Agenda and minutes

To note the attendance at this meeting of any duly appointed Reserve Members.

Reserve Members may attend meetings:-

(i)                 to take the place of an ordinary Member for whom they are a reserve;

(ii)               where the ordinary Member will be absent for the whole of the meeting; and

(iii)             the meeting notes at the start of the meeting at the item ‘Reserves’ that the Reserve Member is or will be attending as a reserve;

(iv)              if a Reserve Member whose intention to attend has been noted arrives after the commencement of the meeting, then that Reserve Member can only act as a Member from the start of the next item of business on the agenda after his/her arrival.

RESOLVED: To note that there were no Reserve Members in attendance at this meeting.

To receive declarations of personal or prejudicial interests, arising from business to be transacted at this meeting, from:

(a)               all Members of the Committee, Sub Committee, Panel or Forum;

(b)               all other Members present in any part of the room or chamber.

RESOLVED:  To note that the following interest was declared:

Agenda Item 9 – Academies – Employer Contribution Rates

Councillor Tony Ferrari declared a personal interest in that he was a PGC student teacher at Rooks Heath College for Business and Enterprise.  He would remain in the room whilst the matter was considered and voted upon.

That the minutes of the meeting held on 17 January 2011 be taken as read and signed as a correct record.

RESOLVED:  That the minutes of the meeting held on 17 January 2011 be taken as read and signed as a correct record.

To receive questions (if any) from local residents/organisations under the provisions of Committee Procedure Rule 17 (Part 4B of the Constitution).

RESOLVED: To note that no public questions were put, or petitions or deputations received at this meeting.

Report of the Assistant Chief Executive

An officer introduced the report and explained that there were currently 7 schools within the borough who were investigating becoming an academy. Schools that wished to become academies would be deemed as a separate scheme employer under the Local Government Pension Scheme (LGPS) Regulations.  However a formal request had been made for all academies to participate in the current employer pool, which would result in a shared employer contribution rate and pension fund deficit.

The officer reported that the recommendations in the report focused on separating employer contribution rates for each academy.  Stabilisation of the contributions was not considered to be necessary.  Additionally the deficit recovery period of 20 years proposed, would allow academies to pay a reasonable contribution rate.  A proposal was also included for the costs of calculating academy specific contributions to be charged to each academy.

The officer explained that having conducted some research, it appeared that the majority of local authorities were establishing separate Employer Contribution Rates.  It was considered that the recommendations before the panel were reasonable and not detrimental to academies.

As part of the discussion on the item, representatives from Hymans Robertson provided information to the Panel on general issues relating to Academies and the LGPS.  The representatives reported that

·                     the Department for Education (DfE) had produced a briefing note which provided useful guidance on academies and the LGPS and recommended that academies had their own employer contribution rate;

·                     the DfE had recommended individual rates for academies and for academies to have responsibility for their share of the pension fund deficit.  The calculation of this deficit would have to be determined by the Council;

·                     the DfE had indicated that the pension deficit should be allocated at the outset but no guidance had been given to the calculation of the allocated deficit.  Two possible options to calculate the deficit had been provided by Hymans Robertson.  This included a deficit based on actives only and a deficit including deferreds and pensioners;

·                     the deficit including an allocation for deferreds and pensioners was considered to be a more extreme model and took into account deficits incurred as a result of staff on pensions and those who had left employment.  This model could also impose difficult administrative problems in identifying relevant deficits relating to such staff.  For these reasons the deficit based on actives only was considered to be a better, fairer and more reasonable model to calculate pension deficit;

·                     using the example of a specific school in the borough, if the first model was used, this would result in a funding deficit of £400,000 compared with £1.01million if the second model was used.  Therefore for the first model, the contribution rate would be 18.8% over 20 years compared with 21.8% for the second model.

During the discussion on this item, Members raised a number of issues which were responded to by officers as follows:

·                     it was for the Pension Fund Administering Authority to determine whether academies could participate in the current employer pool;

·                     there was a statutory  ...  view the full minutes text for item 72.

Report of the Interim Director Finance

Officers reported to the Panel that this item had been formally withdrawn from the agenda.  The item would be presented to a future meeting of the Panel.

RESOLVED:  That the withdrawal of this item be noted.

Report of the Interim Director Finance.

Officers reported to the Panel that this item had been formally withdrawn from the agenda.  The item would be presented to a future meeting of the Panel.

RESOLVED:  That the withdrawal of this item be noted.

Report of the Interim Director Finance

Members agreed that consideration of this item would be deferred to a future meeting of the Panel.

RESOLVED:  That the item be deferred, to be considered at a future meeting of the Panel.

Report of the Interim Director Finance

Members agreed that consideration of this item would be deferred to a future meeting of the Panel.

RESOLVED:  That the item be deferred, to be considered at a future meeting of the Panel.

To resolve that the press and public be excluded from the meeting for the following items of business, on the grounds that they involve the likely disclosure of confidential information in breach of an obligation of confidence, or of exempt information as defined in Part I of Schedule 12A to the Local Government Act 1972:

RESOLVED:  That the press and public be excluded from the meeting for the following item for the reasons set out below:

Report of the Interim Director Finance.

Presentation by Aon Hewitt at 8 pm.

The Panel received a presentation from representatives of Aon Hewitt, in which they detailed their Investment Advisory Services and how this would be of benefit to the Council.  During the presentation the representatives reported:

·                     that the team from Aon Hewitt that would support the Council, would contain the necessary expertise and experience;

·                     Aon Hewitt were focused on achieving success for investments and would provide the appropriate and necessary support;

·                     that they were clear about their current views on main asset classes, and this was contained within the report.

During the discussion on this item, Members of the Panel raised a number of issues which the representatives responded to as follows:

·                     there were a range of measures which Aon Hewitt implemented to standardise their approach;

·                     it was happy to provide assistance to the Panel and through discussions with officers;

·                     the organisation was happy to implement an ethical investment policy.

Members of the Panel expressed that they wished to defer the decision on whether to appoint Aon Hewitt as an Investment Advisor to a future meeting of the Panel.  The reason for this was that further discussion was required between the Panel.

RESOLVED:  That the item be deferred, to be considered at a future meeting of the Panel.

Report of the Interim Director Finance

Members agreed that consideration of this item would be deferred to a future meeting of the Panel.

RESOLVED:  That the item be deferred, to be considered at a future meeting of the Panel.

Report of the Interim Director Finance.

Members agreed that consideration of this item would be deferred to a future meeting of the Panel.

RESOLVED:  That the item be deferred, to be considered at a future meeting of the Panel.

RESOLVED:  At 9.58 pm to continue until 10.30 pm, in accordance with the provisions of Committee Procedure Rule 14 (Part 4B of the Constitution).