Agenda item

Pension Reform

At the request of the Chairman the Chamberlain briefed the Board on emerging proposals for the reform of local authority pensions. He noted that the Minister had recently written an article querying whether or not too many local authority pension schemes existed, with too much associated administration. The Chamberlain explained that he had done some work for London Councils on developing an approach which concentrated around the concept of a Collective Investment Vehicle (CIV). He told the Board that there was time for the Corporation to make a formal response to the government consultation, but that he would welcome a decision from the Board at the meeting on whether or not they were content in principle with the CIV.  If so, the Chamberlain explained that each local authority would commit up to £25,000 to the design scheme, although he observed that as some London local authorities had already signed up, the figure should be less to the scheme. He said that he was happy with the idea in principle and with the requirement to commit the monies. He concluded by informing the Board it may be likely that either the Corporation or Wandsworth may be requested to act as the lead authority in establishing the CIV.

The Board proceeded to discuss the proposal:

·         A member queried the capacity of other London local authorities to participate in the scheme and the administrative burden of a London-wide scheme. He expressed the concern that in the event of the Corporation acting as lead authority, it would quickly become tied down and lose its freedom of action.

·         A member said that he was pleased that central government was against a pooled Local Government Pension Scheme as this meant a lack of control.

·         A member concurred, welcoming the greater control offered by a CIV.

·         The Chairman noted his support for the Chamberlain’s recommendations.

·         The Chamberlain informed the Board that he had been nominated to the shadow joint local authority-central government board that was due to monitor the new scheme.

·         Noting the possibility that the Corporation may be asked to be the lead authority in the new scheme, two members observed that it would be best if the Corporation was seen to be proactive in putting itself forward for the role as this would likely mean the Corporation would have early sight of emerging proposals.

·         The Chairman concluded discussion by noting the matter was also before the Policy and Resources Committee.