Pension Fund Valuation 2022.
(Representatives from the Fund’s
Actuary Hymans Robertson will attend the meeting to present this item)
Minutes:
A presentation from the Fund’s Actuary Hymans Robertson was
given on the Pension Fund Valuation for 2022. A copy of the presentation is
filed with these minutes.
The Chair welcomed Mr Tom Hoare and Mr Steven Tart who had
joined the meeting online for Hymans Robertson. He thanked them for their
attempts to attend the meeting in person which had been prevented due to bad
weather.
Arising from discussion the following points arose:
i.
The funding level for the Leicestershire Fund had
increased to 105% as of 31 March 2022.
ii.
There was a regulatory requirement to undertake a
valuation every three years. There were various assumptions as part of each
valuation exercise, and each subsequent valuation was a good opportunity to
analyse how those assumptions had borne out in practice.
iii.
Funding level represented a snapshot of the Fund
and was currently at 105%.
iv.
Completion of the valuation was scheduled for 31
March 2023, when new contribution rates would come into effect.
v.
There had been no significant changes in
assumptions since the last valuation, except for CPI inflation, which was used
each year to increase members’ pensions, and was a long-term assumption, with
the average level of future inflation having increased from 2.3% to 2.9% over
the 20-year time horizon.
vi.
Different life expectancies across different
regions of the Fund were another assumption that fed into calculations.
vii.
The impact of the McCloud judgement from a funding
perspective was relatively small at 0.2% of liabilities but was a huge exercise
from an admin perspective.
viii.
There was balance between risk and affordability to
ensure that employers were not paying too much but also that members’ benefits
were being protected. There was a regulatory requirement for prudence which was
set at 75% as a target for employers to meet.
ix.
Employee representatives acknowledged that the
performance of the Fund as of 31 March 2022 was a point in time and that a lot
had happened in the world since then, with markets continuing to fluctuate and
further periods of uncertainty and volatility expected.
RESOLVED:
That the contents of the Pension Fund Valuation 2022 report and presentation be noted.