Pensions Forum 7 Dec 2017

AGENDA 2017 Actuarial Valuation Employer Engagement 2018 Year End Digital Technical Round-up AOB

2017 actuarial valuation Background Funding Strategy Statement 2017 Actuarial Valuation Results Employer Results Timetable

Funding LGPS 2015 1/49th (CA) LGPS 1/80th +3/80ths (FS) LGPS 2009 1/60th (FS) LGPS 2015 1/49th (CA)

Funding Strategy Statement Funding Mechanism: 3 sources - investment returns - employee contributions - employer contributions Funding Level = Market Value of Assets Present Value of Liabilities Aims of the Fund: • ensure that sufficient resources are available to meet all liabilities as they fall due; • enable employer contribution rates to be kept as nearly constant as possible and at reasonable cost to the taxpayers and employers; • manage employers’ liabilities effectively; and • maximise the returns from investments within reasonable risk parameters. Contributions The contributions strategy aims to ensure that the target funding level is achieved at both Fund and employer level in a manner which is fair and affordable for employers. 5

Actuarial Valuation 2017 Results Funding 2014 (£bn) 2017 Market Value of Assets 14.0 19.7 Past Service Liabilities 14.8 18.8 Surplus/(Deficit) (0.8) 0.9 Funding Level 94.3% 104.8% 6

Actuarial Valuation 2017 Results Funding 2014 (£bn) 2017 Market Value of Assets 14.0 19.7 Past Service Liabilities 14.8 18.8 Surplus/(Deficit) (0.8) 0.9 Funding Level 94.3% 104.8% Employer Future Service Cost 2014 2017 % of pensionable payroll 19.9% 28.5% 7

Funding Strategy Statement Funding Objective The Fund has a funding objective of having a combined investment and funding strategy that deliver an acceptable probability of achieving the funding target within the average future working lifetime of employee members. The funding target (amount of assets compared to liabilities expressed as a percentage) is at least 100% using appropriate actuarial assumptions. The target funding period and recovery period for any deficit is the weighted average future working lifetime of the active membership – around 14 years. There are many inherent uncertainties in the funding process and a wide range of possible outcomes. It is acknowledged that the actual funding level will fluctuate as a result. The funding strategy therefore targets at least a 2/3rds probability. 8

Employer Results (1)

Employer Results (2)

Timetable December 2017 Individual employer results schedules issued. Funding Strategy Statement issued for consultation. February 2018 Consultation on FSS closes. March FSS approved by the Committee. Actuary’s report received by the Committee. Final reports signed off by the actuary. April Revised employer contributions take effect.

Employer Engagement Ensure timely and accurate data is received Resolve issues at source Automate flow of information on a monthly basis Individual one to one meetings karen.sweeney@fs.glasgow.gov.uk 0141 287 7493 5. Data Improvement Plans 6. i-Connect

2017 Year End Pension Regulations specify that:- Employers must submit their Year End Return by 30th June SPF must issue Annual Benefit Statements by 31st August Failure to comply with above is considered a Breach and could result in SPF reporting to TPR

2016/17 Year End Returns SPF expected 183 Year End Returns 66 Employers missed SPF deadline of 12th May 20 Employers missed 30th June statutory Deadline Only 46 submissions were immediately actionable = 24% Approx 1000 emails exchanged between SPF and Employers Rejection rate of 26% on data matching Just under 24000 records had to be manually investigated

Problems Raised by Employers Employer claimed didn’t receive email from SPF so didn’t know return was due Forgot to complete return Person who normally completes it is off sick and no-one else knows how to do it Employers thought they only had to complete Year End return so didn’t send CARE Return, Reconciliation Sheet or Compliance Certificate

Issues with Files File format on template changed:- Columns added/deleted N/a entered in empty cells Missing dates Percentage sign in contribution rate column Not all files submitted in one email Employer code wrong – must be 5 digit code Unique ID’s didn’t match those on Pension system

2018 Year End Requirements Scheme Actuaries (GAD) require funds to report on fund transactions. Requires employers to supply new information as part of their year end submissions Employee contributions split between Main and 50/50 sections of the scheme Employer Contributions Employee Additional Pension Contributions (APCs) separated from Added Years/Arcs Employer Shared Cost Additional Pension Contributions (SCAPC)

Digital SPFOnline Employer Services demo Responsive (mobile / tablet) www.spfo.org.uk Developing SPFOnline 35,000 Employees 11,000 Deferreds 16,000 Pensioners use the existing version Calcs / Content Management System / Bulk emails Becoming a pensioner process Using each member contact / push via employers SFTP / email options

Technical round up General Data Protection Regulation Consultation on new regulations Misc- Budget, Ill health guidance & Assumed Pensionable Pay.

The EU General Data Protection Regulation (GDPR) Applies from 25 May 2018 Aim is to give EU citizens back control of their personal data and simplify the regulatory environment across Europe.

What is processing personal data? The DPA and the GDPR regulates the ‘processing’ of personal data Processing covers obtaining, recording or holding the information/data or carrying out any operation on the information/data Very wide definition of processing and covers nearly anything that you might think of doing with personal data

Record Keeping/Data Sharing Agreements. There will be an obligation to maintain internal records of data processing activities In preparation, SPFO will need to establish clear records of all data processing activities. Work required to update data sharing and data processing agreements Data sharing clauses in contracts will also need to be updated

Consultation – New Regulations Draft – The Local Government Pension Scheme (Scotland) Regulations 2018 Retirement from age 55 without employers consent Assumed Pensionable Pay- more discretion for employers Freedom & Choice in Pensions (AVCs)-

Miscellaneous HM Budget – Very little change for pensions – increase in LTA. Ill health retirements – SPPA guidance, new templates to assist in appeals process. Assumed Pensionable Pay V Notional Pay

AOB/Questions?