Minutes of Proceedings

Session: 2006/2007

Date: 10 October 2006

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 Kathleen Dickson (Baillie Gifford), Mrs Eleanor McKee (Baillie Gifford), Ms A Whitaker, Mrs L Anderson and Mr H Clarke

1. MINUTES

The minutes of the meeting held on 27 June 2006 were agreed.

2. MATTERS ARISING

Investment Options

Baillie Gifford presented an update on the fund immediately following the Trustee meeting.

Actuarial Valuation

The final version has been received and issued to all the Trustees. It should be noted that the shortfall of liabilities as at 31 March 06 was estimated at £0.8 million, this is a significant reduction since 31 March 2005 when the shortfall was estimated as £1.43 million.

3. AMENDMENTS TO SCHEME RULES

The following proposed amendments were put to the Trustees for approval:

Ill Health Benefit Awards

In line with the changes in legislation and in parity with Westminster the Trustees agreed that the amendment:

“and will continue to be incapable of carrying out the occupation”

be inserted into the Scheme Rules as Regulation J1 (3)(d).

Excess Tax Charges

The Trustees agreed that the following section in relation to excess tax charges:

“On retirement from the Scheme at any time, if the capital value of the member’s total benefits, including the capital value of any other benefits already crystallized, exceeds the Lifetime Allowance (as defined by the relevant Finance Act), the member will be required to commute so much of their pension as is required to meet the Recovery Charge due (as defined by the relevant Finance Act), and for this amount to be retained by the Scheme’s managers to pay the Recovery Charge.”

Be inserted in the Scheme Rules as a separate regulation – 
PART U – Excess Tax Charges - U1.

Death Benefits

The Trustees agreed to adopt the changes recommended by the Government Actuary Department in line with The Parliamentary Pensions (Amendment) Regulations 2006 laid before Parliament on 29th March 2006. The scheme rules will reflect that ‘any residual lump sum payable under Reg M2(4) to be paid as a pension to the member’s representatives for the remainder of the five year guarantee period for those pensioners age over 75 at the date of death’.

Death in Service

The Trustees agreed to amend the wording of Reg L to limit the death in service lump sum to members’ age under 75.

Mr Hobson confirmed that the amended scheme rules would be passed to the Assembly Legal Services team for comment. A copy of the scheme rules with all the agreed compulsory changes will then be forwarded to the Secretary of State’s office for determination and subsequent re-publication.

Annual Report and Accounts 2005/06

Mr Watson confirmed that the Northern Ireland Audit Office (NIAO) annual audit of the accounts has been completed and that a certified copy has been received. The Trustees agreed that the accounts will be printed and distributed to Members.

4. ANY OTHER BUSINESS

Post November 24th Issues

Mr Evans gave a short brief outlining the issues that may affect the Assembly Members Pension Scheme post November 24th 2006. If Members have their salaries suspended this will have an effect on the contributions being paid into the scheme. The Assembly Legal Service office have confirmed that Members could not accrue any additional reckonable service while salaries remain suspended. Advice will be sought from the Secretary of State’s office if this situation arises.

Mr Evans also reiterated that there has been no indication that the position of the Trustees will be affected by the decisions made after the 24th November. Mr Evans stressed that the Trustees have maintained the integrity of the scheme since inception and during suspension. The existing Trustees will continue to discharge their responsibilities, with the support of the Personnel Office.

Mr Carrick expressed his concern that the Secretary of State address the above issues in a timely manner post November 24th. Mr Evans assured him that these concerns will be addressed as a matter of urgency as and when they arise.

Death of Michael Ferguson MLA

The Trustees have asked that their sympathies be passed to Mr Ferguson’s family at this time. It was agreed that the death gratuity and spouse/children’s pensions be processed for payment to the appropriate person.

Freedom of Information Request

A Freedom of Information Request was received from Mr David Gordon from the Belfast Telegraph requesting the amount of contributions made by members and from the consolidated fund to the Assembly Members Pension Scheme. The Trustees confirmed that this material was already available on the Northern Ireland Assembly website in the Annual Report and Accounts and that Mr Gordon be made aware of this.

Pension Administration Staff

Mr Watson thanked all the Pension Administration staff for their continuing hard work in relation to the efficient functioning of the scheme.

Baillie Gifford Contract Extension

The Trustees agreed that the contract for the investment managers, Baillie Gifford be extended for an additional year from 1 November 2006 to 31 October 2007.

Baillie Gifford Investment Fund Update

Kathleen Dickson from Baillie Gifford provided an update of the scheme after the Trustee meeting. The 2nd Qtr investment was down compared with the high increase in Qtr 1. The fund performed badly in some areas due to deflated market conditions. The 3rd quarter performance is also disappointing, however, the Trustees were reassured that the outlook was positive and that in real terms the fund was on course to outperform the benchmark over the 3 year investment period.
The Trustees have previously mentioned an intention to move toward increasing the funds holdings in Bonds. Kathleen advised having a close look at the schemes liability profile and seeking advice from the Actuary.

AVC flexibility

Mr Carrick requested that this item be revisited at the next meeting.

5. TRUSTEE TRAINING

The Trustees received information from the Pensions Regulator website, detailing the knowledge and understanding they require.

Baillie Gifford delivered training on Asset Allocation and Dealing.

6. DATE OF NEXT MEETING

The next meeting is to be confirmed post 24th November 2006.

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