The Joint Pensions Committee met to formally adopt its terms of reference and approve decisions made by the Joint Pension Panel. The committee also reviewed and approved the revised Funding Strategy Statement and the 2016 Pension Fund valuation, which will lead to adjusted employer contribution rates.

Terms of Reference

The committee formally adopted its terms of reference, which had previously been endorsed by the Joint Pension Panel and approved by the Council. These terms of reference outline the committee's overall responsibility for the administration, management, policies, investment, and actuarial valuation of the pension fund.

Report from the Joint Pension Panel

The committee noted the minutes from the Joint Pension Panel meetings held on 27th June 2016, 26th September 2016, and 30th November 2016. It also formally approved the decisions made at these meetings. These decisions included adopting the Statement of Investment Principles with amendments regarding the Stewardship Code and changing references from Council to Councils where relevant. Additionally, the Discretions Policy was adopted as the Pension Fund's policy statement concerning the abatement of pensions on re-employment and other specified discretions.

Funding Strategy Statement

The committee approved the revised Funding Strategy Statement (FSS). This statement, which the actuary must consider when determining employer contribution rates, has been updated to reflect the merger of the Richmond and Wandsworth Pension Funds following the commencement of the Shared Staffing Arrangement (SSA). The FSS outlines the approach to managing the risks associated with pension fund valuations and determining the period over which any surplus or shortfall is to be spread. The Assistant Director of Resources (Financial Services) noted that only one written response had been received from employers regarding the statement, which pertained to individual employer rates rather than the SSA.

Pension Fund Valuation 2016

The committee agreed to the contribution rates determined by the 2016 Pension Fund valuation, which will take effect from April 2017. The valuation, the first to incorporate the assets and liabilities of the Richmond Pension Fund following the SSA, has resulted in a revised discount rate of 4.7% per annum.

For Wandsworth, the overall employer contribution rate for staff employed within the SSA and locally employed staff in schools will drop from 19% to 18%. For Richmond, the rate for non-SSA staff will remain at 24.4%, which includes a deficit contribution rate of 6.4%. The Director of Finance explained that the role of the Joint Pensions Committee was to agree these contribution rates, with the financial implications for Council budgets to be considered by Richmond's Cabinet and Wandsworth's Executive.

The report highlighted that the financial effects on Wandsworth would largely fall to the General Fund, and the Director of Resources confirmed that the Richmond element would also be funded from the General Fund. The actuary for the merged Richmond and Wandsworth Pension Fund uses a different approach to the previous actuary for the Richmond Pension Fund, which has led to a reduction in deficit contributions for Richmond despite the need for them.

The committee also agreed to delegate to the Director of Finance, in consultation with the Director of Resources, Committee Chairman, and Vice-Chairman, the authority to agree other employer rates. The deficit recovery period for the Richmond Council Pool was set at 12 years.

Dates of Future Committee Meetings

The committee noted the scheduled dates for future meetings in 2017: Tuesday 7th March, Tuesday 23rd May, Thursday 7th September, and Wednesday 29th November. The next meeting was confirmed for Tuesday 7th March 2017.