Issue - meetings

LGPS SCHEME UPDATES AND OVERRIDING PENSIONS LEGISLATION

Meeting: 22/06/2021 - West Yorkshire Pension Fund Pension Board (Item 7)

7 LGPS SCHEME UPDATES AND OVERRIDING PENSIONS LEGISLATION pdf icon PDF 112 KB

The report of the Director, West Yorkshire Pension Fund, (Document “D”) updates the Local Pension Board on changes to the Local Government Pension Scheme (LGPS) 2014 and provides information on associated matters.

 

Recommended –

 

That the report be noted.

(Tracy Weaver - 01274 433571)

 

Decision:

Resolved –

 

That the report be noted.

 

Action: Director, West Yorkshire Pension Fund

 

Minutes:

The report of the Director, West Yorkshire Pension Fund, (Document “D”) updated the Local Pension Board on changes to the Local Government Pension Scheme (LGPS) 2014 and provided information on associated matters including:

 

Consultation on Fair Deal – Strengthening pension protection

 

A response to the Ministry of Housing, Communities and Local Government (MHCLG) on Fair Deal – Strengthening pension protection was still awaited. 

 

McCloud and valuation guidance

 

Luke Hall, the Local Government Minister had made a written statement on McCloud and the Local Government Pension Scheme (LGPS).  The statement confirmed the key changes to scheme regulations that would be made to remove age discrimination from the LGPS. The statement confirmed that:

 

·         The age requirement for underpin protection will be removed

·         A member will not need to leave with an immediate entitlement to benefits to qualify for underpin protection

·         The remedy period will end on 31 March 2022

·         The underpin calculation will be based on final pay at the underpin date, even if this is after 31 March 2022

·         There will be two stages to the underpin calculation: the first is the date of leaving, or age 65 if earlier, the second when the benefits are paid

·         The regulations will be retrospective to 1 April 2014.

 

MHCLG were expected to issue a full response to the consultation and to publish draft regulations later this year.Alongside publication of the McCloud consultation, HM Treasury announced that the pause of the cost control mechanism would be lifted and the process would be completed “next year”. The Scheme Advisory Board (SAB) would also be re-examining its results from its cost management process.

 

It had also been announced that there would be a review of the cost management process, however this would not affect the calculations completed in 2016 or 2020.

 

Annual Report for the Local Government Pension Scheme

 

The report for the year ending 31 March 2020 had been published on 28 April 2021 and key highlights contained in that report were:

·            The total membership of the LGPS grew by 261,000 (4.2%) to 6.1m members in 2020 from 5.9m in 2019.

·            The total assets of the LGPS decreased to £276bn (a change of -4.9%). These assets were invested in pooled investment vehicles (68%), public equities (14%), bonds (6%), direct property (3%), as well as other asset classes (9%).

·            The Local Authority return on investment over 2019/2020 was -4.8%. This was reflective of the market conditions during the year and set against the UK Return of -28.3%.

·            The scheme maintained a positive cash-flow position overall, including investment income.

·            Over 1.8m pensioners were paid over the year.

Resolved –

 

That the report be noted.

 

Action: Director, West Yorkshire Pension Fund