Agenda item

To consider the report and note the information

The valuation report was presented by the Pensions Manager, for information. It was reported that the officers had been collaborating with the actuary, Hymans Robertson over the past year on the triennial valuation of the Gwynedd Pension Fund. It was explained that the purpose of the valuation was to ensure that the Fund had a robust funding strategy to meet the long-term benefits obligations when setting employer contribution rates for the period between 1 April 2026 and 31 March 2029.

Reference was made to the Fund's healthy financial position and to the employer contribution rates, which would drop to 16.2% of the salary (compared with 21.8% in 2022). Attention was also drawn to the new requirement for the 2025 Valuation, which was to report on the Gender Pension Gap. It was noted that there would be a review of the changes in the regulations in an attempt to close the gap which was greatly impacted at present by the gender pay gap, which reflected different work patterns, such as part-time work. The hope was that the results of the review will be released soon.

The assumptions used in this valuation were reviewed in January 2025 and were formally approved by the Pensions Committee in March 2025. It was reiterated that, following a period of consultation with employers, the final Funding Strategy Statement had been approved by the Pensions Committee on 16 March 2026, and that the next formal valuation had been arranged for 31 March 2028.

The members thanked the officer for the report.

Osian Richards noted that the Public Service Pensions Act 2013 introduced a framework for new public service pension schemes, mainly changing it from Final Salary to the Career Average Revalued Earnings (CARE) scheme from April 2014. As part of the changes, the Act introduced a Cost Management Bill to maintain a fair balance of risk between members and taxpayers to ensure the long-term sustainability of the schemes. The measure was a statutory mechanism (Section 12, Public Service Pensions Act 2013) that comes into effect if the cost of providing benefits increases or decreases by more than the specified average of 3%, relative to the target cost. It was also noted that the LGPS had a specific cost management process for the scheme which in Wales used an employer cost cap of 14.6% and a target of 19.5% for future service.

In response to a question about the measure and whether there was an intention to revise the percentage, it was noted that it was a national issue and there had been no change since the last review. It was reiterated that within the period there had also been a change in government and therefore another reason why a national survey had not been implemented.

In response to a question about the secondary contribution rate and why there was a wide range in the percentages (from -3% to -31.6%), it was noted that the range varied by employer, due to the diversity of functions and the age range of their staff. It was reiterated that the percentage derived from a formula by the actuary.

The report was accepted and the information noted.