The Pension Fund Committee of Barnet Council met on Thursday 1 February 2024 to discuss the Contribution Review Policy and the Council's request for a review of its pension deficit contributions. The Committee formally adopted the revised Contribution Review Policy and subsequently agreed to an 8% reduction in the London Borough of Barnet's employer contribution rate for the 2024/25 and 2025/26 financial years, subject to certain safeguards being implemented by the Council. The Committee also approved the publication of the 2022/23 Draft Annual Report.

Contribution Review Policy Adopted

The Committee formally adopted the proposed changes to the Contribution Review Policy. This policy has been revised to clarify and enable actions permitted under regulation 64 of the Local Government Pension Scheme Regulations 2013, which allows a Tax raising body to review its pension fund contribution rates. The revisions followed an extensive consultation period involving interested parties, and legal advice was sought from both internal Legal Services and a specialist external firm. Officers reported that the consultation included an employer meeting and an email to all employers, with feedback received from Middlesex University and a maintained school indicating satisfaction with the proposed revisions.

Council's Pension Deficit Contribution Request Approved

Following the adoption of the revised Contribution Review Policy, the Committee considered the Council's request to amend the Rates and Adjustment Certificate. The Head of Pensions and Treasury presented a report outlining the Council's financial situation, supported by an update from the S151 Officer. The Fund Actuary also provided information on how the contribution rate adjustment was calculated.

The Committee agreed that the conditions set out in the new Contributions Review Policy for reviewing Pension Deficit contributions had been met. A key decision was to approve an 8% reduction in the London Borough of Barnet's employer contribution rate for the 2024/25 and 2025/26 financial years. This reduction is based on actuarial calculations that would have been permissible under the 31 March 2022 valuation, without relying on post-valuation experience.

This agreement is contingent upon the Council implementing specific safeguards outlined in Table 3 of the report. These safeguards include demonstrating a commitment to long-term budgeting by setting the long-term rate of pension contributions at 28.4% within its Medium Term Financial Strategy, and agreeing to regular reviews of the funding rate and appropriate actions following changes in market conditions. The Committee requested an action plan to ensure these conditions are implemented and that they receive updates on its progress. The S151 Officer suggested that the Committee receive the same information as the Overview and Scrutiny Committee regarding the Council's progress on delivering savings over the period to 31 March 2026.

Additionally, the Committee agreed that schools should be informed that the reduction in Pension Deficit Contributions is for a two-year period only and that their budgets will need to be adjusted accordingly after this period.

2022/23 Draft Annual Report Approved for Publication

The Finance Manager presented a report seeking approval of the 2022/23 Draft Annual Report and confirmation on whether it was appropriate to publish it based on the current audit status. The Committee was advised that legal advice had been sought regarding who should sign the Annual Fund Report and Annual Accounts, with no specific regulations found, but it was considered good practice for the sitting Chair to sign these documents.

The Committee noted that their Investment Policy would be superseded and agreed that this change should be reflected in their Annual Report. Consequently, the Committee resolved to approve the 2022/23 Draft Annual Report and its subsequent publication.

The meeting concluded at 7.40 pm.