Contribution to the Public Employees Contributory Retirement Scheme (PECRS) Pre 1987 Debt Repayment.

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A decision made (04/05/2006) regarding Contribution to the Public Employees Contributory Retirement Scheme (PECRS) Pre 1987 Debt Repayment.

Subject:	Contribution to the Public Employees Contributory Retirement Scheme (PECRS) Pre 1987 Debt Repayment
Decision Reference:	MD-HA-2006-0042	Exempt clause(s):
Type of Report (oral or written):	Written	Person Giving Report (if oral):
Telephone or e-mail Meeting?		Report File ref:		HAD/FIN 3
Written Report – Title:	Home Affairs Departments’ Contribution to the Public Employees Contributory Retirement Scheme (PECRS) Pre 1987 Debt Repayment	Written report – Author:		Carol Nicholas Finance Manager
Decision(s): To agree the transfer of £485,200, equivalent to 2% of members pay, to the Chief Minister’s Department, in order to ring fence the funds required to enable the repayment and servicing of the PECRS pre 1987 debt.
Reason(s) for decision: The 2% element for repayment and servicing of the debt is to be held centrally within the Chief Ministers Department. This arrangement will lessen the burden on individual Departments to make monthly repayments and also insulate Departments should the cost of repayments increase or staff numbers decrease.
Action required: The Finance Manager will inform the Treasury of the decision, and supply them with the relevant Home Affairs Business Units and Object Account numbers for the funds to be transferred.
Signature: (Minister/ Assistant Minister)			Date of Decision: 4 May 2006

Contribution to the Public Employees Contributory Retirement Scheme (PECRS) Pre 1987 Debt Repayment.

HOME AFFAIRS Departments’ contribution to the Public Employees contributory retirement scheme (pecrs) pre 1987 debt repayment

1. Purpose of Report

1.1. To agree to transfer budget, equivalent to 2% of members’ pay, to the Chief Minister’s Department in order to ring fence the funds required to enable the repayment and servicing of the Public Employees Contributory Retirement Scheme (PECRS) pre 1987 debt.

2. Background

2.1. On 27 September 2005 the States approved amendments to the PECRS to address the pre 1987 deficit of the scheme (P189/2005 and P190/2005).

2.2. A valuation at 31 December 2001 placed a value on the States’ share of the pre 1987 debt of £177.5 million.

2.3. A framework for dealing with the debt, approved by the former Policy and Resources Committee and the Committee of Management, agreed to increase the employers contribution to the scheme to 15.6% of which a repayment equivalent to 2% of members’ pay would be made over 82 years from 1 January 2002.

3. Comments

3.1. During the 2006 Budget process Departments’ revenue budgets included a provision to increase their PECRS contribution from 15.16% to the required 15.6%.

3.2. It has been proposed that the budget for the 2% element for repayment and servicing of the debt be transferred from all Departments’ budgets to a central HR vote held within the Chief Minister’s Department. This arrangement will lessen the burden on Departments to make monthly repayments and also insulate Departments should the costs of the repayments increase or staff numbers decrease.

3.3. Alongside this arrangement States Payroll has been adjusted such that Departments will be charged the reduced 13.6% PECRS contributions from January 2006.

3.4. The figure as given below of £488.5K has been updated to £485.2K to reflect the recent transfer of the total staff budget of the Fire Service Control Room Staff to the Joint Control Room which is now managed by Health.

4. Recommendation

4.1. It is recommended that the Minister agrees to transfer budget equivalent to 2% of members’ pay, as shown on the attached schedule, to a central HR vote within the Chief Minister’s Department.

5. Reason for Decision

5.1. To ring fence the funds required to enable the repayment and servicing of the Public Employees Contributory Retirement Scheme pre 1987 debt for the period through to 2083.

Carol Nicholas, Finance Manager

Home Affairs Department, Monday 24th April 2006

Calculation of 2% PECRS contribution for the ongoing repayment of the pre 1987 debt