Public Employee Contributory Retirement Scheme

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A decision made (07/08/2009) regarding: Public Employee Contributory Retirement Scheme - Amendments.

Decision Reference: MD-C-2009-0054
Decision Summary Title :	Public Employees (Contributory Retirement Scheme) (General) (Jersey) Regulations 1989		Date of Decision Summary:	4 August 2009
Decision Summary Author:	Head of Employee Relations		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 :	Amendments to General Regulation 9		Date of Written Report:	23 June 2009
Written Report Author:	Senior HR Manager - Pensions		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Public Employees (Contributory Retirement Scheme) (General) (Jersey) Regulations 1989 – amendments: draft Public Employees (Contributory Retirement Scheme) (General) (Amendment No. 10) (Jersey) Regulations 200-
Decision(s): The Minister approved the draft Public Employees (Contributory Retirement Scheme) (General) (Amendment No. 10) (Jersey) Regulations 200- and agreed that they be lodged ‘au Greffe’ for debate at the earliest opportunity.
Reason(s) for Decision: To clarify a number of provisions of the Public Employees (Contributory Retirement Scheme) (General) (Jersey) Regulations 1989 (PECRS) which will ensure that Admitted Bodies clearly understand their obligations as an Admitted Body of the PECRS. Regulation 2 of the draft amending Regulations inserts a definition of ‘salary’ (not previously defined under this legislation), as ‘salary’ is now referred to in new Regulation 9A(3)(a). The definition clearly identifies what is and what is not pensionable salary, and is consistent with the definition of ‘salary’ used under the PECRS Existing Members (Jersey) Regulations 1989 and New Members (Jersey) Regulations 1989. Pay contributions to the Scheme as certified by the Actuary; also to acknowledge that contributions are due to the Scheme and that any unpaid contributions represent a debt to the Scheme. To provide membership data to the Committee of Management (CoM) to enable the Scheme to be administered. Fulfil (a) and (b) above to timescales set out by the CoM to ensure as far as possible that the Administrator is able to administer the Scheme efficiently and to collect contributions in a timely manner. Make good any contribution shortfall caused by its own administrative error. Confirm in writing that it has paid all contributions due to the Scheme for a specific period; this may involve provision of a certificate from the Admitted Body’s auditors if requested by the CoM. Provide evidence (if requested by the CoM) of its continued ability to pay the required contributions to the Scheme. Consult the Principal Employer in exercising its power under the Regulations. These requirements strengthen the position for the Principal Employer and the CoM in circumstances where an Admitted Body is disputing contributions or may have fallen in arrear. Further, where the Chief Minister wishes to give an Admitted Body six months notice to exit the Scheme, under current Regulations, the Chief Minister requires CoM consent to give notice to an Admitted Body which was a former States department. However, this consent is not a requirement for any Admitted Body which was not a former States Department. This legislation will mean that the requirement for CoM consent will apply to all Admitted Bodies and no longer differentiate between those which were or were not formerly States departments.
Resource Implications: None
Action required: Senior HR Manager – Pensions is requested to arrange with the States Greffe for the draft Regulations to be lodged ‘au Greffe’ for consideration on the earliest date.
Signature:		Position:
Date Signed:		Date of Decision (If different from Date Signed):

Public Employee Contributory Retirement Scheme - Amendments.

REPORT

The Chief Minister is promoting amendments to the Public Employees (Contributory Retirement Scheme) (General) (Jersey) Regulations 1989. The amendments relate to Regulation 9 which provides the Chief Minister with the power to extend membership of the Public Employees Contributory Retirement Scheme (PECRS) to employers other than the States, the Principal Employer.

The legislation provides that an employer who,

is a parochial authority,
is a statutory undertaking,
is a public utility,
has replaced a department or part of a department administered by a Minister,
has otherwise taken over the employment of any employees who are members of the scheme, or
not being one of the foregoing satisfies the Chief Minister that persons employed by the employer are employed in work of a nature which might properly be undertaken by a member,

may apply to the Chief Minister and be granted admitted body status under the Public Employees Contributory Retirement Scheme (PECRS).

The objective of these amendments is to clarify the obligations of admitted body employers to PECRS particularly in the areas of payment of contributions and provision of membership data to the Scheme’s Administrator.

The Attorney General and the Committee of Management (CoM) of the PECRS support the need for more detailed Regulations in order to protect all parties concerned. The amendments strengthen the position of the CoM and that of the Principal Employer, and therefore the Scheme itself, should difficulties arise with any Admitted Body over contribution payments, incorrect membership data or administrative error. The Scheme’s external auditors recommended some time ago, that the obligations of Admitted Body employers be delineated more fully in the Regulations and this recommendation was reaffirmed by other independent advisors, Watson Wyatt, during their review of the Scheme’s administration function, the Dedicated Pensions Unit.

Turning to the amendments themselves:

Regulation 2: the new legislation includes a definition of ‘salary’ (not previously defined under this legislation), as ‘salary’ is now referred to in new Regulation 9A (3) (a). The definition clearly identifies what is and what is not pensionable salary, and is consistent with the definition used in the Existing Members (Jersey) Regulations 1989 and New Member (Jersey) Regulations 1989.

Regulation 3 (a): clarifies what will be regarded as valid admission documentation for an Admitted Body.

Regulation 3 (b): makes it clear that the contributions for an Admitted Body certified by the Scheme’s Actuary can include additional contributions required to repay its share of the Pre-1987 Debt.

Regulation 3 (c): means that the Chief Minister cannot give notice to an Admitted Body to exit the Scheme without first having agreed with the CoM and allowed the CoM to consult with the Scheme’s Actuary.

The new Regulations 9A and 9B set out the required written undertakings which are required from both new and existing Admitted Bodies.

An important undertaking is that paid contributions will be recoverable by the CoM as a civil debt of an Admitted Body which has not paid its contributions certified by the Scheme’s Actuary.

Other written undertakings will include:-

That membership data be provided to the Scheme Administrator based on timetables set by the CoM in order that contributions may be collected in a timely manner.
An Admitted Body will make good any contribution shortfall caused by its own administrative error.
Confirm in writing that it has paid all contributions due to the Scheme for a specific period; this may involve provision of a certificate from the Admitted Body’s auditors if requested by the CoM.
Provide evidence (if requested by the CoM) of its continued ability to pay the required contributions to the Scheme.
Consult the Principal Employer in exercising its powers under the Regulations.

These amendments have been discussed and agreed with the PECRS Committee of Management and the Public Employees Pension Scheme Joint Negotiating Group. There are no financial or manpower implications arising from these regulations.