Valuation of the Public Employees Contributory Retirement Scheme as at 31 December 2007

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A decision made 20 November 2009 regarding: Interim Report on the Actuarial Valuation of the Public Employees Contributory Retirement Scheme as at 31 December 2007.

Decision Reference: MD-C-2009-0090
Decision Summary Title :	Interim Report of the Chief Minister – Public Employees (Contributory Retirement Scheme) (General) (Jersey) Regulations 1989		Date of Decision Summary:	19 November 2009
Decision Summary Author:	Senior HR Manager		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Interim Report of the Chief Minister - Actuarial Valuation of the Public Employees Contributory Retirement Scheme as at 31 December 2007		Date of Written Report:	17 November 2009
Written Report Author:	Senior Human Resources Manager		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Interim Report on the Actuarial Valuation of the Public Employees Contributory Retirement Scheme as at 31 December 2007.
Decision(s): To lay before the States an interim Report regarding the deficiency relating to the PECRS 2007 valuation report.
Reason(s) for Decision: The latest PECRS Valuation as at 31st December 2007 was laid before the States on 11 August 2009 and shows a deficiency of £63.2m. Under the Regulations, proposals for dealing with a deficiency need to be agreed between the Committee of Management of the PECRS and the States Employment Board. If no agreement has been reached on proposals within three months of laying the Valuation before the States, then the Chief Minister submits a progress report noting its own proposals. The interim report is to advise States Members that no agreement has been reached on ways to deal with the deficiency. However, in accordance with normal practice, representatives of the States Employment Board are currently in negotiations with the Public Employees Pension Joint Negotiating group (JNG) which represents the interests of all members of the Scheme. A further report will be made to the States by 11 February 2010, confirming whether negotiations have resulted in an agreement between the States Employment Board and the Committee of Management or, if agreement has not been reached, advising that the fall-back position under the Regulations will apply.
Resource Implications: None
Action required: Senior HR Manager is requested to arrange with the States Greffe for the Interim Report to be laid before the States at the earliest possible date.
Signature:		Position:
Date Signed:		Date of Decision (If different from Date Signed):

Valuation of the Public Employees Contributory Retirement Scheme as at 31 December 2007

INTERIM REPORT OF THE CHIEF MINISTER

Actuarial Valuation of the Public Employees Contributory Retirement Scheme as at

31 December 2007

The Public Employees (Contributory Retirement Scheme) (General) (Jersey) Regulations 1989, made in accordance with the Public Employees (Retirement) (Jersey) Law 1967, require an Actuarial Valuation at least every five years. It is the policy of the PECRS Committee of Management (COM) to have such valuations once every three years so as to keep the finances of the Scheme under more frequent scrutiny. The most recent valuation was signed off by the Scheme Actuaries on 2 July 2009 and shows the Scheme as having a deficiency of £63.2m as at 31 December 2007.

Under the PECRS (General) Regulations a deficiency can be carried forward if it appears to be of a temporary nature. The States Employment Board, having considered the Employer's Actuaries' professional opinion, is of the view that the deficiency may not be seen as being of a temporary nature and should dealt with under the Regulations.

Under the Regulations, proposals for dealing with a deficiency need to be agreed between the COM and the SEB before being submitted to the States according to the following timetable:-

If agreement is reached within three months of the Valuation being laid before the States, then the Chief Minister submits the agreed proposals to the States;
If no agreement has been reached on proposals within three months of laying the Valuation before the States, then the Chief Minister submits a progress report noting its own proposals;
If within six months of laying the Valuation before the States the SEB and COM have reached agreement then the Chief Minister submits the agreed proposals to the States;
If no agreement has been reached on proposals within six months of laying the Valuation before the States, then after a further period of three months the COM must reduce the level of pension increases for the future.

Since the present Valuation was laid before the States on 11 August 2009 the States Employment Board and the Committee of Management have not so far been able to reach agreement on how to deal with the deficiency. However, in accordance with normal practice, representatives of States Employment Board have been negotiating with the Public Employees Pension Joint Negotiating Group (JNG) which represents the interests of all members of the Scheme.

A further report will be made to the States by 11 February 2010, confirming whether negotiations have resulted in an agreement between the States Employment Board and the Committee of Management or, if agreement has not been reached, advising that the statutory fall-back position will apply.