Barnet UNISON submits report on risks to Pension Fund to Councillors
Dear Councillors
On 21 June 2011, I wrote to the deputy chief executive in his role as section 151 officer expressing concern about the impact of the One Barnet programme on the future viability of the scheme. In those email exchanges I noted the following risk identified in the One Barnet Highlights report which went to Budget and Performance Overview and Scrutiny Committee 21 June 2011.
Risk Number CP0010 : The negative affect on the Pension Fund due to loss of payees
CAUSE: Use of GAD over ABS and abolition of workforce code of practice
Consequences of risk: Potentially reduced pension fund thus raising the necessity to find finances from elsewhere
Mitigation Action
Meeting with Actuaries to greater understand the effect Meeting was held with the actuaries (Barnett Waddingham) to discuss the implications of the transfer of employees with either Admitted Body Status (ABS) or use of a Government Actuaries Department (GAD) Passport. Early discussions were held on the potential impact on both employee’s pensions and the affect on the Pension Fund. Key points discussed included the current Government consultation on the Fair Deal Policy: treatment of pensions on compulsory transfer of staff from the public sector, current trends by providers is to opt for ABS over GAD due to cost, the detail of ABS including the provision of a bond, related risks and open and closed schemes.
A paper will be going to the September Pensions Fund Committee on the position of the procurement Projects within the One Barnet Project, requesting approval for an ‘in principle’ decision on the corporate approach to managing the pension implications. Individual projects will still need to present their in individual specifications to the Pension Committee.
Whilst we have had a presentation (which was helpful) and some discussions about the proposals for staff being transferred out of the council, we have not had any detailed information with regards the impact of the mass outsourcing on the future viability of the scheme.
In absence of a response to our concerns UNISON commissioned First Actuarial LLP to produce a report.
I am now enclosing our report and a summary of the report to all members of the Pension Fund Committee.
Because of the seriousness of the issues raised by our report I am asking for a extraordinary Pension Fund Committee to be convened. I am able to confirm that our actuary is willing and able to address the Pension Fund Committee once we reach an agreement about the date of the meeting. I do need to make members of the Pension Fund Committee aware that UNISON identified this as a serious risk three years ago. It is unfortunate it has taken the Council until this late stage to recognise that is indeed the case.
I understand that Barnett Waddingham have produced a report modelling the impact of outsourcing I am formally requesting a copy of this report.
I welcome member’s comments and questions, I will endeavour to respond to them in due course. I will be attending the Pension Fund Committee as the union observer tomorrow.
Best wishes
John Burgess
Interim Branch Secretary.
Barnet UNISON
www.barnetunison.me.uk
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