Autumn Budget 2017

Thankfully, there were no radical pensions-policy announcements. Our 60 Second Summary has a round-up of the pensions highlights.

Road to pooling

It is now less than 5 months until the Government’s April 2018 deadline for LGPS pooling in England and Wales. In our 60 Second Summary, we discuss a range of topics that Pension Committees have been asking themselves as the world of pooling approaches. What does pooling mean for their responsibilities? What should they expect from their pools and what decisions should Committees be making? Committees must understand the implications of pooling to ensure the desired outcomes of pooling are achieved and legacy assets are being managed effectively.

Responsible investment

A Friends of the Earth publication provided details (based on their methodology) of LGPS funds’ fossil fuel exposure. Carbon risk is one of a number of Responsible Investment (RI) aspects that funds must consider and we encourage Pension Committees to consider and agree their RI views and beliefs (we have held workshops with a number of funds to facilitate such discussions). This approach allows Committees to set a clear policy and understand how their existing arrangements sit relative to this policy before considering change.

It’s good to talk

For Scottish funds, the focus is now on communicating initial valuation results to employers. To help with this, we recently hosted a webinar focussing on employer engagement along with examples of different employer funding issues. It is also the time to revisit and review your Funding Strategy Statement to ensure it reflects the latest CIPFA guidance and any changes to your funding strategy.

Draft Regulations for consultation in Scotland

Draft Regulations have been published for consultation which consolidate a number of amendments to the LGPS Regulations in Scotland, as well as introduce other important changes. In particular, the amendments look to introduce the flexible use of AVCs in line with Freedom & Choice; introduce flexibility for employers around assumed pensionable pay in ill-health retirement cases; enable the payment of an “exit credit” where an exiting employer is in surplus, and remove the maximum 3 year period for a suspension notice. It is somewhat concerning that a number of the proposed amendments appear not to have been included within the drafting, leading to a lack of clarity as to whether it actually meets the policy intent. The closing date for responses is Monday 1 January 2018.

Tier 3 employer review commenced

The Scheme Advisory Board in E&W recently commenced short surveys of administering authorities and tier 3 employers as part of its review of these employers’ participation in the scheme. The Board is interested in the challenges tier 3 employers face and the possible options for change that might improve the funding, administration, participation and member engagement of these employers. The deadline for responding to both surveys is 31 December 2017.  

PO, LGPS, IDRP & IRMP not OK.

An interesting Pensions Ombudsman's determination gives LGPS employers a useful insight into the importance of considering, and giving appropriate weight to, all of the available medical evidence when considering ill-health retirement cases. In this case, the Ombudsman considered that the employer had failed to question sufficiently why the IRMP’s opinion differed from other medical opinions that had been provided. In a highly unusual direction, the Ombudsman required that the employer seek a further view not from an IRMP but from a psychiatrist as to the member’s likelihood of recovery. 

How does your data measure up?

Confirmation has been received from the Regulator that funds will be expected to calculate their common and key scheme specific (formerly conditional) data scores next year. Come 2018, all LGPS funds will need to confirm the existence and, importantly, the accuracy of these two data types within their annual scheme return. The Regulator has provided a quick guide to measuring your data covering the data funds will need to measure, the practicalities of doing this and, finally, how to calculate data scores.

Isn’t that an Eastern Bloc country?

All those jokes have been exhausted now, and GDPR comes into play in a few short months. Here are some questions to ponder. What are you communicating to Fund members about their data protection? How are you bringing this to your Committee’s attention? For instance, is it on their risk register? Would your officers and/or Committee benefit from a short training session on this topic? Do get in touch to see how we can help you navigate this particular acronym.