Agenda item

The Funding Strategy Statement sets out the key assumptions which the actuary has used in preparing the actuarial valuation and, in those cases where the Administering Authority has some discretion, the policies adopted by the Administering Authority.

The Funding & Valuation Manager introduced the report to the Committee and highlighted the following points.

·  The comments received via the consultation with employers were considered carefully and it has been concluded that no fundamental changes to the draft FSS are required (other than to update the technical information as the valuation progresses) as it was felt that the framework covered the issues raised and there was sufficient flexibility within the FSS to address the points raised where appropriate.

·  There are outstanding technical (and potentially regulatory) matters that will need to be included in the FSS which may affect the contributions and /or funding policy. These will be resolved as the valuation progresses. As these are technical in nature, it is recommended that Officers are given delegated powers to finalise the FSS having received full advice from the Actuary, should there need to be any changes as a result of further development on these or similar matters.

·  Once the valuation is finalised, the FSS will be updated and published. For admissions and exits, the 2025 FSS actuarial assumptions will be effective from 1 April 2026. This is consistent with our current policy.

Paul Middleman, Mercer, Fund Actuary, addressed the Committee and explained that engagement with employers had taken place on key issues such as Surplus Policy, implications for employer contribution rates and overall approach and ongoing review.

He said that there had been some push back from employers regarding reserves and that it was a challenge to find the balance.

He stated that he felt that the FSS as drafted offers sufficient flexibility, including the pay growth assumption, and that further steps would have been impractical.

The Funding & Valuation Manager said that the final actuarial outcome will be reported to Committee at their March 2026 meeting and will take into account various refinements to individual employer results e.g. relating to ill-heath and death in service captive premiums.

William Liew asked for confirmation for when employers would have to pay their new level of contributions.

The Funding & Valuation Manager replied that these would apply from 1^st April 2026. She added that the employer’s respective finance teams would know the levels by December 2025.

Charles Gerrish asked how this process would affect academies as they set their budgets in the middle of the financial year.

The Funding & Valuation Manager replied that should an increase in their contributions be determined then this can be postponed until 1^st September 2026 if required.

Councillor Chris Dando commented that he wished to thank the employers for their responses to the consultation and the officers and the Actuary for their roles in managing the process.

The Committee RESOLVED to:

i)  Note the feedback responses received, and the proposed amendments to the FSS.

ii)  Approve the FSS as set out in Appendix 1, subject to the insertion of information which can only be included when the actuarial valuation is complete.

iii)  Delegate the refinement and finalisation of the FSS to Fund Officers, with assistance of Fund Actuary.