Minutes of Proceedings

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

APOLOGIES: Mr J Kelly

IN THE CHAIR: Mr D Watson

IN ATTENDANCE: Mr T Evans, Mr E Hobson, Ms S Brough (Government Actuary’s Department), Ms A Whitaker and Mrs K McCartney

1. Minutes of meeting of 13 December 2005 were agreed.

2. MATTERS ARISING

ACTUARIAL VALUATION

The final version of the Actuarial Valuation for year ending 31 March 2005 has now been received from the Government Actuary’s Department, (GAD).

Mr Evans informed the Trustees that he had met with Grant Ballantine from GAD to agree the timescale for receipt of the mini valuation for year ending 31 March 2006. This has been agreed for mid June. 

OUTSOURCING

Mr Watson informed the Trustees that the Service Level Agreement with the Scottish Public Pensions Agency has now been agreed and that outsourcing will commence 1 April 2006.

LIFE INSURANCE

This Item has been moved off the agenda now as the Trustees agreed at their previous meeting that Life Insurance Policy was no longer required.

TAX SIMPLIFICATION

This item to be discussed at Substantive Item 3. 

3. TAX SIMPLIFICATION

Sarah Brough from the Government Actuary’s Department was in attendance to brief the Trustees on GAD’s paper on the mandatory items from the Finance Act 2004 and the Pensions Act 2004 and the actions that need to be taken.

Contribution Refunds

The Trustees agreed to change the scheme rules to reflect the tax charge specified in the Finance Act 2004 to be passed onto members.

Definition of child

The AMPS scheme rules do not need to be changed in respect of definition of child. The Trustees agreed to change the wording in the scheme rules regarding children’s pensions, which are payable if the child, is physically or mentally impaired in order to satisfy the Finance Act 2004.

Death Benefits

The Trustees agreed to take further advice on this issue and to make a decision regarding required action as soon as possible.

Minimum Pension Age

Current members of the AMPS scheme are protected against the change in retirement age. However this issue will affect new members and the Trustees agreed to change the scheme rules to reflect this.

Maximum age of 75 for tax-free lump sum

The Trustees agreed to change the rules of the scheme to allow members affected by this change to draw full benefit lump sum immediately before their 75th birthday. They also agreed that the scheme should be amended to allow any member over age 75 at 6 April 2006 to avail of their lump sum whilst still employed, but to abate their pension until retirement and that no further benefit accrual would occur.

The scheme rules will be changed to reflect this change.

Excess tax charges

The Trustees agreed to allow members to take benefits in excess of the Lifetime allowance as either pension or lump sum, with sufficient commutation to meet the recovery charge.

The scheme rules will be changed to reflect that the recovery charge will be made from the members by enforced commutation. 

Administration issues

Sarah Brough also outlined some additional administration requirements, which do not appear to require changes to the scheme rules.

Re-employed members: Aggregation

The Trustees agreed that members should be given a choice regarding the aggregation of their benefits and that the scheme rules will be changed to reflect this.

Ill Health Benefit Awards

The Trustees agreed that they must be satisfied that the member is and will continue to be incapable of carrying out ‘the’ occupation because of physical or mental impairment and that the scheme rules will be changed to reflect this.

The Trustees concluded that the most important issue was to change the scheme rules in relation to members approaching age 75 or over age 75 at 6 April 2006. It was agreed not to contact any members who may be affected until the direction was finalised. Mr Watson asked the pension administrators to keep the Trustees informed.

Mr Evans confirmed that he would contact the Office of the First Minster Deputy First Minister to set in motion the scheme amendments required for approval from the Secretary of State.

4. ANY OTHER BUSINESS

5. DATE OF NEXT MEETING

The next official meeting is to be held on 13 June unless an extraordinary meeting is required to put in place some of the changes agreed regarding the Finance Act 2004.

The Trustees agreed that Baillie Gifford’s next two training modules should be delivered on a separate date as it will last approximately 2 and a half hours. Date to be confirmed.