Public Employees Contributory Retirement Scheme: Termination of Administration Agreement

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A decision made 15 September 2017:

Decision Reference: MD-TR-2017-0117
Decision Summary Title:	PEPF - Termination of Pension Administration Agreement		Date of Decision Summary:	31 August 2017
Decision Summary Author:	Director of Accounting Services		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	PEPF - Termination of Pension Administration Agreement		Date of Written Report:	31 August 2017
Written Report Author:	Director of Accounting Services		Written Report : Public or Exempt?	Public
Subject: Termination of Pension Administration Agreement dated 28 February 2011
Decision(s): The Minister decided to terminate the Pension Administration Agreement.
Reason(s) for decision: Following the preparation and adoption of a pension administration strategy statement in accordance with provision 20 of the Public Employees (Pension Scheme) (Administration) (Jersey) Regulations 2015 the Committee of Management consider it desirable for the Pension Administration Agreement to be terminated. Accordingly the Minister is asked to agree the termination of the agreement and waive the notice period.
Resource Implications: There are no staffing or financial implications.
Action required: The Director of Accounting Services to send a copy of the approved Ministerial Decision to the PEPF Committee of Management to show the termination of the Pension Administration Agreement.
Signature:		Position: Senator A J H Maclean, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Public Employees Contributory Retirement Scheme: Termination of Administration Agreement

Treasury and Resources

Ministerial Decision Report

public Employees pension fund (PEPF) TERMINATION OF PENSION OF PENSION ADMINISTRATION AGREEMENT DATED 28th FEBRUARY 2011

Purpose of Report

This report provides information to support the termination of the Pension Administration Agreement and enable the Minister to agree its termination under the terms of the agreement.

Background

The Pension Administration Agreement between the Committee of Management of the Public Employees Contributory Retirement Scheme (PECRS) and the Minister for Treasury & Resources was signed in February 2011. The agreement set out the services to be provided by the Administrator in administering the scheme. These included the routine administration of scheme member benefits, collection of contributions and payment of benefits and the preparation of Annual Accounts.

In 2013 the Scheme Secretary for PECRS Committee of Management took on the additional role of Scheme Secretary for the JTSF Management Board. At this time some administrative activities with regard to the PECRS investments transferred to the Treasury. These included updating the Statement of Investment Principles on behalf of the Committee of Management, implementing investment decisions agreed by the Committee of Management and co-ordinating legal due diligence for investment manager appointments on behalf of the Committee. In 2013, a variation to the Pension Administration Agreement was made to include these additional activities undertaken by the Treasury.

Review of pension scheme

During the period 2012-15 a review was undertaken of the main public sector pension scheme, the Public Employees Contributory Retirement Scheme (PECRS). This lead to the introduction of the career average pension scheme, the Public Employees Pension Scheme (PEPS) and also an updating of the general administrative provisions around the operation of the scheme to meet best-practice.

In November 2015, the Public Employees (Pension Scheme) (Administration) (Jersey) Regulations 2015 were agreed by the States Assembly. This introduced a requirement for the Committee of Management, in consultation with the Administrator, to produce a Pension Administration Strategy. The Pension Administration Strategy includes the responsibilities of the Administrator that were previously included within the Pension Administration Agreement. This means that the Pension Administration Agreement has been superseded and can be terminated.

Termination of the Pension Administration Agreement

The Chairman of the Committee of Management has requested that following the preparation and adoption of the Pension Administration Strategy it is now desirable for the Pension Administration Agreement to be terminated.

The termination provision in the Agreement is contained in Clause 23 and confirms that the Committee of Management and the Administrator may terminate the Agreement by giving to the other not less than the “Required Notice Period”, defined elsewhere in the Agreement as one year’s notice in writing. However, provided both parties agree the Committee of Management see no reason why this requirement of a specific notice period cannot be waived. The Committee of Management have agreed to waive the one year notice period.

Recommendation

To agree the termination of the Pension Administration Agreement.

Reason for Decision

Following the preparation and adoption of the Pension Administration Strategy under Regulation 20 of the Public Employees (Pension Scheme) (Administration) (Jersey) Regulations 2015, the Pension Administration Agreement has been superseded and can therefore be terminated.

Accordingly the Committee of Management has asked the Minister to agree the termination of the agreement and waive the specific notice period defined within the agreement.

Resource Implications

There are no financial or no staffing implications from the decision.

Report author : Director of Accounting Services

Document date : 31 August 2017

Quality Assurance / Review : Head of Decision Support

File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2017-0117 - Termination of the Pension Administration Agreement

MD sponsor : Treasurer of the States

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