03 April 2024
5 min
As (hopefully) the March accounting exercise wraps up, the July (colleges) and August (academies) exercises begin. With the current high yield on UK corporate bonds, we expect a large number of employers will have a net asset in their accounting disclosure and will need to discuss its treatment with their auditor. Further information on this subject, and other aspects of the accounting exercise, are set out in the correspondence that we’ve recently shared with funds and employers. Please get in touch if you have any queries in relation to the accounting exercises.
During July we attended the second meeting of the SAB’s working group on year-end accounting. The group, which comprises of audit firms, fund actuaries, regulators and fund officers, is looking at ways to streamline the year-end accounting process in relation to LGPS employer positions. Discussions were positive with commitment to further explore areas that may reduce the number of LGPS-related queries during the preparation and audit of accounts.
The Office for Local Government (Oflog), a new performance assessment government body, has been established to support improvement of Local Government. Oflog aims to
At present, there has been no indication if this new departments reach will also extend to the LGPS.
With the expected upcoming release of both Good Governance (E&W only) and TPR’s General Code of Practice, there has never been a more pertinent time for funds to assess the skills and knowledge of their Committee and Board members. Furthermore, a call for evidence has been launched by the Department for Work and Pensions and HM Treasury to support the development of policy options for improving the skills and capability of pension trustees. Please get in touch with Andrew McKerns if you would like to discuss your training strategy, plans and support options.
The Scottish Public Pensions Agency’s (SPPA) further consultation asking key stakeholders for their views on changes to the LGPS in Scotland, relating to the McCloud remedy closed on 31st July. We responded to the consultation, with our responses in line with those given for the recent consultation on the McCloud remedy in England and Wales. You can read the consultation response here.
In order to set appropriate baseline longevity assumptions, we use Club Vita life expectancy tables (known as VitaCurves). VitaCurves are tailored to fit each individual member of the fund and therefore, take account of the specific demographic characteristics of a fund’s membership.
The latest edition of VitaCurves, based on the most recently available DB pensioner longevity data, is now available. This is the second edition of VitaCurves to include the Covid-19 pandemic period, calibrated to mortality data spanning January 2019 to December 2021. You can see what this means for longevity in your area by using Club Vita’s interactive longevity map.
This month, our digital team have continued to deliver Data Portal improvements for the Scottish valuations whilst laying the groundwork for further automated testing. We’ve also delivered some reporting improvements to the FRM application based on client feedback.
On 23 August, Craig Alexander and Adrian Loughlin are running a webinar to help academies fully understand their upcoming 31 August 2023 LGPS accounting disclosures. Our accounting experts will cover the differences between funding and accounting valuations, how accounting figures are determined and what’s changed in the accounting environment since 31 August 2022. Please do share details with your academy contacts who would be interested in attending.
The third webinar in our risk management series is available to watch on-demand. Robbie McInroy and Julie Baillie were joined by Alex Younger from Norfolk Pension Fund, for a discussion on employer investment strategies. During the webinar, we discussed how funds can use employer investment strategies to manage their risk, how Norfolk Pension Fund optimised their employer investment strategies and debunked some myths around setting up individual investment strategies. Our next webinar will focus on longevity risk – look out for the invite coming soon. We’ve also launched our risk management hub page! We’ll update this hub page throughout the year with our webinars, insights and useful resources.
The latest ONS figures over the year to June 2023 show 7.9% for CPI and 10.7% for RPI.
TPR has revised its initial guidance in light of the connection-staging 'reset'. It contains a section that explains how schemes will be expected to demonstrate how they have had regard to the forthcoming guidance on staging timelines (failing to do so will be a breach). The Pensions Dashboards (Amendment) Regulations 2023 come into force on 9 August and confirm a single, 31 October 2026 connection deadline. If you want to learn more about dashboards, an updated briefing paper is available at the Commons Library.
The Scottish Government has announced that an initial agreement has been reached with the NHS and local government over accountability arrangements for its new National Care Service (NCS). It mentions that staff will continue to be employed by local authorities, which suggests that they will retain eligibility for the LGPS, although
Following the recent SCAPE rate change, further detail is awaited.
the Government Actuary’s Department has released its third batch of updated factors for use by funds in England and Wales. These cover commutation (trivial and inverse respectively) and Scheme Pays (AA and LTA respectively) and are effective from 28 July 2023. Guidance on the transition from old to new factors is here.
If you have any questions on anything covered in this month's Current Issues in the LGPS, please get in touch.
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