Neil Buxton noted that there had been an amendment to the admissions and terminations policy and funding strategy statement (FSS) to reflect changes to legislation that enabled the fund to accept an application to amend employers' contribution rates and more flexibility on how to deal with cessation payments for employers leaving the pension fund. It was noted that there had as a result been a minor amendment to the admissions and terminations policy reflecting that change.
There is an ongoing governance review nationally with the Scheme Advisory Board and the Pension Regulator (TPR) is reviewing its Code of Practice. The consultation by TPR of the code of practice is delayed and the new legislation for this should be implemented in Spring 2022. Officers will, however, start to review policies and practices in anticipation of expected changes from the governance review and code of practice.
There is a consultation on special severance payments (non-statutory payments such as garden leave etc) where the government expects greater transparency and sign-off by local authorities for such payments. Although there is no change to statutory redundancy payments the Government is continuing its review of exit payments.
HM Treasury asked the Government Actuary's Department (GAD) to review the cost management mechanism (where LGPS costs can be shared more equally between employers and members); costs were expected to rise but in fact, the cost of benefits was reduced. Several recommendations were made following this review including a minimum death in service benefit, reduced early retirement factors (that would have meant higher benefits payable on retirement, etc), and possible changes to the contribution rates. These amendments were put on hold because of the potential costs caused by the McLoud settlement. The consultation by GAD has proposed changes to the process of review and includes an amendment to the ceiling and floor before a review takes place from 2% to 3% and greater emphasis on current market conditions. It is unknown if the suggested amendments from the last review (the benefit improvement mentioned above) will be implemented.
That the Staff and Pensions Committee notes and comments on the report.