Decision details

The item was introduced by Lisa Eglesfield. She said there had been a revised valuation of employer contribution rates of pensionable pay, which had risen by 8.5% to 37.6%. This would take effect from 1 April 2024 and last until 31 March 2027. Lisa Eglesfield said the increase in contribution rates was due to the age discrimination remedy and the Matthews project, both of which would increase pension liability for all Funds. This had been taken into account when setting the Council’s Medium Term Financial Strategy. It had been confirmed there would be a top up grant issued by the Treasury.

Lisa Eglesfield said the pension increase figures had been released after the report had been written. It had been confirmed these would rise by 6.7% from the first Monday of the new tax year. Additionally, care pension pots would rise by 7.7% from April 1, in line with the Treasury order.

Members were told the lifetime allowance limit had now been removed. Previously there had been a limit on the amount of pension benefits someone could own without incurring extra tax liability. Lisa Eglesfield said the removal of this limit would allow greater freedoms regarding pension savings for members. However, there would still be a limit of £268,275 on the amount of tax free lump sum that a member could choose. Members wishing to access a lump sum over this amount would have it taxed as income using the appropriate tax code. Communications on this to make members aware was being worked on by the LGA and would be circulated nearer the end of the tax year.

Lisa Eglesfield said the terms of reference and the contract conflicts of interest policy had been reviewed by Legal and were now being combined into one policy. The wording of the policy was included in the papers for members to view.

Members were told the next meeting of the Staff and Pensions Committee would consider a recommendation that Warwickshire County Council’s functions as the scheme manager of the Fire Pension Scheme should be delegated to the Section 151 officer, in line with the Local Government Pension Scheme and other finance-related functions of the Council. Currently it is delegated to the Chief Fire Officer. Administration of the scheme would remain with the West Yorkshire Pension Fund.

Responding to a question from the Chair, Liz Firmstone (Head of Finance Transformation and Transactions) said there was likely to be a funding gap of £88,000 caused by the increase in employer contribution rates. This was being managed as part of the Medium Term Financial Plan. The Chair noted there appeared to be a national disparity between estimated additional costs and the grant that Funds would receive.

Members noted the contents of the updates.