1. Pensions Forum 7 Dec 2017

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

3. 2017 actuarial valuation Background Funding Strategy Statement
2017 Actuarial Valuation Results
Employer Results
Timetable

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

5. 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

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% 6

7. 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

8. 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

9. Employer Results (1)

10. Employer Results (2)

11. 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.

12. 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
5. Data Improvement Plans
6. i-Connect

13. 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

14. 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 s exchanged between SPF and Employers
Rejection rate of 26% on data matching
Just under records had to be manually investigated

15. Problems Raised by Employers
Employer claimed didn’t receive 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

16. 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
Employer code wrong – must be 5 digit code
Unique ID’s didn’t match those on Pension system

17. 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)

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

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

20. 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.

21. 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

22. 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

23. 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)-

24. 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

25. AOB/Questions?