Current issues in the LGPS
26 Apr 2017 - Estimated reading time: 5 minutes
Ahead of the curve
Believe it or not, it’s over a year since English & Welsh funds carried out their actuarial valuations. Assets have performed extremely well since 31 March 2016 (I hasten to add this was at the time of writing!). Whilst such returns are very welcome, and comfortably ahead of valuation assumptions, it does raise the question, ‘What next for markets?’. Our latest views on assets, in particular credit and currency markets are discussed in our Spring Investment Perspectives.
Asset pooling means that a number of Pension Committees’ existing responsibilities will soon be delegated to their funds’ pools. It is important that Committees understand what decisions remain theirs and which ones have now been delegated. For those that fall into the latter camp, Committees must have clarity on how delegated decisions will be reported in the future. We spoke in more detail on this subject at CIPFA’s March 2017 pooling workshops. Slides are available on request.
It’s that time of year again when some of you will be working on your report and accounts. As with previous years, you are expected to set out some risk analysis, in particular disclosures relating to: Market risk (which can be subdivided into “currency risk”, “interest rate risk” and “other price risk”), Credit risk and Liquidity risk. Qualitative and quantitative disclosures are required for each of the three risk categories. If you wish to discuss further please let us know.
The 2016 valuations live on
31 March signified the end of the local 2016 valuations in England & Wales. However, they are only just beginning at a national level. Under Section 13 of the 2013 Act, the GAD is about to carry out a valuation of the LGPS and assess individual funds against four criteria (solvency, long-term cost efficiency, consistency and compliance). In early April, the GAD issued a data request to the fund actuaries for this purpose. We have since been collating the data and will submit the data directly to the GAD. Then it’s just a case of waiting for the report...
Back to school: Testing times for the LGPS
We’ve all spent a few years now, swotting up on the subject of Academies’ contribution rates. And the SAB announcement on 4 April about agreeing regulatory or non-regulatory solutions for change in effect gives funds yet another exam on this. But does the Government really know its own curriculum on this topic? And does it appreciate there aren’t right or wrong answers, just different value judgements which somebody needs to make? It could do worse than consider our recent myth-busting summary.
Severance Policy for Scotland
The Scottish Government has begun a consultation exercise on severance (exit payment) arrangements across the devolved public sector in Scotland. There is no indication that the Scottish Government is tipping its hat in the specific direction of one of the four options detailed within the consultation document – they are open to all viewpoints. The consultation will close on 23 June 2017 and the Government’s responses will be published during summer 2017.
With many local authorities having elections on 4 May, the membership of many Pension Committees will also be affected. Given the hugely significant changes taking place in the LGPS it’s important, therefore, that elected members new to the Committee are brought up to speed quickly. If you are likely to have new elected members involved in pensions, or even experienced hands who want a refresher, please speak to your usual Hymans contact for a chat about how we can help.