The Northern Ireland Assembly -

Investment Manager

Basis of Remuneration

Investment Policy

Investment Performance Objectives and Expected Return

Additional Voluntary Contributions (AVCs)

LEGISLATIVE BACKGROUND TO THE AMPS (NI) 2000

THE TRUSTEES’ REPORT

INTRODUCTION

What is The Assembly Members’ Pension Scheme (NI) 2000?

The Assembly Members’ Pension Scheme (NI) 2000 (AMPS) provides benefits for Members of the NI Assembly through the basic scheme and Ministers and Office Holders through the Supplementary Scheme. Both schemes are operated on an ‘opt out’ basis, meaning that all Members, Ministers and Office Holders are members of the scheme from the date they become MLAs unless they make a specific option not to be.

The main benefits of the scheme are:

an immediate pension of one fiftieth of final salary for each year of service on retirement at age 65;
an immediate pension before retirement age subject to certain service restrictions;
an immediate pension on retirement at any time on the grounds of ill health;
an abated pension paid on retirement at any time on attainment of age 50 and completion of not less than 15 years service;
an actuarially reduced pension paid to most former Members at any time after age 50;
a five eighths widow/ers pension;
children’s pensions (at the rate of one quarter of the basic or prospective pension of the Member if there is one child or three eighths if there are two or more children OR if there is no surviving spouse at the rate of five-sixteenths of the basic or prospective pension of the Member for each eligible child not exceeding two);
a lump sum death gratuity on death in service equal to three years salary with provision for more than one nominee;
the purchase of added years;
transfer of pension rights (into and out of the scheme);
the opportunity to contribute to an AVC scheme with an outside provider.

The legislative background to the AMPS can be found at Annex A.

Aim of this Report

In order to conform to best practice in relation to reporting requirements the Trustees must disclose actuarial and other accounting details to all members of the Fund, within seven months of the end of the accounting year (i.e. by 31 October each year).

The Trustees are pleased to present this report which has been prepared in accordance with best practice and covers the period from 13 May 2000 to 31 March 2001. The purpose of the report is to describe how the Fund and its investments have been managed during the year.

How the Trustees of the Fund are Appointed

Part B, Section B2 of the Assembly Members’ Pension Scheme (NI) 2000 states that the Assembly shall by resolution appoint not more than five members of the Assembly to be the Trustees of this Scheme.

A person appointed as a Trustee –

a) may resign from office by notice in writing to the Presiding Officer;
b) may be removed from office by a resolution of the Assembly;
c) shall, without prejudice to sub-paragraph (b), cease to hold office on the expiry of six months from the date on which he ceases to be a member of the Assembly.

Trustees Names

Mr Denis Watson MLA (Chairman)

Mr Gregory Campbell MLA (resigned 28 June 2000)

Mr Jim Wells MLA ( replaced Mr Campbell MLA on 29 June 2000, resigned 8 October 2000)

Mr Mervyn Carrick MLA (replaced Mr Wells MLA on 9 October 2000)

Mr John Kelly MLA

Mr John Dallat MLA

Mr David McClarty MLA

Information About the Trustees

The Northern Ireland Assembly Members’ Pension Fund shall be vested in and administered by the Trustees. The Trustees shall hold the assets comprised in the Fund upon trust in accordance with the provisions of the AMPS.

The procedure of the Trustees shall be such as the Trustees may determine.

The quorum for any meeting of the Trustees shall be three.

The Trustees may act by a majority of those present at any meeting.

The Trustees may employ such staff and obtain such professional advice and services
as they think necessary in connection with the performance of their functions under this Scheme.

The expenses of the Trustees in the exercise of their functions shall be defrayed out of the Fund.

Trustee Meetings

Five regular trustee meetings were held during the period ending 31 March 2001, with a number of additional meetings being held for specific purposes.

Other Parties Appointed in Connection with the Fund as at 31 March 2001.

Actuary: The Government Actuary
Investment Manager: Royal London Asset Management

The Government Actuary is appointed on a statutory basis while the Trustees were responsible for the appointment of the Investment Manager. All parties remain in place at the date of the report.

Any queries about pensions or any further information required regarding the day to day administration of the Scheme should be sent to the Secretariat at the following address:

Members Pensions Unit
Assembly Personnel Office
Annex C
Dundonald House
Belfast
BT4 3SF

Tel: 028 90 520888/525558
Fax: 028 90 520871
E-mail: evan.hobson@niassembly.gov.uk
gail.anderson@niassembly.gov.uk
alison.whitaker@niassembly.gov.uk

Income of the Fund

The income of the Fund is derived from four main sources:

i. Contributions – from Members and Holders of Qualifying Office
ii. Investments – see the Investment Report
iii. Transfers In – Members who have pension benefits in the scheme of a former employer or in a personal pension plan may be able to transfer in the benefits to the Scheme
iv. Exchequer Contributions – a Consolidated Fund contribution, calculated in accordance with the recommendations contained in the Actuary’s report under article S2 (4b), shall be paid into the Fund out of money appropriated by Act of the Assembly for that purpose.

Actuarial Valuation

The Government Actuary is required to make a report on the general financial position of the Scheme as at each subsequent reporting date, not more than three years after the date last agreed or fixed, and to recommend to the Assembly the future rate of the Consolidated Fund contribution.

The Trustees have no authority to change this recommendation.

The Government Actuary’s “Actuarial Statement”, which detailed the financial position of the Fund as at 1 July 2000, concluded that the resources of the scheme were likely, in the normal course of events, to be sufficient to meet the liabilities as they fall due. This conclusion was based on the assumption that both the Member’s and employer’s contributions would remain as at present i.e. 6% and 18% respectively.

Copies of the Actuarial Statement are available from the Secretariat.

Membership

The membership of the fund at 31 March 2001 was as follows:

Current members 100
Deferred members 0
Retired members 1
Widows 1
Widowers 0
Children 0

The benefits payable during the year amounted to £127,357. There were no changes to the benefit regulations during the period or increases to pensions in payment.

Preparation and Audit of Annual Accounts

Summary of Financial Information

TOTAL FUND AT 1 APRIL 2000:	NIL
What Went Into The Fund
Exchequer contributions receivable	£1,618,500

Contributions from Members/Office Holders (includes retrospective contributions)	£ 525,779
Transfers in from other schemes	£ 133,688
Investment Income	£ 58,550
Total	£2,336,517
What Went Out Of The Fund
Benefits Payable	£ 127,357
Refunds of Contributions	£ NIL
Transfers out of the Scheme	£ NIL
Administrative Expenses	£ 793
Actuarial Expenses	£ 38,771
Investment Management Expenses	£ 6,053
Total	£ 172,974
TOTAL FUND AT 31 MARCH 2001	£2,163,543

The Report for the period ended 31 March 2001 including the attached Investment Report and Compliance statement is approved on behalf of all the Trustees by:

Denis Watson MLA
Chairman of Trustees

THE COMPLIANCE STATEMENT

Benefits

All pensions paid in the year were authorised under the appropriate Act and thus made in accordance with the regulations of the Fund. No alterations were made to regulations governing the payment of pensions during the year.

Tax Status of the Fund

The Northern Ireland Assembly Members’ Pension Fund is a statutory pension scheme within the meaning of Chapter 1 Part XIV of the Income and Corporation Taxes Act 1988 and is an ‘approved scheme’ for the purposes of accepting transfer values.

Funding Standard

The Northern Ireland Assembly Members’ Pension Scheme is not subject to the Minimum Funding Requirement of the Pensions Act 1995. Accordingly, it is not appropriate for the “MFR” actuarial statement, which is set out in regulations and used by schemes which are subject to MFR provisions, to be adopted for the Northern Ireland Scheme.

Nevertheless, the Trustees have asked the Government Actuary to provide periodical reassurances that this level of funding would be met.

Investments

All investments are in holdings that are permitted by the regulations of the Fund. Although the Trustees cannot direct the investment strategy of the Fund in which the Assembly Members’ Pension Scheme (NI) 2000 invests, nevertheless, it will consider Socially Responsible Investment policy issues when comparing two providers who are otherwise of equal preference.

THE INVESTMENT REPORT

YEAR ENDING 31 MARCH 2001

Investment Manager

During the year the Trustees appointed Royal London Asset Management (RLAM) to undertake the Fund Management responsibilities for the Northern Ireland Assembly Members’ Pension Fund including:

(i) carrying out all the day-to-day functions relating to the management of the Fund;

(ii) the allocations of the balanced portfolio between categories of investments and for the selection of individual stocks within each category of investment;

(iii) deciding whether it is appropriate to retain or realise individual investments within the portfolio;

(iv) exercising the investment powers in such a way that will give effect to the principles contained in the Statement of Investment Principles (SIP), so far as is reasonably practicable, and in particular will have regard to the suitability and diversification of the investments within the guidelines set by the Trustees.

Basis of Remuneration

Royal London Asset Management are paid an annual management fee of 0.40% based on the value of the portfolio. As there was no investment in the Pooled Balanced Pension Fund during the period of this report no fee was payable to RLAM.

Investment Policy

The Investment Policy of the Trustees of the Assembly Members’ Pension Fund is detailed in the Statement of Investment Principles which will be reviewed every year and is available on request from the Secretariat.

The size of the Scheme’s assets, as a new scheme, is not yet sufficient to allow a widely diversified portfolio of investments were these assets to be invested directly in bonds, stocks and shares. Therefore, until the assets become sufficiently large, the Trustees believe that the most cost effective way of investing is to use one single pooled fund run by an independent investment management company.

Investment Performance Objectives and Expected Return

The Trustees have agreed expected Fund performance benchmarks within the SIP against which the performance of the Fund is assessed.

The objective is to return upper quartile performance within the CAPS (Combined Actuarial Performance Services Ltd) Pooled with Property Universe on a rolling 3 year basis. This will in effect enable the Trustees to regularly consider the performance of the Fund against a suitable peer group of similar vehicles by using surveys of managed funds measuring comparative performance over rolling 3 year periods.

Additional Voluntary Contributions (AVCs)

As members of the Scheme were required to pay retrospective contributions (9%) in respect of the period 1 July 1998 to 12 May 2000, because of Inland Revenue restrictions the facility to make additional voluntary contributions was not available throughout the period of this report.

The Trustees however are proposing to introduce a facility which will enable members to increase their pensions, within Inland Revenue limits, by paying additional voluntary contributions with effect from 1 April 2001 or from the date when all of their retrospective contributions have been paid, which ever is the later.

LEGISLATIVE BACKGROUND TO THE AMPS(NI)2000

ANNEX A

The Assembly Members’ Pension Scheme (NI) 2000 was set up on 13 May 2000 by Determination made by the Secretary of State under Section 48 of the Northern Ireland Act 1998 by virtue of paragraph 9 of the Schedule to the Northern Ireland Act 2000.

The Fund provides for pensions and gratuities to be payable to, or in respect of, persons who have ceased to be members of the Northern Ireland Assembly.