Issue - meetings

The update on the 2022 valuation was given by Rob Bilton of Hymans Robertson, who explained that although the valuation had yet to be fully completed it was appropriate for members to consider its contents. Members were reminded valuations were carried out on a triennial basis and the current valuation period was due to end on 31 March. New employer rates would then take effect from 1 April, lasting until 31 March 2026. Members were reminded of the purpose of the valuation, which included calculating employer contribution rates analysing actual experience against assumptions that had been made regarding each employer. It also ensured the Fund complied with legislation. Rob Bilton said the valuation would consider the balance of each employers’ liabilities against its assets, and had to ensure future contributions and future investment returns would cover liabilities.

Rob Bilton said Hymans Robertson was reliant on the data received from the Fund being complete and up to date. He said the information received from the Warwickshire Fund was amongst the best that Hymans Robertson dealt with. The timeline for how the valuation was processed and completed, and what data sets were considered, was set out for members. Hymans Robertson had engaged with the Pension Fund Investment Sub Committee to work on agreeing strategic decisions and the assumptions that the valuation would be based on. Rob Bilton said there had been a good level of engagement and the detail supplied had been very helpful to Hymans Robertson. Engagement with employers had also been important in the valuation process.

Members were told the funding position had improved since the last valuation in 2019. The funding level had increased from 92 per cent to 104 per cent. Rob Bilton said this was due mainly to an investment return of nearly 30 per cent, which had offset the higher inflation expectations. Employer contribution rates had remained steady. The situation in Warwickshire was comparable with other LGPS Funds. Members were reminded that current markets were volatile and were liable to change on a daily basis.

The reclassification of colleges from private sector to public sector meant that the Department for Education was reviewing the need for a guarantee for colleges in the Fund, similar to that used for academies. Currently there is no guarantee in place. The Fund would revisit the risk factor associated to colleges once there was an update on this.

There had been no material changes to the contents of the funding strategy statement since the last valuation. Some of it had been simplified to make it more user friendly to employers. Its contents had been put out to consultation to scheme employer members, which was due to close the following day. Any comments would lead to any necessary amendments being made by the 31 March deadline.

Responding to a point raised by Keith Francis, Chris Norton said in any valuation there would be some employers that may struggle with their pension contributions, for a variety of reasons. The Fund would work with  ...  view the full minutes text for item 2