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Triennial Valuation 2019

User AvatarPosted by Sam Topham at 02/04/2019 16:43:09

The Fund’s actuary, Hymans Robertson, carries out a Fund valuation to review and amend employer contribution rates every 3 years.  The next valuation will be based on fund membership as at 31 March 2019 with new employer contribution rates coming into effect on 1 April 2020.

This is a statutory requirement and the valuation will look at the total liabilities of the Fund and the liability for individual employers at the valuation date, i.e. what money is needed to meet the projected cost of pension benefits for all active, deferred and pension members.  The result of the individual employer valuation will determine the employer contribution rate for the 3 year period from 1 April 2020.

East Riding Pension Fund have started to plan for the 2019 valuation and over the next few months we will be contacting our scheme employers to provide updates on the valuation process and more information about the valuation.

Member data

One of the key factors which can affect the outcome of the valuation is the quality of member data.  Membership data directly places values on liabilities; the impact of incorrect data can be significant when assessing individual employer liabilities.  The examples provided below show the impact incorrect member data can have on liabilities:

Example 1 - Impact of incorrect start date

Sex

DOB

Start date

Liability (for illustration purposes only)

M

01/12/1955

01/01/1998

£33,800

M

01/12/1955

01/01/1989

£76,000

Sex

DOB

Start date

FTE Salary

Liability (for illustration purposes only)

M

01/12/1955

01/01/1998

£10,500

£50,667

M

01/12/1955

01/01/1998

£15,000

£76,000

Example 2 - Impact of incorrect pensionable pay

With this in mind ERPF are carrying out early data cleansing of all our scheme members and we will contact scheme employers where ERPF identify a significant number of outstanding queries which will impact on the results of the valuation.

In the meantime if any scheme employers wish to review the member data held for their active scheme members they can contact Teresa Eaton-Watts by email at teresa.eaton-watts@eastriding.gov.ukto request an extract of the data ERPF hold for your active members.

Year End 31 March 2019

The data used in the valuation calculations will be taken as at 31 March 2019 and this will be based on the year end data submitted by scheme employers, including CARE earnings and FTE pay.  The 2018 year end exercise generated 1,729 queries against member records which specifically related to earnings and pay figures.  Scheme employers should ensure that earnings and pay figures submitted as at 31 March 2019 are accurate to avoid the wrong liability being assumed against members.

Employer database

Another factor which is used within the valuation calculation is information ERPF hold about scheme employers.  ERPF will be updating this database in preparation for the valuation and may contact individual employers to obtain and clarify information we hold.  Please ensure that the ERPF hold the correct contact details so that we can contact you when we need to.

Any questions regarding the 2019 valuation can be directed to Liz Vollans by email at liz.vollans@eastriding.gov.uk or by telephone on 01482 394175.