Minutes of Proceedings
Session: Session currently unavailable
Date: 06 October 2015
The Chairperson welcomed all attendees to the meeting.
1. MINUTES OF PREVIOUS TRUSTEES MEETING
The draft minutes of the meeting held on 30 June 2015 and the closed meeting held on 8 September 2015 were agreed.
- Agreed minutes of the 30 June 2015 meeting to be uploaded to the Assembly website (Pensions Team).
2. STANDING ITEMS
The Trustees noted that the Pension Trustee membership has been updated on the Risk Register, with the removal of Mr M Brady and the addition of Ms C Ruane.
Conflicts of Interest
The Trustees declared that their membership of the Scheme is an ongoing conflict.
3. MATTERS ARISING
Councillor Pension Transfer
The Chairperson informed the Trustees that these transfers are being processed.
Annual Report and Accounts 13 – 14
The Trustees noted that the Annual Report and Accounts has been distributed to all Scheme members.
The Trustees noted that the June edition of the Newsletter was distributed to all Scheme members following the last meeting.
4. PENSION FLEXIBILITY
At the last meeting the Trustees considered a joint paper from GAD and Eversheds regarding the changes in legislation affecting defined contribution schemes. The Trustees had agreed that they would continue to offer the option of AVCs.
The Trustees discussed availing of the statutory override to allow Members to combine their AVCs and main Scheme benefits and considered a paper from Eversheds and a draft resolution to this effect.
The Chairperson advised the Trustees that Clerical Medical has confirmed that there are no administrative difficulties with this proposal.
Mr Wells joined the meeting at 9:20am
The Trustees agreed that further discussion of this issue was required and deferred any decision until the next meeting.
Mr Wells declared his membership of the AVC scheme as a potential conflict of interest in relation to this item.
- Item to be added to the agenda for the next meeting (Pensions Team).
5. GAD FACTOR REVIEW
The Trustees were reminded that the triennial valuation of the Scheme was carried out by GAD and the final valuation report considered at the meeting of 20 January 2015. Since then, the report has been shared with the Independent Financial Review Panel. It is customary following a triennial valuation to review the actuarial factors used in the Scheme.
The Chairperson referred the Trustees to GAD's briefing note 'Review of actuarial factors' and reminded Members that due to time constraints at the last meeting this paper was deferred to this meeting.
The Chairperson handed over to Mrs Anderson to take the Trustees through the 5 areas for consideration:
5.1 - Cash Equivalent Transfer Value (CETVs) (including pensioner CETVs on divorce)
Mrs Anderson reminded the Trustees that at the last meeting they discussed the discount rate and agreed to adopt the same discount rate as that used during the 2014 valuation.
The Trustees agreed that:
- Mortality assumptions should be in line with those adopted at the last valuation;
- Other demographic assumptions should be consistent with the existing CETV factors.
The Trustees considered whether factors should be unisex or gender specific as is the case currently. The Chairperson asked Mr McClintock to explain the impact on Members of the Scheme. Some discussion took place around the advantages / disadvantages of moving to unisex factors. The Trustees agreed to retain gender specific factors on the basis of fairness, accuracy and consistency.
5.2 - Transfer-in factors
Mrs Anderson advised the Trustees that GAD recommend using the Pension Regulators guidance as a suitable starting point to determine the assumptions for transferring in values. The Trustees agreed to adopt the assumptions outlined in table 3.2 of the GAD paper.
5.3 – Commutation Factors
The Trustees agreed that GAD should use the financial and demographic assumptions from the 2014 actuarial valuation in calculating revised commutation factors. It was noted that there would be no material financial strain on or gain to the Scheme as a result.
5.4 – Early retirement factors
The Trustees agreed to accept the GAD recommendation that early retirement factors are calculated using the current method. GAD will review the factors using the assumptions already agreed by the Trustees and will revise the factors if necessary.
5.5 – Lifetime Allowance and Annual Allowance factors
The Trustees noted that GAD has not previously provided these factors as they have not been required. It was agreed that, if required, these will be provided on a case by case basis.
- Letter to be sent to GAD informing them of the Trustees decisions (Pensions Team).
6. CETV REDUCTION REGULATIONS
The Trustees noted the new regulations which came into force in Northern Ireland on 2 October 2015, and considered the GAD information paper on the regulations and the potential implications for the AMPS.
7. INDEPENDENT FINANCIAL REVIEW PANEL UPDATE
The Chairperson reminded the Trustees that members of the Independent Financial Review Panel (the Panel) attended the last meeting to outline their plans for the revised Assembly Members Pension Scheme which will be introduced for the next mandate.
The Chairperson invited Mrs Anderson to give an overview of some of the provisions of the new Scheme which may be of interest to the Trustees.
Mrs Anderson advised that the Panel have indicated that:
- Current Members of the AMPS who are within 10 years of normal pension age will remain in the current Scheme; will retain the benefits associated with that scheme; and will continue to accrue benefits at 40ths if they are currently on the 40ths accrual rate;
- Members joining the new Scheme will accrue benefits at the equivalent of 50ths;
- Children's pensions will remain at the current level in both Schemes;
- The definition of dependents will be extended in the new Scheme to cover unmarried partners in a similar manner to other public sector schemes;
- The AVC scheme will close to new members but existing members who are currently contributing will be allowed to continue; and
- Ill health retirement - enhancements of service will be limited to the end of the current mandate and the Trustees will be required to seek independent medical advice for all ill health retirement applications.
The Trustees noted that the new Scheme rules are currently being drawn up and await further updates.
- Update Trustees at next meeting (Pensions Team).
8. INVESTMENT PERFORMANCE REVIEW
The Chairperson referred the Trustees to a GAD paper reviewing the performance of the Investment Manager as at 30 June 2015.
The Trustees considered the paper and noted that:
- The Episode Allocation Fund has provided some protection against market falls relative to other funds;
- The Recovery Fund had a better quarter, although still some way behind its longer term performance targets;
- Overall fund performance has been above the discount rate since the 2014 valuation;
- Recent performance has been poor driven by poor market conditions.
A further review will be carried out in 12 months.
- Item to be added to the agenda in due course (Pensions Team).
9. ANY OTHER BUSINESS
Annual Benefit Statements and Annual Allowance Statements 2015
The Chairperson informed the Trustees that Deloitte have prepared Annual Benefit Statements and Annual Allowance Statements for the period ending 31 March 2015. These have been issued to all active Scheme members.
Pension Ombudsman Determination – Firefighters and Police Pension Schemes
The Chairperson advised the Trustees of a recent decision of the Pensions Ombudsman. The Ombudsman upheld a complaint brought by a retired firefighter, and held that GAD was guilty of maladministration in failing to identify that it had an on-going responsibility to calculate appropriate factors for commutation of pension benefits. The Chairperson referred the Trustees to an e-mail from GAD regarding the decision and a note of the legal case.
The Trustees were reassured by Mr McClintock that the AMPS factors are reviewed by GAD after each full valuation of the scheme and indeed the Trustees considered this earlier in the meeting at item 5. No further action is necessary by the Trustees.
The Trustees approved a transfer out of the Scheme in respect of a deferred Member.
The Trustees approved payment of a new pension.
Clerical Medical Name Change
The Trustees noted a letter from Clerical Medical, the Schemes AVC provider, advising of their intention to restructure and rebrand.
- Copy of Clerical Medical letter to be issued to all Members who currently contribute to AVCs (Pensions Team).
The Chairperson asked the Trustees if they wished to receive their meeting packs electronically for use on their tablets either instead of, or in addition to hard copy packs.
The Trustees all agreed that they would like to continue receiving their packs in hard copy for the moment.
10. DATE OF NEXT MEETING
Tuesday 19 January 2016.
The Chairperson thanked everyone for attending the meeting today and advised them that we would now be moving on to a closed meeting to consider 2 Ill Health retirement applications.
The Trustee meeting ended at 10:05am