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 This means that the Pension Administration Agreement has been superseded and can be terminated.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 |