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Suffolk Pension Fund

Suffolk Pension Fund. Annual Employers Meeting 21 September 2018 Craig Alexander Hymans Robertson LLP Craig.Alexander@hymans.co.uk. Today. 2016 valuation to now 2019 funding valuation Employer strategies and timetable Hot topics. Please ask questions as we go along.

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Suffolk Pension Fund

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  1. Suffolk Pension Fund • Annual Employers Meeting • 21 September 2018 • Craig Alexander • Hymans Robertson LLP • Craig.Alexander@hymans.co.uk

  2. Today • 2016 valuation to now • 2019 funding valuation • Employer strategies and timetable • Hot topics Pleaseask questions as we go along

  3. Different pension costs • The long term cost of the scheme • The payments needed by the Fund each year to meet this long term cost • The impact on the company accounts the actual benefit payments thecash contributions FRS102 (or IAS19) disclosure costs

  4. 2016 valuation to now

  5. 2016 Suffolk Pension Fund valuation results

  6. What’s happened since… • … but this is not the full picture. • 6 months to go until 31 March 2019 • Impact of 3 years worth of membership experience? • All employers are different! • Future expected investment returns?

  7. 2019 funding valuation

  8. LGPS Fund level 6.Governance Suffolk Pension Fund Funding Strategy Statement (FSS) AdministeringAuthority Councils Academies Colleges Suffolk County Council

  9. Purpose of the funding valuation • To estimate how much money (cash) will be needed to pay the pensions • Estimate is based on assumptions • projected amounts of benefit payments • projected probability of benefits being paid • Check financial health of employers • Set contributions for period 1 April 2020 to 31 March 2023 Cost of Benefits Investment Returns Employer Contributions Employee Contributions Benefits and employee contributions are set by Regulations

  10. Assumptions Amounts paidProbability of payment Financial Investment return Inflation Pay increases Looking at: Economic outlook Actual Fund assets Historical pay growth Demographic Life expectancy Retirement age and cause Withdrawals Looking at: Population trends Members’ lifestyle factors Past Fund experience

  11. A balancing act Contributions • Higher expected investmentreturns… • … mean less cashconts required from employers … • … but means more risk to the Fund … Investment returns

  12. Employer strategies and timetable

  13. Risk based approach Need a good chance of meeting funding target to be prudent 2019 2022 2025 2028 2031 2034 2037 2040

  14. Setting employer contribution rates

  15. Continue to stabilise secureemployers? 40 30 20 10 Source: Hymans Robertson LLP, comPASS, sample output

  16. 2019 draft timetable

  17. Hot topics

  18. Importance of correct and timely data LGPS Employer Pension Fund Actuary Actuaries’ Universal Data Extract c.600 payroll providers tPR involvement

  19. LGPS Review of Academies National Scheme Advisory Board are reviewing the treatment of academies in the LGPS: • Protect the benefits of members through continued access to the LGPS • Prevent LGPS being a barrier to the Academisation programme • Improve administrative efficiency and effectiveness • Increase accuracy and reliability of data

  20. Unfunded Public Sector Schemes Treasury announcement on these schemes • Valuation results – employer contributions • Cost management results – members’ benefits up …but LGPS is different • Valuation – LGPS has assets (is funded) and has a 3 yearly cycle • Cost management – LGPS has additional cost management mechanism Prevent LGPS being a barrier to the Academisation programme • Improve administrative efficiency and effectiveness • Increase accuracy and reliability of data Implications for LGPS – unknown ?

  21. Craig.Alexander@hymans.co.uk

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