employer newsletter spring 2020 - norfolk pension fund · 2020. 4. 8. · well-deserved retirement....
TRANSCRIPT
Welcome to our latest Newsletter, my first as the
new Director of the Norfolk Pension Fund. As you
may know, after being at the helm for 18 years,
Nicola Mark, has retired. I’m sure you will join me
in thanking Nicola for her inspiring leadership of
the Fund and wish her all the very best for her
well-deserved retirement.
We are living and working in extraordinary times.
The coronavirus outbreak makes this a particularly
challenging time for us all, but please be assured
that we have robust resilience plans in place to
maintain our service to you, albeit a little
differently to usual in places.
We also recognise that you may face your own
challenges, for example perhaps in providing
timely and accurate data, particularly as we
approach the 30 April year end deadline. You may
also have concerns regarding the payment of
contributions.
If you have any worries or questions regarding
these, or any other issues, please email (rather
than calling) your usual contact at the Norfolk
Pension Fund as soon as possible. Otherwise, for
member administration queries, please email
[email protected] and for strategic,
finance and contribution queries email
The coronavirus situation is also having a
significant financial impact, so I would just like to
reiterate that the Norfolk Pension Fund is a
defined benefit scheme not linked to stock market
performance. Although short term investment
values may vary, the Fund is securely managed for
the long term. Scheme members can therefore be
assured that both their contributions and their
pension, whether in payment or built up to date,
will be unaffected.
Again, please remember that we are here to help
and by maintaining good communications we can
all work together to help meet the challenges we
face during this difficult period.
Thank you, and please do
what you can to stay safe.
Best wishes,
Glenn Cossey
Director of the Norfolk Pension Fund
Employer Newsletter Spring 2020
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Investment Markets and Valuation 2019
The COVID-19 pandemic is causing unprecedented global disruption economically and socially.
The financial markets have reacted negatively and remain volatile on a day-to-day basis. Consequently the value of the Fund has fallen, demonstrating that while we have to invest in so called “risk” assets to earn the returns to fund pension payments, sometimes those risks can turn negative.
But as Glenn mentioned in his introduction, please be assured that the Fund remains a substantial and diversified pool of capital, managed for the long term, that has weathered previous downturns.
Remember we were in a similar position during the global financial crisis of 2008-9 when the value of the Fund fell substantially, but in the following decade markets recovered to reach new highs. Even during the current downturn, asset prices remain substantially higher than the depths of early 2009. And crucially, the banking sector is now also in much better health to assist with the present financial fallout.
Furthermore, governments around the world have taken quick and largely decisive action to support their economies. UK based investors, such as the Norfolk Pension Fund, holding substantial overseas assets, have also benefited from the Pound’s weakness, which has helped cushion some of the falls in underlying asset values.
When the 2019 Valuation was completed, the employer contributions payable from 1 April 2020 were set using a long term view. Despite the current investment downturn, the new contribution levels remain appropriate and will not be revised despite recent events.
In fact, the 2019 Valuation showed a substantial improvement in the funding position to near full funding at a total fund level.
Individual employers had their own positions beneath this, with the a majority benefiting from improved funding. However, some of you will have seen your contributions increase as part of smoothed long term funding plans or simply
because your payroll has grown substantially since 2016.
Importantly the funding plans of the Fund Actuary had been better than anticipated during the previous Valuation, so some previously flagged increases were not required.
Some of this improvement has undoubtedly fallen away in recent events, but the funding plans themselves remain robust.
The next Valuation is at 31 March 2022, which will set employer contribution rates from 1 April 2023. As usual this will be the opportunity to health check the approach we take.
Long standing employers will know that we set funding policies through evolution not revolution.
Employer contribution rates are calculated to smooth changes for those long term secure participants.
In 2022 we should have a much better window on the long term impact on financial markets of recent events.
For ceasing employers the Fund Actuary will still need to check if further monies are due, but this issue effects only a small number or participants. Of course, if you fall into that category, you need to consider the impact this could have on you.
If you have any questions about the Valuation or investment and funding,
please email Alex Younger at [email protected]
Page 3
Do you have any employees who are scheme
members within two years of retirement?
This is often an uncertain time for people as they
start thinking about the personal and financial
move into retirement. To help guide people
through this challenging period, Norfolk County
Council delivers a bi-monthly Pre-Retirement
Course on our behalf at County Hall.
This event is specifically designed for anyone
within two years of retiring and covers general
LGPS scheme information, the process of retiring
and information members should know before
they leave work.
The course is free to all members of the Norfolk
Pension Fund and the one-day session includes:
• Creating a new future and managing change
• Investment and finance planning
• Ideas for leisure, sporting, and cultural
activities
• Volunteering opportunities
• Information about the Local Government
Pension Scheme
Course Dates
• Thursday 23 July 2020
• Thursday 3 September 2020
Pre-Retirement Course
For more information and to book a place please contact
HR Direct, Norfolk County Council [email protected]
01603 222212
Employer Forum
The next Employer Forum will be held on Wednesday 8 July 2020 at
Norwich Professional Development Centre,
144 Woodside Rd, Norwich, NR7 9QL
To book your place, please email [email protected]
Member Completed Forms
We appreciate that scheme members may currently have
difficulty obtaining, completing and returning pension forms to
employers (for example, opt-out forms, requests for purchase of
additional pension, nomination forms etc).
We are working on solutions for these and will implement them
as soon as we can.
We will update you with more details soon.
Page 4
Early Retirement Strain Factors
Many of you will be aware that when an
employee age 55 or over retires early due to
redundancy or efficiency, there is an additional
pension cost, or pension strain, you must meet.
The Fund Actuary reviews the appropriate level of
this cost as part of each Valuation, which is
calculated using ‘Early Retirement Strain Factors’.
At Valuation, the cost of an early retirement could
go up or down depending on the prevailing
financial and demographic conditions.
The Fund Actuary has now completed the review
of these factors as part of the 2019 Valuation and
they have been implemented by the Fund for all
applicable retirements on or after 1 April 2020.
Although the exact changes in the factors are
sensitive to the individual retirement, overall there
is a small reduction in the average strain cost for
an early retirement event compared to the
previous factors in use.
The next planned update to these factors will
occur after completion of the 2022 Valuation and
be effective from 1 April 2023.
Changes to the Exit Credit Regime
There are a small number of employers where we
have to manage their cessation in the Fund.
Historically no surplus of funds were payable to
the employer on cessation but, if a deficit was
judged to exist, the employer would have to make
a further capital contribution to the Fund.
The Government amended regulations in May
2018 to address this anomaly, so if a surplus was
judged to exist by the Fund Actuary at the point of
exit, then the exiting employer could receive a
refund or ‘exit credit’.
Updated LGPS regulations came into force from
20 March 2020 regarding the administration of the
exit credits. The new regulations seek to give
Administering Authorities of LGPS pension funds
more discretionary powers when deciding if an exit
credit should be payable, and if so, how much
should be paid.
This follows the experience of some LGPS which
found exiting employers manipulated the system,
or unintentionally
benefited, from
pension risks they
were not in fact
incurring, given
other indemnities
or protections
that may have
been granted.
This was particularly the case for the relationship
between admitted contractors and letting bodies.
This did not apply to the Norfolk Pension Fund as
in October 2018 we amended our funding policy
for incoming contractors to standardise ‘pass
through’ arrangements, but we continue to have a
small number of legacy admissions that the credit
regime applies to.
We are currently taking advice to formalise our
policy in this area and when it is complete it will
form part of the Funding Strategy Statement.
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Pensionable pay banding Main Section 50/50 Section
Up to £14,600 5.5% 2.75%
£14,601 to £22,800 5.8% 2.9%
£22,801 to £37,100 6.5% 3.25%
£37,101 to £46,900 6.8% 3.4%
£46,901 to £65,600 8.5% 4.25%
£65,601 to £93,000 9.9% 4.95%
£93,001 to £109,500 10.5% 5.25%
£109,501 to £164,200 11.4% 5.7%
£164,201 or more 12.5% 6.25%
Employee Contribution Bands 2020-21
Employee Contribution Bands for 2020-21 are shown in the table below. For more information, please
see the Contributions Guide G020, which is available at www.norfolkpensionfund.org/employers/
forms-and-documents/
The Year End Return is a statutory requirement
that you as an employer must complete. The
spreadsheet you need to use is available on the
Norfolk Pension Fund employer portal.
The return must contain details of all your
employees who have been active members of the
scheme during the year.
These figures should reconcile with the total
amount of contributions that you have paid to the
Norfolk Pension Fund each month (SR71) during
the year.
The latest date for submission of the Year End
Return is 30 April 2020, but please get yours to us
as soon as possible after 1 April 2020.
Please contact us soon as possible if you have a
problem meeting the deadline.
Remember that it’s every employer’s
responsibility to ensure your return is correctly
submitted even if your payroll is outsourced.
Year End Return 2020
We’re here to help, so if you have any
questions, need help with the portal or have
problems meeting the deadline, please do not
hesitate to contact us at
Page 6
Coronavirus FAQs and Scams
The Local Government Association (LGA) has
added a COVID-19 news page on its website at
www.lgpsregs.org which includes an employer
FAQs section.
The FAQs will be updated as things develop, so
please check the pages regularly for information
on how the outbreak affects you as an LGPS
scheme employer.
In addition, the Norfolk Pension Fund, in
conjunction with the LGA, has produced a set of
scheme member FAQs which can be viewed on
our website at www.norfolkpensionfund.org/
paying-in/ under ‘Related documents’.
One aspect of the coronavirus outbreak that
possibly hasn’t received as much publicity as it
should is the opportunity it’s given fraudsters to
exploit the situation and take advantage of people
during anxious times.
Therefore, please read the article below from the
National Trading Standards and share with your
employees (as well as family and friends).
Norfolk County Council also has its own Trading
Standards team and their top recommendations
to protect yourself from scams are:
• Don’t be rushed
• Don’t assume everyone is genuine
• Check unexpected contacts with someone you
trust
• Use Norfolk Trusted Traders by visiting
www.norfolk.gov.uk/business/trading-
standards/trusted-trader
• Never click on links/open attachments in
emails/texts
• NEVER deal with unexpected cold callers
For more help, please visit:
www.norfolk.gov.uk/tradingstandards
Page 7
To help highlight to members the benefits of the LGPS, and signpost them to sources of information, we have launched a range of five posters. You can print these off locally and use to promote the LGPS to different sections of your staff depending on their circumstances. The posters are aimed at members, or potential members, at different stages of their working life.
You can download and print high resolution pdf copies of the posters from our website at: www.norfolkpensionfund.org/employers/forms-and-documents/
Please let us know if you find them useful, or if you have other resource suggestions which could help.
Approaching retirement? Promotes the Pre-Retirement Planning Course held at County Hall for members within two years of retirement.
Keep in touch with your pension online Encourages members to use the online portal to update their details, check their benefits and use the personal pension calculator.
Planning your future? Aimed at members who are starting to plan for their retirement.
Want to boost your pension? An overview of the options available to increase pension benefits.
Thinking about your pension? Targeted at new employees and joiners, highlighting the benefits of the LGPS pension scheme.
Posters
Page 8
We’ve been keeping you up to date regarding the
McCloud case and its impact on the Local
Government Pension Scheme (LGPS).
As a reminder, the introduction of the 2014
scheme gave transitional protections to scheme
members within 10 years of their retirement age
at 2012. These protections allowed a member to
receive, for service accrued from 1 April 2014, the
best of a 1/60th final salary benefit or a 1/49th
CARE (career average revalued earnings) benefit.
The McCloud case (as well as other cases) was
brought against the Government, claiming that
these and similar protections were age
discriminatory. The courts found in favour of the
claim.
The latest news is that Lord Agnew, Minister of
State at the Cabinet Office and Her Majesty's
Treasury, has made an announcement that
confirms that no qualifying scheme member will
need to make a claim for the remedy to apply to
them.
This automatic protection is an important feature
as there are a number of companies who are
encouraging scheme members to make
unnecessary and costly claims.
The full ministerial statement can be viewed on
the Parliamentary website at www.parliament.uk.
For more information on the latest McCloud
developments, please visit the SAB website.
The McCloud Case
Just a reminder of the importance of keeping your Employer Pension Policy
up to date. Your Employer Pension Policy should be sent to
[email protected] within one month of joining the scheme and
as soon as possible after making any update.
For more information please see the Employer Pensions Policy Guide (G60)
available at www.norfolkpensionfund.org/employers/forms-and-documents
under the ‘Guides’ tab.
The Policy usually specifies the person that your
employees should contact in the first instance of
any dispute.
For more information about managing Internal Disputes please refer to
the ‘Employer IDRP Guide (G070)’ by visiting
www.norfolkpensionfund.org/employers/forms-and-documents under
the ‘Guides’ tab.
There is also a ‘Scheme Member Guide to disputes’ available at
www.norfolkpensionfund.org/about-us/complaints-and-disputes.
Employer Pension Policy and Internal Disputes
Pensions Committee News
The Pensions Committee has met twice since our Autumn Newsletter, on 3 December 2019 and 25 February 2020.
Alongside its regular oversight of investment and administration performance, and progress reports on the ACCESS investment pool, the Committee: • received an overview of the Pensions
Regulator (TPR) requirement for increased reporting and compliance by LGPS
• confirmed the recommendation to appoint Brian Wigg as the Independent Chairman of the Pensions Oversight Board
• reviewed the Norfolk Pension Fund Risk Register
• received an update on the Norfolk Pension Fund Governance Review
• considered the Government announcement banning public institutions from organising boycotts, sanctions and disinvestment against other countries
• approved the Norfolk Pension Fund 2020-21 budget
• noted the content of the Corporate Governance and Stakeholder Engagement Report
The Committee next meets on 7 July 2020.
Pensions Committee papers are published on the Norfolk County Council website.
Norfolk Pension Fund Governance
Norfolk County Council, as Administering
Authority of the Norfolk Pension Fund, delegates
its pensions functions to Pensions Committee to
administer the scheme on behalf of all
participating employers and scheme members.
All public sector pension schemes are also required
to have a local pensions board (known in Norfolk
as the Pensions Oversight Board), to assist the
Administering Authority in ensuring the effective
and efficient governance and administration of the
scheme.
You can find more details about the Norfolk
Pension Fund governance arrangements in our
Governance Strategy Statement which can be
found on our website at:
http://www.norfolkpensionfund.org/
governance/the-pensions-committee/
Page 9
Norfolk County Councillors
Judy Oliver (Chairman)
Danny Douglas
Tom FitzPatrick
Martin Storey
Brian Watkins
District County Councillors
John Fuller
Alan Waters (Vice Chairman)
Staff representative
Steve Aspin
Please remember that you should use the Employer Portal to securely access a number of online forms including:
• Retirement Estimate Request
• Retirement Discretions
• Advance Warning of Retirement
• Auto Move from 50/50 to Main
• Notification of unpaid leave/absence
• Leaving Pensionable Employment
• Change of Contractual Hours
• Secure Message Form
For help with online services or to register,
please email [email protected]
Pensions Oversight Board News
Brian Wigg (pictured right), who many of you will
know from his time as the retired scheme member
representative on the Pensions Oversight Board,
has recently taken up the role of Independent
Chairman of the Board.
As a result, we are delighted to welcome back
Peter Baker (pictured far right) to the Norfolk
Pension Fund. Peter has been elected as the new
retired scheme member representative on
the Board.
Peter has a wealth of experience of the Norfolk
Pension Fund having served for many years in the
past as the scheme member representative on
the Pensions Committee.
The Board meeting held on 10 December 2019 was
attended by Richard Davidson, Deputy Clerk of
Downham Market Town Council. The purpose of
Richard’s attendance was to give the Board, and
the Norfolk Pension Fund officers present,
feedback from an employer perspective on the
service and communications received from the
Fund.
Amongst the many excellent proposals Richard
made, one was to hold a supplementary Employer
Forum to the west of the County for employers
unable to attend the regular events held in
Norwich.
As you will know we subsequently arranged a
Forum in Downham Market on 25 March, but this
had to be cancelled because of the coranavirus
restrictions. However, we hope to reschedule for
later in the year, in addition to our next Norwich
Forum, which is due to be held on 8 July 2020.
For more details on Richard’s feedback to the
Board, you can view the notes from the meeting
published on our website at
www.norfolkpensionfund.org/governance/local-
pension-board/.
Minutes from the most recent meeting of the
Board held on 25 February 2020 are also available
on the website.
Online Services
Page 10
Page 11
Recently Retired Members Survey
In February we wrote to over 300 scheme
members who had retired between October 2019
and January 2020 asking them to complete a
survey to get their feedback on their experience of
the retirement process.
Of those who responded, over 95% said that
overall they were ‘Very satisfied’ or
‘Satisfied’ (with 77% being ‘Very satisfied’) with
the help received from the Norfolk Pension Fund.
Similarly, when asked ‘How satisfied were you
with the help from the Norfolk Pension Fund with
queries or questions’ again over 95% were ‘Very
satisfied’ or ‘Satisfied’.
Some of the comments included:
• ‘Communication was very good and I was very
surprised with the ease of the whole process.
• ‘Efficient. Quick. Excellent communication.’
• ‘Experienced, knowledgeable staff who could
answer any queries. Having one person to
contact via telephone/letter. Prompt replies.
You did what you said you would do.’
• ‘Whenever I contacted the service, whoever I
spoke to was able to deal with my query
effectively. Calls answered very quickly.’
• ’Very professional. Very nice telephone
manner. Very helpful.’
Procuring Services National LGPS Frameworks
If you need to access specialist pensions advice
or services, independent of the Norfolk Pension
Fund, the National LGPS Frameworks can help.
A procurement framework is an agreement put in
place with a provider, or range of providers, that
enables buyers to place orders for services
without running lengthy full tendering exercises.
Frameworks are based on large volume buying,
so you can benefit from reduced costs delivered
through national buying power, but you select
your preferred supplier from those available.
National LGPS Frameworks has helped deliver
£119m of savings across the LGPS since the
National Frameworks programme was established
in 2012.
The service can help reduce procurement
timescales and costs dramatically.
Services that can be purchased through LGPS
National Frameworks include Third Party
Administration, Transition Management, Legal
Services and Stewardship Advisory Services.
For more information please call 01603 495922 or
email [email protected]
Alternatively visit the website at
www.nationallgpsframeworks.org
Norfolk Pension Fund Lawrence House 5 St Andrews Hill
Norwich NR2 1AD
During the coronavirus lockdown, please contact us by email in the first instance. This helps us to provide you with a more efficient service. Thank you.
Pensions Administration [email protected]
01603 495923
Investment, Accountancy and Actuarial Services [email protected]
01603 222139
Website, Technical and Employer Queries [email protected]
01603 222132
www.norfolkpensionfund.org
Page 12
If you would like this newsletter in large print,
audio, Braille, alternative format or in a
different language, please email
[email protected] or call 01603 222824
Outsourcing?
Just a reminder that if you are considering options for reshaping and/or reorganising your service delivery, such as outsourcing, please let us know at the earliest stage of your planning.
What you are considering could have significant pension implications…
We can help you understand these and take account of them upfront, for example considering what pension information you may need to include in your tender documentation.
If you are considering making any changes to your service delivery, please contact
Alex Younger at [email protected]
Contact Details