Issue - meetings

Mr Towey from Hertfordshire County Council provided Members with an overview of the Local Government Pension Scheme (LGPS).  He explained how the LGPS was administered at a local level by a Pension Committee, via investment managers, who managed a fund of £3.6bn in assets as at 31 March 2016.  Mr Towey explained that the Hertfordshire Fund comprised 279 employers with 95,995 members. 

It was noted that the fund was valued every three years to test its solvency and to review individual employers’ situations, the objective being, that an employer’s fund needed to be fully funded over a 20 year period.  At the time of the last valuation in March 2013, East Herts was 79% funded.  He explained how the proportion of current staff, staff who have left local government and retired staff affect the funding level, including the impact of an aging workforce profile.

Mr Towey explained governance and administration arrangements and the regulations in relation to funding and the valuation of assets and liabilities / investment strategies.  He referred to the Government’s request that all LGPS schemes consolidate and pool their assets to reduce costs, and make savings.  It was noted that the Hertfordshire Fund was working with other Funds in the South East and East of England (ACCESS) had put forward their pooling submissions to the Government.  It was estimated that it could make savings in the region of £25.5m by 2033, which would be channelled back to the employers. 

In response to a query from Councillor J Kaye regarding new entrants to the LGPS, Mr Towey provided a summary of employers’ responsibilities.

In response to queries from Councillor B Deering and Councillor M Pope, Mr Towey confirmed that the Council’s fund was ring fenced and the implications on the Council of paying large additional sums over a three year period.

Councillor M Casey queried discount and deficit values.  The issue of higher interest rates and the impact of the deficit values were debated.  Mr Towey stressed that the issue of the Council being fully funded needed to be viewed in the context of a 20 year period.  The Head of Strategic Finance and Property explained that the Council’s assets totalled £89m, its liabilities £117m and that there was a deficit of £28.7m.

Mr Towey stated that the Fund was currently being valued by the Scheme actuary and that individual employer results would be available from November 2016.

The Committee received the report.

RESOLVED – that the report be received.