Transfer of Budget between Heads of Expenditure to settle pre1987 PECRS Debt

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A decision made on 13 June 2014

Decision Reference: MD-H-2014-0035
Decision Summary Title :	DS - Transfer of Budget between Heads of Expenditure to settle pre1987 PECRS Debt		Date of Decision Summary:	12th June 2014
Decision Summary Author:	Finance Director		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 :	WR - Transfer of Budget between Heads of Expenditure to settle pre1987 PECRS Debt		Date of Written Report:	12th June 2014
Written Report Author:	Finance Director		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Transfer of Budget between Heads of Expenditure to settle pre1987 PECRS Debt
Decision(s): The Minister approved the transfer of £1,908,619 from the Housing Capital Rolling Vote to Housing Revenue head of expenditure in order to settle the Pre1987 PECRS debt.
Reason(s) for Decision: In order for to comply with the requirements of Article 8 of the Social Housing (Transfer) (Jersey) Law 2013 and for Andium Homes Limited to be accepted as an admitted body to the Public Employees Contributory Retirement Scheme, the Pre1987 debt must be settled by the 30th June 2014. As there are no funds available in the Housing Revenue Head of Expenditure for this purpose this transfer enables that settlement to be made.
Resource Implications: The Housing Capital Rolling Vote to reduce by £1,908,619 and the Housing Revenue head of expenditure to increase by an identical amount. Under article 18(1)(a) of the Public Finances (Jersey) Law 2005 the Minister for Treasury and Resources can approve transfers of budget between Heads of Expenditure where such a transfer is required to comply with Accounting Standards.
Action required: Finance Director to liaise with the Treasury and Resources Department to obtain the Minister for Treasury and Resources’ approval for a transfer between Heads of Expenditure and then to arrange settlement of the liability.
Signature:		Position: Minister
Date Signed:		Date of Decision (If different from Date Signed):

Transfer of Budget between Heads of Expenditure to settle pre1987 PECRS Debt

Date of Report:- 12th June 2014

Settlement of the Pre 1987 Debt in the Public Employees Contributory Retirement Scheme

REPORT

Background

Following approval of P.33/2013 the Reform of Social Housing on 16th May 2013, the States approved P.63/2013 the Draft Social Housing (Transfer) (Jersey) Law 201- (the Law) on 17th July 2013.

The Law was subsequently approved by the Privy Council on 9th October 2013 and registered in the Royal Court on 18th October 2013.

Article 8 of the Law relates to the transfer of the employees of the Housing Department to Andium Homes Limited on 1st July 2014. Employees will transfer on their existing terms and conditions, including pension rights and obligations. In order for Andium Homes Limited to be accepted as an admitted body to the PECRS, the “Pre-1987 debt” which relates to the Housing Department must be settled on or before the 30th June 2014. The amount required to settle the debt is £1,908,619.

A copy of the valuation report from AON Hewitt is attached for reference.

The Department does not have a revenue budget for this purpose. There is however an amount of unallocated budget in the Housing Capital Rolling Vote which can be used. The sum of £2,135,000 was included in the 30 year business case that accompanied P33/2013, so adequate provision has been made for this payment to be made in the long term and the Board of Andium Homes Limited are well aware of the commitment to pay this sum.

Under article 18(1)(a) of the Public Finances (Jersey) Law 2005 the Minister for Treasury and Resources can approve transfers of budget between Heads Of Expenditure where such a transfer is required to comply with Accounting Standards.

Recommendation

The Minister is recommended to approve the transfer of £1,908,619 from the Housing Capital Rolling Vote to the Housing Revenue Head of Expenditure and that a request is made to the Minister for Treasury & Resources to approve the transfer between Heads of Expenditure in order that the PECRS liability can be discharged ahead of the 1st July 2014 transfer date.

Report Prepared by:- …………………………………… Date:- ……………………….

John Hamon, Finance Director

Report Approved by:- …………………………………… Date:-………………………...

Ian K Gallichan, Chief Officer