Agenda item

The minutes were agreed and Members received an update on current matters.

At the Local Authority Pension Fund (LAPF) Investments Awards 2017,

L B Bromley was judged overall winner for LGPS Investment Performance of the Year and was also in the final shortlist for LGPS Fund of the Year (under £2.5 billion).

Reference was also made to a letter at the end of August from the Minister for Local Government concerning the pooling of funds. Some pools had not yet been established and the Government was keen to see more progress in this area. The Government remained committed to the change following the June election and it was necessary for funds to invest in pools with minimum exception. Future procurement would be undertaken through the pool and the expectation from government is that there would be savings on fees and greater opportunities for infrastructure investment.

On procuring Fund Managers for Property and Multi Asset Income Funds (MAIF), seven potential Managers for MAIF were on a long list along with six potential Managers for Property. It was anticipated that the list for both would be shortened nearer to the Sub-Committee’s November and December meetings for Manager selection.

The Chairman had also written to the Minister for Local Government on

16^th August 2017 suggesting proposals on reducing the level of liability falling to Council Taxpayers for the LGPS namely:

·  Reducing the level of employer contributions to the scheme with a corresponding increase in employee contributions (providing savings to compensate for the impact of ongoing austerity and continued reductions in government funding);

·  Addressing problems caused by local providers being unwilling to tender for services due to LGPS pension liabilities – a concern which would be enhanced should the LGPS be expanded under “Fair Deal” proposals; and

·  Government funding a proposed new burden of public service scheme members receiving the full Guaranteed Minimum Pension (GMP) indexation (currently estimated to add an estimated 0.5% of costs to the Council’s pension liabilities, equating to approximately £5.6m for

L B Bromley). 

The Minister‘s response was considered positive referring to the scheme currently being subject to an actuarial valuation by the Government Actuary Department (GAD) to assess the health of the scheme as at 1^st April 2016. A final report would be due in spring 2018. A parallel valuation to be carried out by the Scheme Advisory Board (SAB) would check that overall contributions and their split between employers and employees are fair. On completion of the processes, the Government would look carefully at the evidence and any recommendations made by GAD and/or SAB and this would inform the need for any changes. In relation to Fair Deal, the Government was developing a further consultation which would explore potential alternatives to implementing Fair Deal within the LGPS including consideration of how the Government can most effectively enable Councils to outsource work to external providers within the Fair Deal framework. For the GMP indexation, the Government was currently considering responses to consultation on how public service pension schemes should meet their obligations to public servants reaching State Pension age after 5^th December 2018 with entitlements to a guaranteed minimum pension. The Government would respond in time to give schemes at least one year to implement changes and any costs would need to be considered once the policy position was finalised. The Minister suggested a meeting upon the Fair Deal consultation paper and the GMP consultation response being issued.

Indications were that the Government is listening to concerns and work would be taken forward with local MPs to help secure improvements. The Director of Finance would also provide the Sub-Committee with updates between meetings and through Matters Arising updates at future meetings (excluding the forthcoming meetings on 21^st November and 14^th December for Property and MAIF fund manager selection). The Chairman considered the Minster’s response positive but was concerned about any potential recommendation for an employer contribution rate remaining high. A Member also thanked the Chairman and officers for the letter to the Minister.