Members were provided with a presentation from P Middleman and J Perera at Mercer on the Actuarial Valuation 2016.  Members noted the following provisional results in terms of the contributions required from employers:-

·             An initial meeting had been held with the district councils on                                         19 September 2016, in relation to affordability.

·             The Fund objectives were to achieve a 100% solvency level within a reasonable timeframe, to maintain sufficient assets to pay all benefits as they arose and to have a sufficiently prudent funding plan to protect against downside outcomes.

·             The Fund was maintaining a direct link with inflation.

·             The allowance for future 50/50 scheme membership would be removed.

·             Mercer would continue to work with the Fund to ensure that any refinement of data from the small funds was undertaken.

·             Life expectancy analysis had indicated a reduction from last time of approximately 0.2 years for current pensioners in South Yorkshire.

Across the board, male life expectancy was improving quicker than female life expectancy.

·             South Yorkshire continued to have a lower rate of ill-health retirement compared with other LGPS areas.

·             The short term pay figure assumed that it was incorporated for all employers at 1% for 4 years, which was unlikely to be the case in practice.

·             Thought was required on how to develop the contribution plans, to ensure the financial health of the Fund was kept on an even keel moving forward.

·             A funding strategy statement would be brought as part of the consultation.

·             A formal consultation process would commence between now and the employer meeting at the end of November 2016.  This would be extended to all employers as part of the overall governance arrangements, with a view to signing off the valuation at the end of March 2017.

Councillor Sangar referred to the valuation data and in particular the 2,350 active members with a missing CARE salary.  He queried how this valuation compared with previous valuations.

G Chapman commented that as a result of the CARE Scheme there was a greater emphasis on ensuring that the contributions and pay data was accurate with only a short period of time. In recognition of this the new administration strategy penalised employers who submitted their annual return after the deadline employers and this has brought about an immediate improvement with 93% of returns at the end of May 2016.

Councillor Sangar queried Mercer’s position in terms of communication with the four district authorities.

P Middleman referred to a number of meetings held over the summer period in relation to budgeting and other pressures faced by the district councils.  Mercer had last met with the district treasurers on 19 September, and would meet with them today in order to reach a sensible position for all parties.  Members would be provided with an update in due course.

Councillor McHale referred to the budgetary pressures faced.  He anticipated that the main authorities would be looking for a tapering down of recovery periods and percentage contributions. 

P Middleman commented that the assumptions on pay growth were still incomplete.  Mercer was talking to treasurers about the individual budgets; a key aspect would be to modify some of the contribution patterns, together with keeping watch on what could happen in the next 3 years.

Councillor Wraith congratulated G Chapman, F Foster and the other three district treasurers, on behalf of the Authority, for all of the work provided.

Councillor Ellis thanked Mercer for an informative presentation.

RESOLVED – That Members noted the presentation.