Minutes of Proceedings
Date: Tuesday, 22 February 2011
1. MINUTES OF PREVIOUS TRUSTEES MEETING
The minutes of the Trustee meeting held on 30 November 2010 were agreed.
- Pensions Team to arrange for upload of minutes of 30 November 2010 to the Assembly website.
2. STANDING ITEMS
The Trustees noted that there has been no change to the risk register.
3. MATTERS ARISING
Update on Dual Mandate Members paper
The Trustees were advised that the ‘Dual Mandate Members’ paper was accepted without amendment at the Commission meeting in December 2010.
The Trustees noted that the changes will be reflected in the amended Scheme Rules and that the Pensions Team will write to dual mandate Members informing them of the impact of the NI Assembly Members Act 2010 on their pension benefits.
- Pensions Team to write to dual mandate Members.
Pension Increase RPI/CPI issues
The Trustees considered a further paper from GAD on the financial impact of retaining pension increases equivalent to RPI as opposed to adopting increases equivalent to CPI. The Trustees also considered a briefing note by Eversheds outlining the legislative background to the issue.
The Trustees discussed the options available and noted the potential impacts on Scheme valuations, funding position, employers’ contributions, commutation factors and transfers in and out of the Scheme. The Trustees also noted that public sector increases from April 2011, based on CPI will be 3.1% (RPI for the same period would be almost 50% higher at 4.6%) and the fact that other public sector organisations will be using CPI for future pension increases.
In light of the fact that Eversheds are looking into the legislative background of the Scheme and the appointment of an independent panel to review Members remuneration and allowances is imminent, the Trustees deferred making a decision on pension increases. The Trustees accepted that by deferring the decision the AMPS will be deemed to have switched to the CPI increase basis by default.
- Pensions Team to apply CPI in respect of pension increases due from April 2011.
- Pensions Team to contact GAD to request revised factors.
Retention of the Earnings Cap - update
The Trustees noted that, as agreed at the last meeting, a paper has been submitted to the Commission recommending that the earnings cap be retained beyond 6 April 2011 to limit the Scheme’s financial liabilities. The paper is due to be discussed at the next Commission meeting.
Scheme Rules Review / Appointment of Legal Advisor
At the last meeting the Trustees agreed that a subgroup would meet to evaluate tenders for the provision of legal advice. The Trustees noted that Eversheds were awarded the contract.
The Trustees considered a briefing note from Eversheds and indicated that they were content with the first draft of the amended scheme rules e-mailed to them and included in their meeting papers.
The Pensions Team will continue to liaise with Eversheds to ensure the Scheme Rules review is completed.
- Pensions Team to further liaise with Eversheds regarding a final draft of the revised Scheme Rules.
Administration Review - Appointment of Pension Specialist
Following agreement of the terms of reference for this review at the last meeting, the Trustees were advised that four companies submitted tenders. The Trustees met on 25 January 2011 to agree the tender evaluation criteria. A sub-group of the Trustees met on 9 February 2011, and having evaluated the tenders, awarded the contract to Eversheds.
The Pensions Team will cooperate with Eversheds to carry out the review.
- Pensions Team to liaise closely with Eversheds to take forward the review.
Additional Voluntary Contributions – contact with Clerical Medical
Following a query raised at the last meeting, the Trustees noted that Members may make direct contact with Clerical Medical in relation to their AVCs, however all communications from Clerical Medical will be issued through the Pensions Team as the Trustees administrators.
4. PENSION TAX CHANGES – revised Annual allowances
The Trustees considered a briefing note from GAD on Pension Tax Changes announced by the Government in October 2010 and effective from April 2011. The Trustees noted the revised annual allowance of £50,000 (effective from April 2011) and the potential to carry forward any unused annual allowance for the previous three years.
The Trustees agreed that the ‘Pension Input Period’ (the 12 month period used to calculate the benefits to be tested against the Annual Allowance) for AMPS should be 1 st April to 31 st March.
The Trustees noted the requirement to automatically inform any member who breaches the annual allowance within the AMPS (ignoring any benefits accruing outside the scheme). The Trustees also agreed that all Members must be provided with information on the amount of annual allowance they are using up in the AMPS, on request.
The Trustees instructed the Pensions Team to ensure that procedures are put in place to monitor Members benefits against the annual allowance and ensure that any Members who breach the annual allowance are informed within the time limits.
The Trustees further considered measures that may be taken to mitigate the impact of any breaches of the annual allowance, should any occur in the future. The Trustees were content with the availability of possible measures such as carrying forward any unused annual allowance, phasing increases in pensionable pay following any salary increase or allowing the member to opt for the lower accrual rate of fiftieths.
- Pensions Team to establish procedures for monitoring benefits against the annual allowance and inform Members automatically if a breach occurs, and otherwise on request.
5. ASSEMBLY ELECTIONS MAY 2011
The Trustees were encouraged to refer MLA colleagues to contact the Pensions Team if they require any information regarding their pension entitlements.
The Trustees noted that they retain the office of Pension Trustee until replaced by resolution of the Assembly following the elections and that the Pensions Team may call on them following dissolution if necessary.
6. ANY OTHER BUSINESS
Approval of new pensions
The Trustees approved payment of pensions in respect of 2 former members.
Approval of Transfer in to the AMPS
The Trustees approved a transfer-in to the Scheme from a Member.
Extension of SPPA contract
The Trustees approved the extension of the contract with SPPA until 31 March 2012 in order to facilitate the review of administration.
- Pensions Team to write to SPPA re extension of contract
7. DATE OF NEXT MEETING
The Trustees agreed that a further meeting will be arranged if required.