Are you 2020 ready?
16 Jan 2020
The year 2020 has now begun which can only mean one thing for LGPS Funds in Scotland – it’s time to prepare for your best valuation yet! Planning will lead to a smooth 2020 valuation process and early completion of valuation calculations, leaving you more time to focus on what really matters – liaising with your stakeholders and reaching the best possible funding solutions for your fund and your employers.
The valuation date for LGPS Scotland is 31 March 2020 but there is much that can be done sooner to ensure you are 2020 ready. Here we explore some tasks funds can complete ahead of time to save you time and effort later in the year.
Membership data cleansing
Looking back to the 2017 valuation, and with the complexities introduced by the CARE scheme, the most significant efficiency barrier was poor data quality. Our Data Portal tool is available for use all year round at no cost. You can use this tool to cleanse your data now so you’re in a stronger position when it comes to submitting your valuation data. Why not:
- Cleanse and finalise data with an effective date of 31 March 2019, meaning when it comes to prepare your 2020 valuation data you need only prepare one final year and will have identified and resolved any historic issues
- Investigate data quality for some of your more complex employers, and use the analysis provided by the Portal to start communication with these employers early
The Data Portal allows to you cleanse data for your whole fund or a subset of your fund (e.g. a single employer), allowing you the flexibility to focus your attention on the right areas. Speak to a member of your Hymans team for some data cleansing tips.
Review your employer information
Your Hymans Robertson team hold a database of information relating to each of your participating employers which helps us to set appropriate contribution strategies. Ask a member of your Hymans Robertson team for a copy of your Employer Database so that you can review this and update with the most up-to-date information. You may also wish to carry out a covenant review now to understand your employers’ financial strength, so you can discuss how to reflect this in funding plans ahead of the valuation.
Plan your stakeholder liaison
Work with your actuary now to agree a valuation timetable and plan the agenda for your 2020 Pensions Committee and Employer meetings. This will give you increased clarity on deliverables and allow you to identify and plan for times of peak activity.
Do some of the valuation now
Our approach to setting contribution rates for long-term, secure employers, such as councils, doesn’t rely on market conditions on the valuation date. This means you don’t need to wait until after 31 March 2020 to test and review contribution strategies for these employers. It also gives these employers more time to reflect any changes in contribution rates into their budgets. Speak to your actuary about carrying out comPASS modelling early to complete some of the valuation work before 2020.
Update employer assets
In the past, employer assets have been calculated once every 3 years as part of the triennial valuation process. This is because the approach to allocating assets relied on the membership data provided for the triennial valuation. This approach delayed the provision of valuation results as it meant we calculated employer liability values and asset values simultaneously.
With our Hymans Robertson Employer Asset Tracker (HEAT) system, this is no longer the case – we can now track your employers’ assets on a monthly basis, without the need for membership data, meaning employer asset values will be readily available when it comes to valuation time. HEAT uses a cashflow approach to track employer assets each month making your valuations more accurate, transparent and efficient.
For more information on any of the valuation preparation topics discussed, please get in touch with your usual Hymans Robertson contact. Please also feel free to speak to one of our representatives at our 2020 valuation seminar taking place on 20 February 2020 at our Edinburgh Office.