Minutes of Proceedings

Session: Session currently unavailable

Date: 13 December 2006

PRESENT: Mr D Watson
Mr M Carrick
Mr J Dallat
D McClarty

APOLOGIES: Mr J Kelly

IN THE CHAIR: Mr D Watson

IN ATTENDANCE: Mr T Evans, Mr E Hobson, Mr G Ballantine (Government Actuary’s Department), Ms L Kennedy & Ms J Skedd (Baillie Gifford, Agenda Item 3), Ms A Whitaker, Mrs K McCartney and Mr N Burns

1. Minutes of meeting of 20 September 2005 were agreed.

2. MATTERS ARISING

FROM TRUSTEE MEETING 20 SEPTEMBER 2005

MINUTES DATED 14 JUNE 2005

The Trustees agreed amendments to the minutes of 14 June as discussed at the meeting on 20 September 2005.

INVESTMENT OPTIONS

Mr Ballantine informed the Trustees that equities had performed better than expected over the past twelve months and that this has been of benefit to the pension fund.

In light of these comments the Trustees agreed to defer a decision on investing future monies in bonds until the next meeting.

ACTUARIAL VALUATION

Mr Ballantine informed the Trustees that the scheme valuation report had been finalised.

The Trustees agreed to implement the recommendation to increase Exchequer contributions from 21.3% to 22.6%.

In light of a finding by the NI Audit Office, the Chairman, requested in future, that GAD provide Valuation Reports earlier in the financial year, to assist with the Audit of the NI Assembly Accounts.

OUTSOURCING

Mr Hobson briefed the Trustees on the proposal including the value-for-money implications of outsourcing some administrative functions of the Assembly Members Pension Scheme (AMPS) to the Scottish Public Pensions Agency (SPPA).

Mr Evans informed the Trustees that, in addition to cost related issues, the Trustees may also wish to factor in maintaining the quality of the administration service currently available as well as the importance of ensuring continuity in terms of staffing.

The Trustees discussed and agreed that some administration functions of the AMPS should be outsourced to the SPPA and that a formal agreement, between the Assembly Trustees and the SPPA should be prepared for the next meeting. Mr Evan’s stated that he would advise the Secretary of State through the First Minister’s office.

LIFE INSURANCE

In light of GAD advice, the Trustees agreed that the Life Insurance Policy would no longer be required as it was felt that the current size of the pension fund was sufficient to self insure the scheme.

FROM TRUSTEE MEETING 14 JUNE 2005

AVC FLEXIBILITY

This item to be discussed at Substantive Item 4.

FROM TRUSTEE MEETING 15 MARCH 2005

PROPOSED CHANGES TO WESTMINSTER SCHEME

This item to be discussed at Substantive Item 5.

3. BAILLIE GIFFORD PERFORMANCE OF THE FUND

Lorna Kennedy and Julie Skedd from Baillie Gifford were in attendance to deliver a brief presentation to the Trustees on the current status of the pension fund.

The speakers informed the Trustees that the fund, to 30 November 2005, had outperformed the benchmark figure of 20.5% by 1.5%. This was mainly due to the good performance achieved by the current investment in equities.

Following the presentation Baillie Gifford responded to a number of questions raised by the Trustees.

The Trustees wished to note Baillie Gifford’s first year had been good and that their performance was considered to have met expectations.

4. AVC FLEXIBILITY

Mr Ballantine briefed the Trustees on the current situation regarding the timing of when members’ can take their AVC benefits.

The Trustees agreed to amend the rules, in April 2006, to offer members the facility to obtain a 25% tax-free lump sum from their AVC’s.

5. TAX SIMPLIFICATION

Mr Ballantine had prepared a note outlining the issues arising from the Finance Act 2004 and the Pensions Act 2004 and their potential impact on the AMPS. He highlighted the following aspects for specific attention:

Compulsory Issues:

Maximum Age of 75 for tax-free lump sum.

Optional Issues:

Retained Benefits and whether to dispense with the Retained Benefit check;
Commutation of Pension on Retirement; 
AVC Flexibility and contribution controls;
Added Years facility for new AMPS members.

The Trustees asked Mr Ballantine to provide a detailed paper, for their next meeting, expanding on both the compulsory and optional changes and what proposals should be considered to take these forward. The Trustees will then decide if they should consult with the members of the scheme on these changes.

6. ANY OTHER BUSINESS

INTERPARLIAMENTARY TRANSFER SCHEME

Mr Ballantine informed the Trustees that their counterparts in Westminster were scheduled to discuss this issue at their meeting on Thursday 15 December 2005.

Mr Ballantine agreed to produce a paper on this subject, which will be provided to the Trustees for discussion at their next meeting.

7. DATE OF NEXT MEETING

The Trustees agreed to continue with quarterly meetings, in 2006, to be held o n the 2nd Tuesday of March, June, September and December with the next meeting scheduled for Tuesday 14 March 2006.

The Personnel Office to clarify with Baillie Gifford the time required to deliver the remaining Trustee training modules. The Trustees would then decide if a separate meeting should be held solely for training purposes.

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