Venue: Council Chamber - County Hall. View directions
Contact: Lisa Richards 01597 826371
Note: Joint with Pensions and Investment Committee
To receive apologies for absence.
Apologies for absence were received from County Councillors
DECLARATIONS OF INTEREST
To receive declarations of interest from Members.
There were no declarations of interest.
DISCLOSURE OF PARTY WHIPS
To receive disclosures of prohibited party whips which a Member has been given in relation to the meeting in accordance with Section 78(3) of the Local Government Measure 2011.
(NB: Members are reminded that under Section 78 Members having been given a prohibited party whip cannot vote on a matter before the Committee.)
There were no disclosures of party whips.
Discussion with the Actuary
The Joint Meeting received a presentation on the process of a Pension Fund Triennial Actuarial Valuation.
· It is a collaborative process. Quarterly updates are provided by the Actuary. There are initial discussions regarding assumptions and calculations once data has been received.
· The last Valuation was completed on 31 March 2016. New Employer contribution rates took effect from 1 April 2017. The next Valuation will take place on 31 March 2019 and Employer contribution rates will take effect from1 April 2020 and apply for three years.
· The process is a requirement under the Pension Scheme Regulations
· One of the preferred outcomes of a valuation is to maintain stable Employer contribution rates
· Each Employer within the Fund has a separate contribution rate calculated by the Actuary following a valuation.
· There had been an increase in contribution rates in 2016. A fall in the expected future return on assets led to an increase in contribution rates.
· There had been concerns that the Authority seemed to be constantly trying to catch up with the deficit. Contributions, which appeared to remain static at £6M.
· Deficit contributions can be expressed differently but have always risen in line with expected pay inflation
· The deficit remains the same but assets and liabilities are increasing.
· The recovery period in for Powys County Council in 2013 was 25 years, in 2016 was 22 years
· The Actuary has some flexibility to adjust the recovery period but would not want to see it extended
· In years when good returns are received, these can be used to offset poor years
· There is some discussion regarding contribution rates to enable pressures on the Council to be balanced – it is essential to take a long term view. The Actuary would only sign off the Valuation if they were comfortable with the content and the resulting contribution rates payable
· The Chair of Audit asked for an outline of the process within the Council – the Pension Fund has separate status to Powys County Council but the Section 151 Officer still has a significant role in balancing the requirements of the Fund and duties to current and future pensioners with affordability. This falls outside political debate. Details are contained within budget papers.
· The Chair of the Pensions Board reminded the meeting that there were other employers within the Fund.
· The Actuary agreed that there was now more oversight than three had been previously. Considerations are similar but the weighting has been altered. Regulations had also been changed.
· The Discount Rate had fallen leading to an increase in the contribution rate. At the last Valuation, a discount rate of 4.4% had been used – if the Fund were to be valued today, what rate would be used? The Actuary estimated that this could be between 4 and 4.2%.
· There have been good returns on assets during the period. It is unlikely that this excellent performance can be sustained due to the nature of investment cycles.
· It was also noted that quantitative easing had supported equity and ... view the full minutes text for item 4.