing compliance with… regulations relating to the governance and
administration…
– and with requirements… by the Pension Regulator
– …such other matters… regulations may specify
Must not have a conflict of interest

Must have employer representatives and member representatives in equal
numbers

Must be conversant with the rules of the scheme and any document recording
policy about the administration of the scheme.

Must have knowledge and understanding of the law relating to pensions and
such other matters as may be prescribed.”
Source – Public Service Pensions Act 2013
Consulting | Retirement
October 2014
65
Draft Scottish LGPS Regulations

Representatives – at least:
– 4+ trade union reps
– 4+ local government employer reps
– Must not have a conflict of interest


Chair – rotated on an annual basis (Admin Authority & trade unions)
2 joint secretaries


– Administering Authority
– trade unions
Advisers/observers – not members
Model constitution being developed

Training Plan must be put in place (for PC and PB)
Consulting | Retirement
October 2014
66
The future….

“Normal practice to meet at the same place and same time as Pensions
Committee”

Chair of Pensions Committee will act as chair to both meetings
Scheme Manager = Administering Authority
= Dundee City Council
Delegated Management (Decision
Making)
Assisting with Securing Compliance
& Other Matters
New Pension Board
Pension Investment SubCommittee(?)
TU reps
LG Employer
reps
=
2 distinct entities but 1 joint meeting
Key:
Consulting | Retirement
October 2014
Decision maker
67
Assistance
Matters they may consider

The pension board may consider any matter relevant to the Pensions
Committee, including:





Reports produced for the pensions committee
The fund annual report
External voting and engagement provisions (of the Pensions Committee)
Fund performance and administration
Actuarial reports and valuations

Funding policy

Monitor investments, investment principles, strategies and guidance which
apply

May ask for a report on any aspect of the fund
Consulting | Retirement
October 2014
68
Disagreements


If at least half of the Pension Board agree AND
If any of the following apply:
–
–
–
–
–
concern over evidence or information
decision considered illegal or contrary to regulations
decision contrary to a tPR Code of Practice
not in the interest of financial viability of the Scheme
not proper and responsible administration

Then can be referred back to Pensions Committee for review


If no agreement, joint report on website and annual report
Potential to escalate to Scheme Advisory Board to consider
Consulting | Retirement
October 2014
69
Establishing the Tayside Pension Board

 DCC – Policy and resources Committee (Dec 2015)
XX
 Consider
options
 Regulations laid
X

 Secure appointments X

 Develop constitution
X

 Develop training plan

 Induction training


X
X
Regulations effective 1 April 2015
Deadline
…...but some (or
all?) work before
then
1/4/15
Consulting | Retirement
October 2014
70
Scheme Advisory Board (SAB)


The Board provides:
• advice to Scottish Ministers (at their request) on the desirability of
changes to the scheme.
• advice (on request or otherwise) to the Administering Authorities or the
Pension Boards in relation to effective and efficient administration and
management
Recipient of advice must have regard to the advice of the Board
Made up of:
 7 local government employer reps
 7 trade union reps
 Advisers permitted

Chair – from members of SAB or independent
Consulting | Retirement
October 2014
71
The Pensions Regulator…
Educate, Enable and Enforce
Consulting | Retirement
October 2014
72
The Pension Regulator’s extended role
Legislative powers
Code of Practice to be issued (minimum)
Examples of areas covered:
Reporting breaches and late payment of employer contributions
-
Pension Board conflicts
Knowledge and understanding – Pension Boards
-
Pension Board representation
Internal controls
-
Pension Board knowledge
Disclosure of information
-
Record keeping
Failure by employers to pay employee contributions
-
Internal controls
Internal dispute resolution
Improvement notices
Conflicts of interest and representation
Appointment of a skilled person
Publication of information
Information about benefits
Record keeping
Expected late 2014
Code
Initial Challenge
Ongoing Challenge
Knowledge and
understanding
Conflicts of interest
Records
Internal controls
Less challenging
Consulting | Retirement
October 2014
More challenging
73
Any questions?
Karen McWilliam
Head of Public Sector Benefits
Consultancy
07711 016707
[email protected]
Consulting | Retirement
October 2014
74
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To protect the confidential and proprietary information included in this material, it may not
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Consulting | Retirement
October 2014
75
TAYSIDE PENSION FUND FORUM
LGPS ADMINISTRATION UPDATE
ALAN MOONEY
PAYROLL & PENSIONS MANAGER
TAYSIDE PENSION FUND FORUM
CURRENT POSITION ON CHANGES BEING IMPLEMENTED BY THE ADMINISTERING AUTHORITY
•
NEW SELF-SERVICE FUNCTIONALITY TO BE AVAILABLE DURING 2014 FOR:
Employers
Active/Deferred Members
Pensioner Members
Currently at Tender Evaluation stage – Implementation stage commences January 2015
•
INTRODUCTION OF A NEW LOCAL GOVERNMENT PENSION SCHEME FROM APRIL 2015
•
TRANSFER OF THE POLICE PENSION SCHEMES TO THE SPPA* IN APRIL 2015
Transfer scheduled to take place in November 2014
•
TRANSFER OF THE FIREFIGHTERS’ PENSION SCHEMES TO THE SPPA* IN APRIL 2015
Transfer scheduled to take place in November 2014
* SPPA = Scottish Public Pensions Agency
TAYSIDE PENSION FUND FORUM
INTRODUCTION OF EMPLOYER SELF-SERVICE
EMPLOYERS WILL:
•
Provide monthly returns to the Administering Authority in an electronic format
•
View details of the information that they have supplied to the Administering Authority
TAYSIDE PENSION FUND FORUM
INTRODUCTION OF SELF-SERVICE FOR ACTIVE/DEFERRED MEMBERS
ACTIVE/DEFERRED MEMBERS WILL:
•
Record changes to their personal details and view their details on-line
•
Complete pension forms on-line
•
View/print their Annual Benefit Statements
•
Calculate their projected pension benefits based on ‘what if’ scenarios
•
Access various pension publications
TAYSIDE PENSION FUND FORUM
INTRODUCTION OF SELF-SERVICE FOR PENSIONER MEMBERS
PENSIONER MEMBERS WILL:
•
Record changes to their personal details and view their details on-line
•
Complete pension forms on-line
•
View their full monthly payslip history
•
Access various pension publications
TAYSIDE PENSION FUND FORUM
CHANGES TO THE LOCAL GOVERNMENT PENSION SCHEME FROM APRIL 2015
LGPS SCOTLAND 2015
LGPS SCOTLAND 2008
•
Final Salary scheme
•
‘CARE’ Scheme
•
Normal Pension Age of 65
•
Normal Pension Age aligned to
employee’s State Pension Age
•
Accrual Rate of 1/60th
•
Accrual Rate of 1/49th
•
Tiered Contribution Rate
•
Tiered Contribution Rate
•
Full-time Equivalent Earnings
•
Actual Earnings
•
No Contributions Flexibility
•
50/50 Contributions Option
‘CARE’ = Career Average Re-valuation of Earnings
TAYSIDE PENSION FUND FORUM
DEVELOPMENTS WHICH HAVE BEEN IMPLEMENTED SINCE THE LAST FORUM
•
All employers have been offered free training in the new Local Government Pension
Scheme 2015.
•
All employers now have to complete a standard monthly return to the Tayside
Pension Fund detailing the pension contributions that have been remitted.
•
A pensions contributions ‘tracker’ has been introduced which allows full details of all
pension contributions remitted each month to be monitored. This ‘tracker’ will assist
in the reconciliation of the annual returns submitted by each employer.
•
A new logo and Pension Focus newsletter has been introduced and work has
commenced in reviewing the standard letters issued by the Tayside Pension Fund.
TAYSIDE PENSION FUND FORUM
CHALLENGES CURRENTLY BEING FACED BY THE TAYSIDE PENSION FUND
The number of records being administered by the Tayside Pension Fund continues to
increase.
Detailed below is a table which illustrates the composition of the LGPS scheme
membership:
2014
2011
2008
Active Members
17704
17950
19024
Pensioners
13555
11862
10510
Deferred Members
10392
8738
7067
TOTAL
41651
38550
36601
TAYSIDE PENSION FUND FORUM
OTHER CHANGES WHICH WILL BE IMPLEMENTED FROM APRIL 2015
ALL EMPLOYERS & TAYSIDE PENSION FUND
•
The implementation of the new Local Government Pension Scheme 2015.
•
Capture of all data from employers in an electronic format.
•
Scheme members will be able to view and update their pension records on-line.
TAYSIDE PENSION FUND
•
The payment of pensions will transfer to the Payroll Team which will enable pensions
staff to concentrate on the actual administration of pensions.
•
With the implementation of ‘self-service’ functionality, there will be a reduction in a
number of existing paper-based processes.
TAYSIDE PENSION FUND FORUM
OTHER CHANGES WHICH WILL BE IMPLEMENTED FROM APRIL 2015
ALL EMPLOYERS
•
Employers will be required to pay full pension contributions during periods of paid
Parental Leave (Maternity/Paternity/Adoption).
•
Employers will be required to pay full pension contributions during periods of sickness
absence whether paid or unpaid.
•
Where an employee elects to receive a refund of their pension contributions within the
first 2 years of pensionable service – the employer will be able to offset the value of the
employer contributions relating to that refund against their pension contributions return
for the following month. Currently this only applies where the employee opts-out
during the first 3 months of pensionable service.
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