Agenda item

The purpose of this report is to present an updated Employer Pension Discretions Policy for approval and adoption.

Councillor Mili Patel (Vice Chair and Deputy Leader and Cabinet member for Finance & Resources) introduced a report from the Corporate Director Law & Governance which presented an updated Employer Pension Discretions Policy.

In presenting the report the Committee was advised that the Policy had been updated in order to facilitate better decision-making and improved employee relations with employers required (in accordance with the Local Government Pensions Scheme Regulations 2013) to keep their discretions policy under periodic review.  Members were advised that the refreshed Employer Pension Discretions Policy outlined 20 selected discretions (as opposed to the four required under regulations) designed to create a framework that would assist the Council in managing its relationship with employees and controlling its budget. Additional details on how the Council proposed to exercise its employer discretion had been provided in Appendix 1 to the report.

Following the presentation of the report, Musrat Zaman (Director of Human Resources and Organisational Development) emphasised that, under the Employer Pension Discretions Policy, there were only specific circumstances under which employers could exercise its discretion, which included flexible retirement and redundancy. This approach assisted in managing staff expectations and clarified the conditions under which they could appeal decisions.

Having thanked Councillor Mili Patel and Musrat Zaman for introducing the report, the Chair then moved on to invite questions and comments from the Committee, with the following comments and issues discussed:

• In response to clarification being sought regarding the consultation and engagement with Trade Unions on the updated Policy Musrat Zaman (Director of Human Resources and Organisational Development) advised that whilst not yet having been formally consulted a meeting was scheduled to take place in the near future to discuss the proposed update of the policy.  Whilst noting the Policy contained no significant change in approach, members were keen to emphasise the importance in ensuring the Trade Unions were consulted, moving forward, at as early a stage as possible.

• Members also sought clarification about the potential impact of the Employer Pension Discretions Policy on employees' expectations regarding redundancy and voluntary redundancy. In response, John Smith (Pensions Manager) clarified that the discretions had no impact on the existing redundancy scheme. The Policy provided an overview of the types of discretion and how the Council intended to exercise these discretions with each case continuing to be assessed on its own merits to manage expectations and protect budgets.

• Further details was sought in relation to the Employer Pension Discretions Policy concerning applications for the early payment of pension benefits on compassionate grounds due to reasons including chronic illness or disability with members keen to ensure that the requirement to submit supporting evidence avoided imposing additional strain on employees seeking to exercise this discretion. Members questioned whether reasonable adjustments in regard to the application process could be incorporated into the Policy. In response, John Smith (Pensions Manager) emphasised that applications on compassionate grounds were primarily intended for employees with caring responsibilities. However, if an employee was applying on their own behalf, they would do so under the Ill Health Retirement Regulation, which was supported through Occupational Health and did not fall within the scope of the Employer Pension Discretions Policy. The Chair highlighted the distinction between applications on compassionate grounds requiring additional information and the Employer Pension Discretions Policy, noting that the latter pertained to policy updates.

In order to provide further clarification and address the concerns highlighted Kim Wright (Chief Executive) recommended that reference be added to Section 6 of the policy to clarify that reasonable adjustments would be taken into account as part of the process in submitting applications on compassionate grounds requiring the submission of additional supporting information. In concluding consideration of the matter, the Chair confirmed that the Employer Pension Discretions Policy adhered to legal and statutory obligations, while also considering the financial management of the pension and other relevant factors.

• In response to further details sought regarding the aggregation of pension benefits under the Employer Pension Discretions Policy John Smith (Pensions Manager advised that several regulations governed this matter, including those enacted in 2008 and more recently in 2013. It was clarified that, prior to 2014, employees wishing to transfer their LGPS benefits to a new employer were required to make a positive election to do so. However, post-2014, the aggregation of pension benefits became automatic unless the employee opted out of the transfer. It was additionally noted that separate aggregations existed for concurrent employment, although the underlying principles generally remained the same.

In thanking officers for the responses and clarification provided, it was RESOLVED to note the pension discretions contained within the policy and approve (subject to incorporation of the additional comment made in relation to application on compassionate grounds their adoption them in line with Local Government Pension Scheme (LGPS) regulations.