Government of Jersey

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made (02/11/2009) regarding: Comment on P.110/2009 - Pension Schemes: Dealing with the Past Service Liability - Comment.

Decision Reference: MD-TR-2009-0176
Decision Summary Title:	Comment on P110/2009 – Pension Schemes: Dealing with the Past Service Liability		Date of Decision Summary:	02 November 2009
Decision Summary Author:	Head of Financial Reporting		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Comment on P110/2009 – Pension Schemes: Dealing with the Past Service Liability		Date of Written Report:	02 November 2009
Written Report Author:	Head of Financial Reporting		Written Report : Public or Exempt?	Public
Subject: Pension Schemes: Dealing with the Past Service Liability – Comment
Decision(s): The Minister approved the comment on P110/2009: Pension Schemes: Dealing with the Past Service Liability to be presented to the States at the earliest opportunity.
Reason(s) for Decision: To enable the Minister’s comment on P110/2009 Pension Schemes: Dealing with the Past Service Liability to be presented to the States.
Resource Implications: Other than those detailed in the report there are no further financial or manpower implications.
Action required: Greffier be requested to present attached comment to the States at the earliest opportunity.
Signature:		Position: Senator P F C Ozouf, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Comment on P.110/2009 - Pension Schemes: Dealing with the Past Service Liability - Comment

Comment on P110

This Proposition will increase the 2009 States' contribution to PECRS from £6.7 million to in the region of £19 million, an increase of £12.3 million, with similar increased costs being incurred for the next 19 years. Whilst the current arrangements and those proposed by Senator Shenton both pay off the debt over a period, because Senator Shenton is proposing a much shorter payback period, the annual amount is naturally significantly higher. These increased costs would have to be met from either a reduction in services or an increase in taxation of £12.3 million. The size of the pre-87 debt is already known and acknowledged, and the increased costs of early repayment could only be warranted if there were significant actuarial or legal reasons which justified a shorter period of repayment of the debt.

This proposition will have no impact on the benefits paid to members of the scheme. The proposition will result in extra costs for the States of Jersey over the next 20 years but will not reduce or enhance benefits paid to scheme members.

Senator Shenton poses questions which suggest that he is uncomfortable with the generational burden created by the debt arrangements. The States actuary comments on this as follows: ‘”In many ways the changed incidence of cost in respect of the debt can be looked at as correcting a lack of pre funding of increases for a former generation, whilst the change to pre-funding of future increases can be looked at as ensuring that the same doesn’t happen again. It is the current generation that is picking up the lion’s share of that cost and adopting a shorter period for the Pre 1987 Debt would increase that burden”. In other words, the current generation is already suffering costs that were built up by a former generation.

The report states that the length of time agreed (82 years) is unacceptably long and out of step with the UK. The States actuary comments: “The new funding regime does not apply to public sector schemes in the UK and, indeed, most of the larger UK public sector schemes are unfunded and operate on a pay as you go basis”. The PECRS is therefore in a significantly better funding position than its UK counterparts at present by virtue of the States having agreed this scheme for repayment of the debt.

Senator Shenton further states: “In the UK employers must agree plans to fill pension scheme deficits within 10 years if possible, not 82 years”. The States actuary comments on this as follows: “.The comment referring to the 10 years is not correct. This refers to a "trigger point" that the UK Pensions Regulator uses for managing its own workload – generally it will not ask for further information about a scheme's funding plan where a number of criteria are satisfied. One of these criteria is that the deficit recovery period is less than 10 years. The Pension Regulator has been at pains to point out that this not a limit or a target, and that longer recovery periods may be justified. This has been emphasised by a recent statement issued by the Pensions Regulator." The States actuary goes on to say that "The debt mechanism appears to be designed to ensure that the liabilities are properly funded.”

In summary the debt arrangement as it currently stands provides for an affordable negotiated settlement of the debt of a previous generation over a justifiable timescale and is way ahead of many other similar UK central government schemes. Accordingly this proposition is not required. Moreover, accepting this proposition would result in an extra cost of £12.3m per annum increasing each year over the next 20 years.

Further details on the origin and history of the pre-1987 debt are laid out in the appendix to this comment - Paper on the PECRS past service liability by Richard Raggett, Secretary to the Committee of Management, prepared for and approved by the Committee of Management, September 2009