The report of the Director, West Yorkshire Pension Fund (Document “B”) provides an update 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)

The report of the Director, West Yorkshire Pension Fund (Document “B”) provided an update on changes to the Local Government Pension Scheme (LGPS) 2014 and information on associated matters.

The report included consultation on a number of proposals from the Ministry of Housing, Communities and Local Government (MHCLG).  Those consultations were on Fair Deal – strengthening pension protection; Revised Late Retirement Factors; Local Valuation Cycle and the management of employer risk.  WYPF’s responses to those consultations were appended to the report.

The effect of those proposals were reported and it was explained that the greatest impact would be from changes to the valuation cycle.  Members were reminded that WYPF’s three yearly valuation was out of kilter with other public sector pension schemes and the proposals were to move to a four yearly (quadrennial) cycle.   It was explained that as this was a policy consultation if it was decided to proceed there would be further consultation on the changes.

Document B advised Members of the impact of the case known as the McCloud judgement and that the government not been granted leave to appeal against a judgement that changes made by the government to the pensions of Judges and Firefighters were discriminatory on the grounds of age, race and equal pay.    It was expected that the case would be considered by an employment tribunal but that the case would take significant time to be concluded.

An Employer Representative explained that auditors had stated that they could not guarantee that a full valuation would not be required from employers.  The cost of that valuation would be substantial but rather than risking the need to make late adjustments it had been decided to go ahead with that valuation.  She was concerned that other smaller employers may be in the same situation and concern was expressed that employers may commence a full valuation and the courts come to a different conclusion on the case.

In response it was explained that employers should take advice from their actuaries who would make a professional judgement.

It was questioned if the judgement could effect payments already being made and it was confirmed that recalculations of the payments to retired members would be required. 

A Member questioned if the fund gave consideration to climate change issues when investments were considered.  He was advised that there had been discussions by the Pension Board on that topic in the past.  WYPF, at the Investment Advisory Panel, considered the climate change programme each autumn and had been instigators of motions to Shell; BP and other large companies to ensure they produced business plans in line with the Paris Agreement.  WYPF was part of the Pension Fund Forum and worked with Church Commissioners and others as part of the Climate 10C.  This involved all the largest investors influencing the biggest 100 employers across the world.   It was reported that there would be information included on the Fund’s website this autumn and agreed to circulate briefing notes for Members on the Climate Change Programme and Fossil Fuels.

Resolved –

That the report be noted.

ACTION: Director, West Yorkshire Pension Fund