To consider
the report and approve increase in expenditure on Pension Unit staff by 2022/23.
Decision:
·
To
accept and note the information
·
To
approve the £137,929 increase in expenditure on Pension Unit staff by 2022/23:
Ø Create four new posts
Pensions Officer (to support the AVS's work)
and three Pensions Assistants (two-year contract for the McCloud project - with
a possibility of an extension should the work last more than two years)
(total annual costs £121,135)
Ø Increase the salary of six Pensions Assistants
from GS3 to GS4
(total annual costs £16,794)
Minutes:
Submitted – the report of the Pensions Manager seeking
the Pensions Committee's approval for additional resources that would enable
the Pensions Administration Unit to respond to increasing work pressures and
cope effectively with the level of work now required. To improve the efficiency
of the Pensions Administration Unit, adjustments were proposed to the existing
structure and it was highlighted that it was the Pensions Committee's
responsibility to determine the budget to ensure sufficient resources to
implement this.
It was explained there had been an increase in
the need for a deeper understanding of the pension fund's complex regulations,
and the Pension Assistant posts had been evaluated and the grade increased from
GS3 (£19,312 - £19,698 salary range) to grade GS4 (£20,092 - £21,748). When
added to the employer overheads this would be an increase of £2,799 for each of
the 6 posts (at the top of the scale) and the cost of funding the increase
would be £16,794 per year.
It was noted that Gwynedd Council and Conwy
County Borough Council had submitted an attractive option for Salary Sacrifice
Voluntary Contributions (AVCs) and consequently a major increase in the use of
this scheme was anticipated, as the Councils promoted the scheme. To address
the increase in work administrating the scheme, it was proposed to employ a new
S2 grade Pensions Officer (£24,982 - £27, 041).
When added to the employer overheads, at the top of the scale, the cost
of funding the new post would be £35,704. It was reiterated that the Fund's
major employers were realising significant savings by reducing national
insurance contributions with the AVCs Scheme - savings that were much greater
than the cost of funding the Pensions Officer post. Therefore, in principle, given the employers'
budgets and the budget of the Pensions Fund, there would be no increase in the
net budget.
Additionally, in response to the Court of
Appeal's ruling in the 'McCloud' case against the UK Government, it was
reported that the Government had now confirmed that there would be changes to
all major public sector schemes, including the Local Government Pension Scheme,
to eliminate age discrimination. In response to implementing the changes (known
as the McCloud Project), there was a need to collect information on hours
worked, and details of service breaks for all eligible employees covering the
period 1 April 2014 to 31 March 2022. In addition to updating the records,
there was a need to recalculate the death benefits, retirement benefits, and
deferred benefits of the members who had left during the past 8 years. This
would involve revisiting facts and recalculating thousands of member records.
Although the McCloud project would involve significant work for the Unit, it
was likely that only a very small number of members would see the value of
their benefits increase at the end of the project.
It was reported that a number of other pension
funds of a similar size to us had commissioned external companies to undertake
this work, but this was an expensive option as opposed to keeping the work
in-house. Several members agreed that the Fund would minimise costs by
employing three additional temporary Pensions Assistants for a two-year period
(with the possibility of extending the contract should the work continue beyond
two years) to carry out the McCloud Project work.
The Fund Director reiterated
that the recommendations
had been challenged by the
Finance Department and that they were
reasonable and unavoidable recommendations. He also noted that
although the Fund's major employers would realise significant
savings by reducing national insurance contributions with the AVCs scheme, these
would be savings for the employers and not savings for the Fund.
Thanks were expressed for the report.
During the ensuing discussion, the following observations were noted:
·
That staff efficiency
was crucial to the scheme.
·
That the option of keeping the work in-house was to be welcomed.
·
That the £85k (McCloud
Project) was a one-off amount
- we had to accept there were costs to ensure
that the work could be done correctly.
·
It was not possible to avoid the additional work - the recommendations were a means to move on in
a realistic manner.
·
The recommendations were cost effective and offered opportunities
to staff.
A member of the Pensions
Board reiterated that the Fund's administration was a priority area that required
expertise and professionalism. He was confident
that the Pensions Board would support
the recommendations.
RESOLVED:
·
To accept and note
the information
·
To approve the £137,929 increase in expenditure on Pension Unit staff by 2022/23:
§ Create four new posts
Pensions Officer (to support the AVCs work) and three
Pensions Assistants (two-year contract for the McCloud project - with a possibility of an extension should the work last more than two years)
(total annual costs
£121,135)
§ Increase the salary of six Pensions Assistants
from GS3 to GS4
(total annual costs
£16,794)
Supporting documents: