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The London Borough of Merton Pension Fund. Actuarial update AGM September 2012. Alison Hamilton FFA. Agenda. Lord Hutton’s Recommendations. LGPS 2014 – the headlines. Public Service Scheme Proposals. Trade accrual and revaluation for same cost (ish) Not quite there yet. Why CARE?.
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The London Borough of Merton Pension Fund Actuarial update AGM September 2012 Alison Hamilton FFA
Public Service Scheme Proposals Trade accrual and revaluation for same cost (ish) Not quite there yet
How it works Accrual 2% (1/50th) Pay Increases 3% Revaluation 3%
How it works Accrual 2% (1/50th) Pay Increases 3% Revaluation 3%
How it works Accrual 2% (1/50th) Pay Increases 3% Revaluation 3%
How it works Accrual 2% (1/50th) Pay Increases 3% Revaluation 3% A final salary scheme is a CARE Scheme with actual salary increase revaluation
Impact on Merton Pension Fund • We can do the calculations • 1-2% of payroll • The benefits cost roughly the same • The link to SPA reduces the over all cost • Depends on membership profile and funding assumptions • Above excludes any benefit of “50/50” lite option • Employer cost roughly halves for those who opt for 50/50 • If 10% of payroll opt for “50/50” • Further saving of c. 0.5% for the Fund • Variation between employers within Funds
Summary • The 2013 valuation is just around the corner • Benefits built up to date are the same • New contribution rates may reduce slightly • For future benefits • For employers • Not employees • Still a deficit to fund • Still some decisions to be agreed for 2014 scheme