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Contact: Lisa Richards 01597 826371
Note: Joint with Pensions and Investment Committee
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APOLOGIES To receive apologies for absence. Minutes: Apologies for absence were received from County Councillors |
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DECLARATIONS OF INTEREST To receive declarations of interest from Members. Minutes: There were no declarations of interest. |
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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.)
Minutes: There were no disclosures of party whips. |
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Discussion with the Actuary Minutes: The Joint Meeting received a presentation on the process of a Pension Fund Triennial Actuarial Valuation.
Discussion: · 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. |