To receive an update from Kevin Taylor.

Kevin Taylor (RBWM) gave an update on the above titled item. Firstly, it was outlined that the Local Government Pension Scheme (Miscellaneous Amendment) Regulations 2018 had now delegated powers to the Secretary of State to issue guidance. MHCLG now had powers to issue guidance without statutory provision in place. Members were informed that there had been a removal of requirement for employers to consent to early release of benefits for those employees with deferred benefits aged 55 years and over. It was noted that employer discretion could be applied to waive any actuarial reduction but the employee no longer needed employer consent to withdraw benefits at a reduced rate. Members were informed that regulation 4 came into effect as of the 17^th April 2018. Members discussed whether this date had taken into the consultation phase and whether the publication date had any adverse impact on the regulation.

Members discussed the Local Government Pension Scheme- Actuarial Guidance and early retirement reduction factors  had changed from the 8^th January 2019.  The percentage reduction had been reduced for both female and males and have been aligned to remove any perceived sex discrimination. Neil Wilcox highlighted that the ‘Local Government Pension Scheme- Actuarial guidance’ had been dated as the 29^th April 2016, it was confirmed that this was an administration error and that the document had been received earlier this year.

Members were informed that the Government had published a written statement which announced a pause in the cost cap process for public service pension schemes pending the outcome of the application to appeal the McCloud case to the Supreme Court. The Board were told that the LGPS Advisory Board would now consider whether, given this announcement,  it should withdraw the benefit change recommendations that had been made to the MHCLG as a result of its own cost cap process. It was outlined that if the McCloud principle was upheld that it would be required to make changes to the underpin and that such changes would need to be taken into account by SAB when reviewing its own cost cap calculations. It was noted that all changes that had been scheduled were now on hold and would resume once the judgement had been made upon the McCloud case.

It was also highlighted that the initial SAB proposals to bring the scheme cost back to 19.5%  had included the removal of third tier ill heath retirements, the introduction of a minimum death grant of £75,000 and an adjustment to the two lowest employee contribution bands.  A further adjustment to bands 5 & 6 were proposed to remove some tax relief anomalies.. Members were told that the outcome of the McCloud case may mean that the scheme improvements though currently  paused  may still take affect and would possibly need to be backdated (with Government approval) to 1^st April 2019. It was the duty of the employer to adjust employer rates and that this would require a higher level of administration work. The Panel agreed that these prospective changes/amendments seemed reasonable and that they should have been carried out earlier if possible to ensure that losses were mitigated. Board members queried whether information had been sent out to all employers and it was confirmed that all employers had been sent communications informing them to remain within their current bandings.

Members were told that the ‘Fair Deal consultation’ paper would run until the 4^th April 2019. If introduced the option of a broadly comparable pension scheme would be removed. One option proposed was to use the deemed employer route meaning that  the outsourcing employer would retain responsibility for the pension liabilities. There had been evidence independent service providers increase costs of their service to account for pension costs and it is hoped that Fair Deal will help to provide best value for money for the outsourcing employer. This step may remove closed employers and allow further contributions to be made. It was outlined that the consultation  extends the definition of  a protected transferee. It was noted that there had been some forecasted issues with poor advice and whether the LGPS was suited to private sector businesses.

ACTION- That Kevin Taylor circulate the draft response to the Fair Deal consultation to all Board members.

Members were reminded of the upcoming elections and the change in Panel Members. It was highlighted that training would be needed for these new members, and that there would also be a change to the Advisory Panel Members.