Minutes
Meeting of the Pension Trustees held on 15 April 2008
Present:
Mr D McClarty
Mr Jim Wells
Mrs M O’Neill
Apologies:
Mr T Lunn
Mr J Dallat
In the Chair: Mr D McClarty
In attendance:
Mr G Ballantine (GAD),
Mr E Hobson (NIA),
Mrs L Anderson (NIA), a
nd Mr H Clarke (NIA)
1. MINUTES OF PREVIOUS TRUSTEES MEETINGS
Mr McClarty welcomed Mr Ballantine to the meeting and thanked him for attending. The minutes of the Trustees meeting held on 11 March 08 were agreed.
2. MATTERS ARISING
Challenge to scheme
The Trustees were informed that a letter dated 28 March 08 was received from the former member and that legal advice had been requested from Eversheds. This advice was issued to the Trustees prior to the meeting.
Mr Wells noted that the letter of 28 March 08 referred to a meeting that was held at the member’s solicitor’s office. The letter states that the Trustees indicated that they would consider a full reimbursement of legal fees. Mr Wells, seconded by Mr McClarty, recalled that this was not the position taken by the Trustees at this meeting and requested that this be noted for the record. The Trustees agreed that a letter be drafted to the former member restating the Trustees original offer and imposing a deadline for acceptance.
Actions required:
- Pensions Administration team to draft a response to the letter of 28 March 08
- A copy of the draft letter to be sent to the Trustees for approval
Transfer of funds to new investment manager
Mr McClarty informed the Trustees that the assets held by Baillie Gifford were transferred to Prudential M&G (who will now to be referred to as M&G) on 3 April 2008.
Administrative support to the Trustees
Mr Hobson informed the Trustees that a draft memorandum of understanding between the Trustees and the Assembly Commission had been forwarded to the Assembly Legal Services office for advice. Mr Hobson added that a similar approach to administrative support has been adopted by Westminster and the Welsh Assembly.
3. SCHEME RULES AMENDMENTS
It was agreed at the meeting of 11 March 2008 that the changes to the Scheme be completed by ‘Resolution’ of the Assembly. Legal advice has advised that there is sufficient power in the Northern Ireland Act 1998 to effect these changes.
Mr Ballantine provided a brief background to the outstanding amendments arising from the Pensions Act 2004 and the Finance Act 2004. The Trustees considered a number of issues and agreed the following amendments:
Issue |
Current Position |
Proposal agreed |
|---|---|---|
Annual Pensions Increase |
Pensions in Payment are increased in line with RPI, no cap |
Remain fully in line with RPI in parity with other Parliamentary and Public Sector Schemes |
Trivial Commutation |
Pensions are paid monthly no matter how small the amount |
Amend the rules to permit trivial commutation at the Trustees discretion, within the Finance Act 2004 limits |
Additional Options at Retirement |
Pension benefits are paid (only option is commutation of part of pension) applying the same rules to all members |
No change. It was agreed that by offering additional flexibilities, it would prove complex to administer and could lead to delays in paying benefits |
Earnings Cap |
Pensionable Earnings cap in place at level of £112,800 pa (07/08). Earnings above the cap are not pensionable i.e. no pension contributions are made on earnings above the cap. |
Dis-apply the Earnings cap from 2011 to simplify administration. High earnings are not a major issue for the AMPS. |
Issue |
Current Position |
Proposal agreed |
|---|---|---|
Benefit Limits |
Members AMPS pension cannot exceed 2/3rds of their final salary. |
Retain the 2/3rds limit, in parity with other Parliamentary and Public Sector schemes |
Retained Benefits |
Benefits retained in other pension schemes and Transferred In service count towards the 2/3rds limit. |
When calculating benefit limits do not count Retained benefits but continue to count transferred in service or added years to limit liabilities |
AVC’s |
Members make additional voluntary contributions to Clerical Medical. Total pension contributions may not exceed 15% of salary. Members pay 6% contribution to the AMPS, so their AVC’s are limited to a maximum of 9% of salary. |
Continue to offer AVCs with an increased maximum limit of 15% for additional contributions. A maximum limit of 21% of salary will apply, this includes the current member contribution rate of 6% paid into the AMPS |
Added Years |
Members may purchase added years in the AMPS |
Honour any existing added years contracts but do not accept any new applications |
The Trustees also discussed the implications arising from the introduction of the Employment Equality (Age) Regulations 2006 and in particular to the removal of the Favourable Early Retirement provision, also referred to as the ‘Rule of 80’. It was agreed that further discussion would be needed on this option and that it would be re-addressed at the next meeting.
The proposed amendment to provide an ‘optional’ increase in the accrual rate from 1/50 to 1/40, at the member’s own expense (approximately 11% of salary) was discussed. Mr Ballantine confirmed that this would be an optional rule introduced to the Scheme and would be in no way compulsory. It was suggested that the change could come into effect in line with the next Assembly election in 2011. The Trustees agreed to further consider this amendment at a future meeting.
Actions Required:
- Pensions Administration team to send a request to GAD for drafting instructions for the agreed scheme amendments above;
- Legal advice has suggested that drafting of the amendments be completed either by or through GAD or by professional pension drafters – options to be investigated by the Pensions Administration team; and
- Assembly Legal Services will draft the ‘operative’ part of the resolution.
4. ANY OTHER BUSINESS
The Trustees were informed of a Freedom of Information request relating to current pensioners’ payment details. Following a discussion of the issue, the Trustees decided that pensions, as opposed to salary were of a personal nature, and it was not unreasonable for pensioners to expect that their details would not be released. Therefore, the Trustees agreed to release the following information:
- The number of pensions in payment and the total annual amount paid
- The average pension in payment
- An illustrative “maximum” pension entitlement for a member who served between 1 July 1998 and 7 March 2007
Actions Required:
- Mrs Anderson to seek further legal advice before responding to the Assembly Freedom of Information section relating the information above
5. DATE OF NEXT MEETING
The next meeting will be arranged to take place on a Tuesday before Summer Recess between 12.30 and 2.00pm.