Public Employees Contributory Retirement Scheme contributions (FOI)
Public Employees Contributory Retirement Scheme contributions (FOI)Produced by the Freedom of Information office
Authored by States of Jersey and published on 27 February 2017.
I would like to thank the pensions unit for their very clear response to my questions but I am now more concerned than I was during my previous two enquiries to establish what level of payments and by whom made into the scheme.
If I have understood the answer correctly, the employer is required to pay in the percentage of an employee’s salary as dictated by what the actuary defines as the sums required to maintain the pension liability. Please do correct me if I am wrong.
My concerns after the British Home Stores (BHS) pension debacle were over whether or not this obligation actually exists, however despite how plausible the latest answer may sound, I fear that the BHS employees if questioning their scheme administrators prior to its collapse may well have had a similar response from BHS at the time. There are clearly unanswered questions remaining.
For me this is a question of whether or not the scheme is fit for purpose not just while the scheme / economy are doing well but what would happen if for example there was an extended period of bad years.
In order to judge whether or not the employees are paying in the full contributions stated when they undertook employment and crucially if the employers are reducing their payments during ‘good’ years I would therefore like to request the following information:
For each of the past ten years I would like to know for each area the pension unit are responsible (Jersey Post, Jersey Telecoms, teachers, police etc.) the annual percentage the employees have paid into the funds / scheme compared with the annual percentage paid in as contributions by the employment bodies.
I would also seek formal confirmation that the employers under the current terms of the scheme have an obligation to make up any shortfall should the scheme go into deficit.
My biggest fear is that the employees will without fail have paid in the full percentage throughout while in the background the employers are paying in the minimum amount to keep the scheme afloat during good years and will then deny responsibility during difficult times.
The Committee of Management are the governing body for the Public Employees Pension Fund and responsible for ensuring that the required employer and employee contributions are paid into the Scheme.
The annual percentage that employees and the States are required to pay into the Scheme are defined in regulations and shown in the Actuarial Valuation Funding eports produced every three years by the Scheme Actuary. These reports are presented to the States and publicly available on the States website. These reports show the employer contribution rates that the Scheme Actuary has determined Jersey Post and Jersey Telecom are required to pay in order to fully fund the benefits. Throughout the last 10 years Admitted Bodies have paid the employer contributions deemed appropriate and required of them by the Scheme Actuary.
The latest report can be viewed at the following link:
Actuarial Valuation Funding Report 2013
The Public Employees (Pension Scheme) (Funding & Valuation) (Jersey) Regulations 2015 define the employer contributions payable and the process for setting employer and employee contribution rates for the future. Under these regulations, employer contributions are required to be double the average rate of member contributions, and employer contributions can be increased up to 16.5% of salaries to meet the future cost of benefits. This applies to the States and Admitted Bodies such as Jersey Post and Jersey Telecom.
The pensions paid to Public Employees Contributory Retirement Scheme (PECRS) members, whether formerly employed by the States or Admitted Bodies such as Jersey Post and Jersey Telecom, are dependent on the funding position of the scheme. In the event of a funding deficit, the level of future pension increases on PECRS benefits can be reduced (as occurred following the 2007 and 2010 valuations of PECRS); employers are not required to provide funds over and above the maximum employer contribution rate of 16.5% of salaries.