· Keith Palframan from Nottinghamshire County Council Graeme Muir from Barnett-Waddingham will attend to provide a presentation to the committee.
Minutes:
Keith Palframan from Nottinghamshire County Council and Graeme Muir from Barnett Waddingham attended to provide a presentation to update members of the committee on the latest situation regarding the Local Government Pension Scheme (LGPS) and the Nottinghamshire Pension Fund.
The presentation provided information on:
· The role of Nottinghamshire County Council
· Governance arrangements
· Fund management and pooling arrangements
· LGPS Regulations
· Benefits Structure and changes
· Valuation methodology
· Funding strategy
· Deficit levels, revaluation and future risks
The Chairman noted that the Nottinghamshire Pension Fund was being discussed at the meeting due to a there being a perceived lack of information regarding the processes that had led to Rushcliffe Borough Council becoming liable for £20 million of the fund’s deficit, and there being concerns that a similar situation could happen again in the future which would impact negatively on the Borough Council’s finances.
The Executive Manager – Finance and Corporate Services reassured the committee that in the previous year’s budget all of Rushcliffe Borough Council’s pension contributions had been paid up front, and that going forward capacity had been built into the Council’s budgets for the next five years for the Council to meet its obligations with regard to paying towards its share of the fund’s deficit. Members of the committee noted that the deficit could still rise due to revaluations of the fund in the future and expressed concern that this unpredictability could create further financial pressures in future years for the Council. Members asked how the rate of LGPS members starting to draw down their benefits would impact on the deficit and were advised by Graeme Muir that this scenario had been considered and incorporated when the calculation regarding the deficit amount had been made.
Members of the committee asked how the amount of time allocated of 20 years to pay off the deficit had been arrived at and whether it was possible to extend the period of time in which Rushcliffe Borough Council had to pay off its share of the fund deficit. Graeme Muir advised that it was beneficial to all parties that deficits were paid back promptly and that extending payment periods could create further difficulties and uncertainties for the fund as well as for Rushcliffe Borough Council.
The Chairman noted that it was frustrating that the issues that had led to the deficit, as well as how the problem of the deficit had been handled were out of the control of Rushcliffe Borough Council and noted that Councillors had not received adequate information on the issue and that that there had been a lack of communication between Nottinghamshire County Council and Rushcliffe Borough Council with regard to the deficit. Keith Palframan noted that the most recent revaluation of the fund had been out of the ordinary in the results it had given, and that the next revaluation in 2019 would have much smaller impact on the funds value and the subsequent deficit amount. Councillor Purdue-Horan advised that in his experience of sitting on the Pensions Committee at Nottinghamshire County Council that Keith Palframan and his team provided an excellent and well run service but agreed that communication between Nottinghamshire County Council and Rushcliffe Borough Council on pensions matters could be improved. Members of the committee asked several further specific questions on the presentation and received verbal responses.
The Chairman and members of the committee thanked Keith Palframan and Graeme Muir for attending the meeting and answering their questions.
It was RESOLVED that:
a) the presentation be noted.
b) the Executive Manager – Finance and Corporate Services looks at potential methods and procedures to facilitate increased communication and information sharing between Nottinghamshire County Council and Rushcliffe Borough Council with regard to Pensions matters, and that these proposals be submitted to the Corporate Governance Group for consideration.