A Welcome from Jean Hinks, Bath and North East Somerset Council Resources Director
This edition of Avon Pension News is dominated by the dispute between Government and trades unions over abolition of the Rule of 85.
In all, it takes up the first five pages but we make no apology for this. The current position is complex, with politics and the law intertwined. We believe we
should do everything we can to enable scheme members to understand the issues involved.
Abolition of the Rule of 85 is not the only item in this edition which merits members' attention. There are important tax changes coming into effect on 6
April 2006. In other circumstances these would have been the front page item.
Also covered in this newsletter are the change in the law relating to Civil Partnerships and the latest developments relating to Equitable Life. A full list of contents is set out below.
If, after reading all this, you are beginning to feel a bit jaded you may not appreciate the challenge of
Steve's Sudoku! In that case you may find the tribute to Bob Jeffries a little easier to digest. You can find both of these on the back page.
As always, please do not hesitate to contact the staff of the Avon Pension Fund if you need more information.
IN THIS ISSUE
The Rule
of 85 - Should I Care if it is Abolished?
The Rule of 85 - The
Current Position
The Rule of 85 - What
they say about it
The
Rule of 85 - How does abolition affect me personally?
The Rule of 85 - Summary
Civil Partnerships
Constitution Change
Pension Clinics
5th Annual Employers Conference
Equitable Life Update
Tribute to Bob Jeffries
Sudoku Competition
Terms & Conditions
A short version of the current Annual Report
was also distributed with the newsletter, this can be viewed
here: 
(180 kb)
CONTACT US:
Avon Pension Fund, Floor 3 South, Riverside, Temple Street, Keynsham
BS31 1LA
Telephone: 01225 477000
Facsimile: 01225 395258
Email: avon_pension@bathnes.gov.uk
Please quote your National Insurance number and the
name of your employer when ringing us or writing.
Please direct your comments and feedback about this newsletter to
Martin Downes, Team Leader - Communications and Systems.
Either email him or telephone him on 01225 395280
E-Newsletters
Would you prefer to receive Avon Pension News electronically rather than by post?
If so, please send an email confirming this to: avon_pension@bathnes.gov.uk
and all future copies will be emailed to you in pdf. format.
Unless you are an avid reader of Avon Pension News, the chances are that any mention of the Rule of 85 will leave you cold.
"So what does it matter if the Rule of 85 is abolished? It doesn't affect me, does it?"
If you care about your pension, the answer is unfortunately "yes". A pension is an integral part of your remuneration package and can be regarded as
"deferred pay". If you have sufficient service in the scheme to satisfy the Rule of 85, abolition of this rule will have the effect of reducing your deferred pay.
"Then you'd better explain to me how it works."
In the Local Government Pension Scheme (LGPS) the "normal retirement age" is 65. However, you can retire without employer's consent at any time after
age 60 on a full pension (i.e. not actuarially reduced) if the sum of your age and service in the Scheme at retirement is 85 or more. If before the age of 65
you could have achieved more than 20 years' service and the Rule of 85 is abolished, retirement before age 65 will see your pension reduced by whatever
amount is prescribed by the Government Actuary.
"That's all very well but why should I worry about it. Wasn't there an agreement between the Government and the public sector unions that existing public
sector staff could continue to retire at 60 on a full pension. Won't this apply to me?"
In short, the answer is a qualified "no". Please refer to pages 2 and 3 for a full explanation.
The Rule of 85
You would qualify under the rule of 85 and your pension would be payable unreduced if at the time you start drawing your pension, your scheme
membership (in whole years) plus your age add up to 85 or more. For example, a member retiring at age 60 with 25 years membership satisfies the 85 year
rule. If you work part time, your membership counts towards the 85 year rule at full calendar length.
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The LGPS is a final salary scheme. In the private sector many final salary schemes are being closed to new staff (or in some cases closed to all staff) because
their assets have failed to keep pace with their liabilities. This is due to a mixture of poorly performing equity markets (between 2001 and 2003), declining
long term interest rates and increasing longevity.
The LGPS has suffered in a similar way. It is the only public sector scheme which is funded, i.e. has money set aside and invested. All the other public sector
schemes are unfunded, i.e. net pension liabilities (pension payments less contributions) are financed out of tax revenues as they arise.
So far as the Avon Pension Fund is concerned, despite having a higher than average funding level among local authority pension funds, its assets at 31
March 2005 covered only 80% of its liabilities. This in turn has led to a significant increase in the contribution rates paid by the Fund's employing bodies with
effect from 1 April 2005.
The Government was clearly concerned about the increased costs being incurred by local authorities as a result of the pension fund deficits. It was against
this background that in December 2004 regulations were introduced to abolish the Rule of 85 with effect from 1 April 2005 (the implications of this were set
out in the last newsletter). However, in the face of opposition from the trades unions in advance of the May 2005 General Election, these regulations were
revoked by the Deputy Prime Minister. Instead, it was agreed that tripartite discussions should be held between the ODPM (Office of the Deputy Prime
Minister), the Local Government Association and trades unions to determine the future of the LGPS, including the Rule of 85.
Tripartite Discussions
The tripartite discussions have been ongoing for more than six months. Although progress has been made on most other issues, the future of the Rule of 85
has remained a sticking point. The Local Government Association has argued for its abolition in order to reduce costs (or, more precisely, to prevent costs
increasing further since the new employer contribution rates already assume abolition of the Rule of 85) while the trades unions have opposed any
reduction in their members' pensions. For its part the ODPM has tried to act as "honest broker", hoping that it would not be required to arbitrate. (This was,
in fact, a slightly disingenuous position for the ODPM to adopt because it was already aware that, on the basis of legal advice which it was receiving, it
had no choice but to abolish the Rule of 85 with effect from 1 October 2006).
In early December, with the Local Government Association and trades unions still in conflict, the ODPM duly announced that the Rule of 85 would be
abolished with effect from 1 October 2006, citing European age discrimination legislation in support of its position. This was subsequently given effect in
draft regulations issued by the ODPM. The regulations provide that staff retiring at age 60 on or before 31 March 2013 would be protected (i.e. continue to
benefit from application of the Rule of 85).
The ODPM's announcement caused dismay among the trades unions who in late October had struck a deal with the Government that all existing staff
belonging to the Civil Service Pension Scheme, the Teachers Pension Scheme and the NHS Pension Scheme could continue to retire at 60 (these schemes
differ from the LGPS in that staff can retire at 60 on a full pension irrespective of the length of service). Alan Johnson, Secretary of State for Work and
Pensions at the time, accepted that existing staff should not have their pension promise broken and should suffer no detriment in their pensions
arrangements. However, changes to the Local Government Pension Scheme were to be discussed separately with the Office of the Deputy Prime Minister.
Current Position
The current position is that the trades unions are attempting to persuade the Government to change its stance on abolition of the Rule of 85 for a second
time. They are hoping to do this before the consultation period on the draft regulations expires on 28 February. They have already challenged the
Government's interpretation of the European age discrimination legislation and have announced that they will be balloting their members on strike
action.
Set out on the next page are key quotes from the various parties engaged in the present dispute. So far as scheme members are concerned, anyone
retiring after 31 March 2013 should be aware that, depending on length of service, he or she could be worse off if the draft proposals become law.
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Set out below are extracts from statements made by the three parties to the tripartite discussions, starting with the ODPM:-
ODPM News Release
"The Government's objective for the Local Government Pension Scheme is to ensure its ongoing affordability, sustainability and acceptability to taxpayers
and, at the same time to provide good quality, attractive and flexible pensions that provide fairly for its existing and future membership.
A central tenet of this is the removal of the 85 year rule from the scheme (whereby local government workers can retire early if their age and years of
service total more than 85), to comply with age discrimination legislation coming into force from October 2006. Consultation on amending regulations
will follow shortly."
Government Minister Phil Woolas
"It is our clear intention to remove the 85 year rule from the scheme from 1 October 2006, to comply with European age discrimination legislation. The rule
of 85 discriminates not only on the grounds of age, but also against women, who are likely to start work for their local government employer later and on
a part-time basis."
Local Government Association
"We would like to see the removal of the 85-year rule, preferably from next April but Mr Prescott is likely to opt for October". (Chairman of the Association)
Unison
"The Deputy Prime Minister says the Rule of 85 must go under age discrimination laws. The law he is referring to does not yet exist. We will mount a legal
challenge as we believe the Government and the LGA have the law wrong. All we have asked for is the same treatment as other public sector workers
who have their existing pension rights protected. It is a matter of fairness and equality. We have 12 weeks to continue talks and make the Government see
sense before the order becomes final".
GMB
"On the one hand we have achieved the objective of covering the cost of revocation without having to increase employee contributions or council tax.
All the trade Unions would agree that the Rule of 85 is unfair and needs to be replaced. We also agree that the Trade Unions and employers need to
review the entire LGPS next year.
However, ODPM appear to have introduced a problem of their own making. In their manner of removing the Rule of 85 they seem to be suggesting
restricting the ability to negotiate protection to those closest to retirement. This would be an unnecessary and unwarranted interference. However, if the
ODPM are saying we have the ability to negotiate all forms of protection for existing members of the scheme then that is a different matter".
The flowchart below shows how the changes affect your benefits if you were to voluntarily retire on or after age 60, or if you were to retire before age 60
with your employer's consent.
This is a reproduction of the flowchart included in the last newsletter, amended to reflect the fact that the Rule of 85 is now scheduled for abolition on 1
October 2006 rather than 1 April 2005.
Please note that no reduction will be applied to any of your benefits if you draw them on or after age 65.
Retirement on or after age 65
|
Voluntary retirement before age 65
|
See Box A
|
See Box B
|
|
|
|
|
|
No change to existing rules i.e. benefits are payable in full
|
Would you have satisfied the rule of 85 if you had remained in the Scheme to age 65?
|
Yes
|
No
|
|
No
|
Yes
|
Will you meet the 85 year
rule by the time you start drawing your pension? |
|
No change to existing rules. Benefits will be paid at the same reduced rate as before if drawn before age 65. |
Will you be aged 60 or over by 31 March 2013? |
Yes
|
|
|
No
|
Will you meet the 85 year
rule by the time you start drawing your pension? |
Yes
|
See Box C |
|
|
|
No
|
See Box D |
None of the benefits you accrue up to 31 March 2013 will be reduced.
However, any benefits you accrue after that date will be reduced to take account of the fact that benefits are being drawn before age 65. The size of
the reduction will depend on how many years before age 65 you draw your benefits.
The benefits you have accrued up to 31 March 2013 will be reduced but the reduction will be the same as under the old rules (i.e. based on the number of
years you are short of meeting the 85 year rule).
The benefits you accrue after 31 March 2013 will be reduced but the reduction will be higher than under the old rules to take account of the fact that the
benefits are being drawn before age 65. The size of the reduction will depend on how many years before age 65 you draw your benefits.
None of the benefits you accrue up to 30 September 2006 will be reduced.
However, any benefits you accrue after that date will be reduced to take account of the fact that the benefits are being drawn before age 65. The size
of the reduction will depend on how many years before age 65 you draw your benefits.
The benefits you have accrued up to 30 September 2006 will be reduced but the reduction will be the same as under the old rules (i.e. based on the
number of years you are short of meeting the 85 year rule).
The benefits you accrue after 30 September 2006 will be reduced but the reduction will be higher than under the old rules to take account of the fact that
the benefits are being drawn before age 65.
The size of the reduction will depend on how many years before age 65 you draw your benefits.
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• Scheme members who will have attained the age of 60 by 31 March 2013 will suffer no actuarial reduction except for any service accrued after 31 March 2013.
• Scheme members who will not have attained the age of 60 by 31 March 2013, but who would have satisfied the Rule of 85 before their 65th birthday and retire before then, will have an actuarial reduction applied to all service accrued from 1 October 2006. (See example below)
• Scheme members who could not have satisfied the Rule of 85 before their 65th birthday will not be affected by abolition.
Male member who retires at age 60
Date of Birth:13 December 1960
Joined the LGPS:1 October 1991
Retires on:12 December 2020
Age at retirement:60
Final salary for the 12 months up to retirement: £20,000
Total Service: 29 years 73 days
As retirement is after April 2013, only service before 1 October 2006 is 'protected' (unreduced). In this case, the 'protected' service totals 15 years.
All service after this date (14 years 73 days) is subject to reduction.
The member's pension is based on 29 years 73 days service multiplied by 1/80ths of their final salary:
Protected
15 x 1/80 x £ 20,000 = £ 3,750
And the lump sum is: 15 x 3/80 x £ 20,000 = £ 11,250
Unprotected
14y 73d x 1/80 x £ 20,000 = £ 3,550 x 67%* = £ 2,378.50
Lump Sum: 14y 73d x 3/80 x £ 20,000 = £10,650 x 89%* = £ 9,478.50
Total Pension = £ 6,128.50
Total Lump Sum = £ 20,728.50
* Based on current reduction percentage of 33% for male employees retiring before age 65 who do not satisfy the Rule of 85 (percentage reduction for
females on the pension is 27%). The reduction for the lump sum is 11%. The actual reductions will be decided by the Government Actuary
1 Any service transferred in from another pension scheme before 1 October 2006 counts towards the Rule of 85.
2 Part time service is equivalent to full time service for calculating the Rule of 85.
The implementation of the Civil Partnership Act 2004 has recently created a new form of legal recognition for relationships that will enable same-sex
couples to enter a civil partnership arrangement. The first registrations are effective from 5th December 2005 and the Local Government Pension Scheme
Regulations 2005 have now been amended to comply with government policy that "all rights, responsibilities or other treatment afforded to spouses under
the law should be afforded to civil partners (unless there is an objective justification for treating civil partners differently)". The amended regulations
affect all members of the scheme including pensioners and deferred pensioners as well as those currently contributing.
This change to the Local Government Pension Scheme regulations means that, for civil partners, membership accrued from 5th April 1988 onwards will
now count towards the calculation of survivor's benefits in the event of their death. Previously survivor benefits were only payable to a legally married
spouse (widow / widower) or to dependent children. Should a civil partnership later be dissolved there is also the potential for the pension to be split in a
similar way to the existing arrangements which apply to married couples for pension splitting on divorce.
The changes outlined above are contained within the Local Government Pension Scheme (Civil Partnership) (Amendment) (England and Wales)
Regulations 2005 (SI 2005 / 3069). The Local Government Pension Scheme is currently being reviewed and any facility to count service prior to 6th April 1988
for benefits in relation to civil partnership arrangements will be considered within this process, which is due to be completed in 2008.
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Other Proposed Changes for 2006
Draft regulations were issued by the government in early December which come into
effect from 1 April 2006. They are subject to consultation until 28 February 2006.
READERS SHOULD NOTE THAT THE CHANGES DESCRIBED BELOW ARE ONLY IN DRAFT FORM AND MAY
CHANGE. Any material changes made subsequent to the consultation will be posted on the Avon Pension Fund website.
Many of the proposed changes are required to bring the LGPS in line with the provisions of the Finance Act 2004. These are essentially changes to the tax regime under which Pension Funds operate.
At present the Inland Revenue operates a multi-tiered tax regime, of which three tiers primarily affect the LGPS. These different arrangements are being replaced with a single regime.
Principal Proposed Changes
The principal changes are set out below:
1.Abolition of Rule of 85. This issue has been discussed in depth throughout the first section of this newsletter. The only point which needs to be added is that members have the facility to nominate an individual retirement date falling on or after age 60 and before age 65 and make extra contributions to offset any reduction to benefits paid before age 65. Working beyond the nominated date would result in an actuarial increase in the rights accrued. The rate of contribution will be set by the Government actuary.
2.The new tax regime allows contributions to be paid up to 100% of pay (subject to a maximum of £215,000 in 2006/07). Members can supplement their LGPS pension either by buying additional service or paying Additional Voluntary
Contributions [AVCs]. Alternatively, members can operate independent pension arrangements concurrently e.g. stakeholder or personal pension plans.
3.In addition to the annual contribution limit, there is a lifetime allowance of £1.5 million (2006/07). This means that the value of your pension with the Avon Pension Fund (converted into a capital value by factors provided by the government actuary) plus any AVCs or independent pension supplement must not exceed £1.5 million. Any excess will be subject to tax at 55%. In practice, this is only likely to affect chief officers or anyone with a substantial independent supplementary pension.
4.In future, retirees will not be able to convert any of their scheme lump sum into additional pension. However, members will be able to give up part of their annual pension to provide an extra lump sum up to a value of 25% of the capital value of their benefits within the scheme, on the basis that for every £1 of pension given up they will receive £12 lump sum.
5.Scheme members will (with their employer's consent) be able to take their pension at or after age 60 and also draw a salary from alternative employment on reduced hours or a lower grade with their previous employer. In these circumstances the employer has discretion to waive any actuarial reduction which might have applied to the pension.
A summary of all the material regulatory changes is set out in a table
below:
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2006 Proposed Changes
(From April unless otherwise stated)
|
EXPLANATORY NOTE
|
| CONTRIBUTIONS & ELIGIBILITY |
| The 15% limit on employees contributions will be removed |
Up to 100% of pay can be paid
towards extra benefits either by
buying additional service or AVCs. |
| The maximum number of added years that a scheme member will in the future, be able to purchase will be limited to 6 2/3rd years |
The scheme will no longer be restricted to 40 years service, or service to age 65 so there is a potential to buy more service.
However, there needs to be a restriction on how much because these years will be deemed to be purchased in full in the event of ill-health retirement |
| The contribution rate that employees who go on strike will pay if they wish the strike days to count as pensionable service will be the standard employee's contribution rate plus the .common rate. set in the Fund's last valuation report for that particular employer (rather than a set rate of 16% at present) |
Brings contributions paid in strike cases more in line with actual values although in practice there should be no material difference. |
| Employees will be able to join and remain in the scheme until their 75th birthday |
Service will no longer be restricted to age 65 |
| THE CHANGES TO PENSION BENEFITS |
| The 85 year rule is to be removed in respect of benefits accruing after 30 September 2006 but members will be able to nominate an individual retirement date falling on or after age 60 and before age 65 and make extra contributions to offset any reduction to benefits paid before age 65. Working beyond the nominated date would result in an actuarial increase in the rights accrued |
Retirements before age 65 will suffer a benefit reduction for all service from 1 October 2006 onwards unless protected [see box below]. Members will be able to pay additional contributions to offset any reductions up to a nominated date |
| Transitional protections will apply to older members who will be aged 60 or over by 31 March 2013 (although the exact form of the protections and who they apply to is still open for discussion) |
It is proposed that any member born before 1 April 1953 will be protected and not encounter any reductions on service up to 31 March 2013. |
Benefits must be paid by age 75 and benefits for employees who defer drawing benefits beyond age 65 will be actuarially
increased (i.e. just as benefits drawn before age 65 may be subject to an actuarial reduction to reflect the fact that they will be paid for longer, benefits drawn after age 65 will be actuarially increased to reflect the fact that they will be paid for a lesser period of time) |
All benefits must become payable by age 75 at the latest. Any payments made after age 65 will be actuarially increased to
reflect the later payment |
Flexible retirement will be permitted at or after age 60, linked to a reduction in hours or grade agreed by the employer. The
employer will be able to waive, in whole or in part, any actuarial reduction that would have been applied to the early payment of those benefits. |
This facility allows members to continue working for an employer on different terms and draw their pension at the same time.
This facility would require employer consent
|
| Retirees drawing benefits on or after 6 April 2006 will be able to commute some of their pension to receive a bigger lump sum. For each £1 of annual pension surrendered, the member will receive a lump sum of £12. Retirees will be able to take up to 25% of the capital value of their pension benefits in the form of a lump sum |
Members retiring will be able to give up part of their pension to provide extra lump sum up to a total value of 25% of the capital value of their benefits.
The current facility whereby a lump sum can be converted into pension will be discontinued |
| Children's pensions coming into payment after 5 April 2006 will, for those who carry on in full time education or training for a trade, profession or calling beyond age 17, have to cease by age 23 (even if they carry on in full time education, etc beyond that age) |
Any child's pension commencing after 1 April 2006 will only be payable until the
child's 23rd birthday. |
| The amount of augmented membership that an employer may, in future, grant to a scheme member will have a single limit in years of six and two thirds. |
This allows additional service to be awarded by an employer beyond the present limit of 40 years at age 65 |
| The ability for a member to give up part of his pension in favour of a spouse, civil partner or dependant (payable should they survive the member) will be removed |
Historically this has been a very rarely used facility enabling a member to give up pension to provide extra dependants benefits based on the age of the dependant. |
| PENSIONS CAP |
| The existing limits on benefits are to be removed and the new HM Revenue and Customs rules will apply. In essence these provide for Annual and Lifetime Allowances of, in 2006/07, £215,000 and £1.5 million respectively (unless the member has a Personal Lifetime Allowance in excess of £1.5 million). If the value of benefits in a year is more than the Annual Allowance a tax charge arises on the excess; similarly, if the total value of a member's pension benefits, at date of payment, exceeds the Lifetime Allowance (or Personal Lifetime Allowance) there will be a tax charge on the excess. Consideration is still being given to how to deal equitably with the pension rights of those members who joined the LGPS on or after 1 June 1989 who are currently subject to the Earnings Cap of £105,600. |
The Avon Pension Fund Committee is currently reviewing its constitution and the way in which its stakeholders are represented with the aim of enhancing transparency and accountability. In particular, the review addresses whether:
(i) the Committee could benefit from wider representation of stakeholder views
and
(ii) whether the Fund should do more to both extend knowledge of its activities to all its stakeholders and facilitate wider consultation with them on key issues both locally and nationally.
To assist the Committee in this review, a consultation paper was distributed to all the employing bodies and trades unions which have members in the Fund.
The first part of the consultation paper sets out the current constitution and representation arrangements. Bath & North East Somerset Council has legal responsibility for administering the Fund on behalf of all the other employing bodies and has established the Avon Pension Fund Committee for the purposes of discharging this responsibility. Currently the Committee consists of five voting members from Bath & North East Somerset Council. There are also non-voting members (.observers.) from the other unitary authorities and trades unions.
Put simply, the role of the Committee is to represent the best interests of the Fund and its members. This includes being accountable for the management of the fund and being suitably qualified to make key decisions. The Committee must remain apolitical whatever the local and national pressures.
It is important to realise that the regulatory framework limits the discretion of the Committee. The Committee has no control over the scheme regulations and the discretionary element relating to pension benefits is very limited. The only matters on which the Committee can take strategic decisions are those relating to Fund investment, governance and administration, although it does have some influence over issues affecting the actuarial valuation.
The Fund has in place a wide range of mechanisms by which it "engages" with its various stakeholders. These range from communication vehicles such as this newsletter to organised events such as pensions clinics for members and forums such as the annual conference for the employing bodies. In addition, as mentioned above, there are Observers on the Committee and any member of the Fund (or public) can attend the Committee meetings.
The second part of the consultation paper is a questionnaire for the employing bodies and trades unions to complete. As mentioned above, the Committee is interested in obtaining the views of the stakeholders before making any changes. However any changes must take into account the additional financial and administrative burden imposed on the Fund, including any training needs. Completed questionnaires were due to be returned by 30 November 2005.
The questionnaire asked for views on the following:
1. Relationship with Avon Pension Fund
Are the current arrangements satisfactory, or could stakeholders be better informed about developments and/or be more actively involved in decision making?
2. Independent "Trustees"
Would the appointment of one or two independent "trustees" with voting rights increase the effectiveness of decision making and add value?
Independent "trustees" would perform the same role as the existing committee members and in particular would be expected to be knowledgeable about investments. Such "trustees" will minimise the risk to membership continuity that exists because all the current members are subject to the electoral cycle.
3. Representation
Are the current arrangements for representation satisfactory? Should Observer status be extended to other bodies? The Committee is aware that with
60+ employing bodies of varying size, it is difficult to achieve equality of representation, as the ability of all employers to participate varies greatly and there is a practical limit to the number of Observers which can be accommodated.
4. Accountability
Are the current arrangements for liasing with stakeholders on Fund developments satisfactory? The Committee is aware that it is sometimes difficult
to communicate its decisions to stakeholders in a manner which enables them to appreciate fully why those decisions were taken. Communication
and accountability could be enhanced through an annual Consultative Forum, for example, which would enable employing bodies and trades unions
to raise and discuss any issues with Fund representatives.
The full consultation paper can be found here.
The committee will be meeting to consider the results of the questionnaires and to decide the new governance arrangements at its meeting on 3rd March 2006. If you have comments on the consultation paper, please send them to
Tony Worth, Investments Officer (address on front page) before this date.
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The Avon Pension Fund has successfully been holding clinics since 2001. The clinics have grown in popularity since their inception, and in 2004 nearly 600 members of the Scheme were able to find out more about their pension entitlements at the clinics.
Initially, the demand for clinics was underestimated. Members came to events without appointments and waited to see a pensions officer, resulting in long waiting times for some members. A lot of the feedback from these early clinics highlighted a preference for being able to book appointments in advance.
Now (with the exception of Bristol City Council, our largest employer), all events are appointment based, with each member being allocated twenty minutes or so to talk through their queries with an experienced member of staff.
During the clinics, our experienced staff (equipped with laptops) answer individual member queries in a confidential environment.
The response to last year's clinics was very positive. Through the questionnaire we collect at each event, we are able to consider possible improvements, and make the clinics as useful as possible for Scheme Members.
Nowadays, clinics are a regular part of the Pensions calendar, with seventeen clinics held in 2005 at twelve different employers.
The 5th Avon Pension Fund Employers Conference took place on 4th November 2005 at Novotel, Bristol. A wide range of topics were covered in presentations given by senior Pension Fund staff including Tony Bartlett (Business Services Manager) , Steve McMillan (Pensions Manager), Tony Worth (Investments Officer) and Alan South (Technical and Compliance Officer). Additionally, Keith Bray from LAPFF (Local Authority Pension Fund Forum) gave a presentation on the work of the forum.
The Conference was well attended, and gave delegates an opportunity to discuss current and future issues with both Fund representatives and their employer colleagues.
The Conference also saw the release of the Avon Pension Fund's 2005 Annual Report. A short version of the report is included with this newsletter.
Equitable Life Assurance Society remains one of the 2 providers in which members of the Fund may still have their AVCs invested. Although it was removed
as provider for new AVC starters from 2001 due to concerns over its solvency position, and members were given the option to switch funds to Friends
Provident, some members chose to leave their AVCs with Equitable. This update is for their benefit.
It is encouraging to note that In recent press releases, Equitable Life has reported in its Interim Accounts for the half year ended 30 June 2005 that The
Society's financial position has substantially strengthened, resulting in interim bonuses having been increased by 1% to 3.5% from 1 October 2005. Equitable
Life also report that their key measure for solvency, the Fund for Future Appropriations, has improved by 30% to £713m.
Claims ended
Equitable Life had also been heavily involved in litigation against all 15 of its former directors and against its auditors, Ernst & Young. It has reported that it
has ended its legal claims against both of these. Based on the strong advice from its own legal team, it concluded that it must settle the litigation against
the former directors with as little additional cost as possible. The total costs of pursuing the claims against these has been approximately £45million. It had
already set aside £35million as a contingency in its accounts and it reports that the balance will have no material impact on
policyholders' benefits.
Obviously it is not for the Avon Pension Fund to comment or speculate on the financial position of Equitable Life on either solvency or expected future returns. Members are advised to consult an Independent Financial Advisor if they have concerns over these.
The Avon Pension Fund will keep members up to date with any further developments.
I first met Bob in 1974 when I started work for The County of Avon. It was a chaotic time with new staff arriving every day, either like me completely new or from the district councils. I was introduced to Bob who was to be my team leader; I thought he looked a bit like a hippie. I am not sure what he thought of me in my navy and white spotted trousers but he often referred to them over the years! I was his clerical assistant and that was the team - him and me. I remember he was very punctual and ate a Kit Kat every day. We were one of four teams at that time but as the years went by the section expanded and changed enormously and I soon moved from his team. He was never far away however and I was always able to tap into his knowledge of the pension scheme regulations.
The superannuation section as it was then known was a wonderful section to work on, it was full of characters, Bob being one of them. There was a great
camaraderie amongst the staff and pub crawls were sometimes organised to further staff relations. The occasional one in Bath was always led by Bob as he was the only one that knew his way around. We were always very well behaved, never disgracing ourselves or thrown out but on occasions some did fall sound asleep in the corner of a hostelry or even on the train going home, ending up in Plymouth or some such place. Anything was worth a celebration and on the Queen's Jubilee we all dressed in red, white and blue and had miniature Union Jacks flying from our desks. One member of staff (temporary I should like to say) turned up in the shortest of white shorts I have ever seen together with a white top, the only concession to colour being a
rosette stuck on her backside. When she climbed on a chair to stick something to the ceiling the boss almost fell off his and it was left to Bob to remonstrate with her.
Bob has a wonderful sense of humour, is always ready with a quip or a tale of some sort and has a talent for making people laugh. He also has a very good memory; mention Bath District Council and he can remember employees, where they worked and even sometimes, the day they started! He is a good guy to go to if you need a bit of help. One ex colleague said she can remember giving him a draft letter to check and it came back with just Dear Sir and Yours Faithfully intact - said it still makes her chuckle to think of it some twenty years later.
I have telephoned several ex colleagues regarding Bob but nothing has emerged. To a tee they have all been generous in their comments liking and
respecting him. Bob is now manager of the Pension Benefits section and I am retired. Times may have changed but not Bob and although I have to say he
no longer looks like a hippie his kindness and generosity and unfailing courtesy continue as always.
Pensions stalwart Bob Jeffries has worked for local government since January 1965 with Bath City Council, Avon County Council and since 1996, Bath
&North East Somerset Council. During this time, Madeline Bickle was often at his side as a colleague and a friend. Here, she recounts her memories of a Bath legend...
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