Issue - meetings

Report of the Corporate Director (Resources, Environment and Cultural Services) on the Local Government Pension Scheme triennial valuation 2019.

(Note: The Chairman of the Resources Overview and Scrutiny Committee has been given notice that it was impracticable to comply with the requirement that at least twenty eight days notice must be given of the intention to make a key decision not in the Forward Plan in accordance with Regulation 10 of the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012 because it was urgent and could not reasonably be deferred for the reason specified).

The reason for this item is to allow the authority to inform the actuary to make a decision without delay.

The Cabinet agreed to take up option 1 to address the pension fund deficit which meant that an additional lump sum payment of £1.848M would need to be paid into the pension fund to be funded from the pension earmarked reserve as well as this existing General Fund and Housing Revenue Account budgets.

Report of the Corporate Director (Resources, Environment and Cultural Services) updating the Cabinet on the results of the 2019 valuation and seeking approval to a one-off lump sum contribution into the fund to help manage the annual contributions from the Council.

(1)       The Decision Taken

RESOLVED:

That the Cabinet agrees to take up option 1 to address the pension fund deficit which meant that an additional lump sum payment of £1.848M would need to be paid into the pension fund to then be funded from the pension earmarked reserve as well as existing General Fund and Housing Revenue Account budgets.

(2)       Reasons for the Decision

The deficit at £10M or 94%, had considerably improved since the 2016 exercise.

Currently, the Council was making contributions to the fund at 18.3% of payroll, plus an additional £1.1M annually.

The actuary had recommended that the 18.3% contribution be maintained and had set out two options to continue to reduce the pension deficit via lump sums.

Option 1 involved an additional one-off payment of £1.8M combined with maintaining the annual lump sum payments at £1.1M.

Option 2 did not involve an additional one-off lump sum payment, but larger annual lump sum payments. 

Option 1 was recommended, as money invested in the pension fund generated a more favourable return than the Council could achieve through its investment strategy.

(Note: Councillor S.Boulton declared an interest in this item – Minute 82 refers).

(Note: The Chairman of the Resources Overview and Scrutiny Committee had been given notice that it was impracticable to comply with the requirement that at least twenty eight days’ notice must be given of the intention to make a key decision not in the Forward Plan in accordance with Regulation 10 of the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012 because it was urgent and could not reasonably be deferred for the reason specified).

The reason for this item was to allow the authority to inform the actuary to make a decision without delay.