Pensions Committee September 2014‏


Q.1 a) Has SCC considered the viability of the LGPS scheme in the light of a decreasing workforce (and potential scheme contributors) due to externalisation?

In asking this question you must understand that SCC acts in two separate capacities.  On the one hand it must act as the Administering Authority of the Somerset County Council Pension Fund, where it is only concerned with the viability of the fund (meeting the fund’s liabilities) and has no role in the position of employers within the fund.  As an Administering Authority we have to run the fund on behalf of its members, and working with over 100 different employers.  In this context it is very important that Somerset County Council, as an employer, received no differential treatment.

On the other hand Somerset County Council is an employer within the fund where it is not required to be concerned with the impact on the fund beyond the reciprocal impact this may have on it.

These two roles are separate and are run separately within Somerset County Council.  The Pensions Committee is charged with the Administering Authority role and has no view on SCC policy on any other matters.

Within the Administering Authority role we have considered the impact of falling numbers of active employees.  This was done as part of the 2010 valuation of the fund and at that time was more a reaction to redundancies as all councils slimed down post the credit crunch than a reaction to externalisations.  The step the fund took was to move the recovery of deficit payments by employers to a fixed cash amount basis rather than as a percentage of (a falling) payroll.  This change has given us a clear and sustainable path to becoming fully funded over time irrespective of the level of current active members.

Q2 a) The existing SCC workforce is approximately 4000 however if South West Heritage Trust (SWHT), Somerset Skills and Learning (SS&L), Learning Disability Provider Service (LDPS) and Support Services for Education (SSE) are externalised (via TUPE etc.) and the new employer does not allow new staff to join the LGPS (as has been clarified for SWHT) and the workforce reduces to 2000 plus, then the long term existence of the scheme could be undermined:

I)          If Admitted Body Status only applies for those staff who transfer?

As an Administering Authority we do not believe the long term objective of meeting the fund’s liabilities is dependent on the level of active members of the fund.

II)         If there is no admitted body status?

As an Administering Authority we do not believe the long term objective of meeting the fund’s liabilities is dependent on the level of active members of the fund.

b) Has this been looked at nationally, regionally and locally?

In its capacity as an Administering Authority Somerset County Council Pension Fund has not been part of any formal discussions with any 3rd party about this matter.


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