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Publications – Annual meeting report 2013
Qs with As

Question 1

Is WYPF concerned about reports in the press that Eric Pickles, the Communities Minister, is to target L.G. Pension Schemes to fund government infrastructure developments?

There has been a great deal of talk about using Local Authority Pension Funds to stimulate local economies & infrastructure investment. Does WYPF have any plans in this area?

Answer 1

WYPF have investments in local companies, such as Morrisons, regionally active private equity funds and infrastructure. All these investment decisions have been based on the criteria which have resulted in the excellent investment returns reported today.

WYPF have no plans to change these criteria.

Question 2

When is the date of pensions increase decided upon?

And when can pension fund members find this out?

Answer 2

Increases to pensions are worked out on the rise in consumer prices index from Sept to Sept of the previous year and is announced in November. Increase come into effect from the first Monday on or after the 6 April.

WYPF publishes information on this on our website and in our spring newsletter.

Question 3

Since at least 7 of the top 10 equity holdings have poor moral/environmental records could we have a show of hands to monitor if the membership is happy with increased income at the expense of our children and grandchildren?

Answer 3

It is not appropriate to have a show of hands at this meeting. Members of the Investment Advisory Panel have a duty to invest the Fund in the best interest of the members, which it does.

In addition, the Panel works with the Local authority Pension Fund Forum to engage jointly with other funds on environmental, social and government issues, and is also a signatory to the Carbon disclosure Project.

Question 4

In response to a letter of mine, you informed me that the respective RPI/CPI figures for the last 3 years have been:
2011 RPI 4.6% / CPI 3.1%
2012 RPI 5.6% / CPI 5.2%
2013 RPI 2.6% / CPI 2.2%

In 2011 I lost 1.5% of my pension. This loss has increased to 2.5% in 2013 and will get bigger each year for the rest of my life. Can you inform us every year in the newsletter what both indices are and also give the new compound figure to remind us what we are losing?

Answer 4

Unless there is a change to the law pensions will increase by CPI. WYPF sees no benefit in informing members what the rate of increase would have been if they would have increased by RPI.

Question 5

How will the fund cope with a probable decrease in staff paying into a fund and at potentially reduced rates?

Can it guarantee payout rates promised in advance to current members?

Answer 5

The LGPS is a statutory scheme and as such is fully underwritten by the Secretary of State. The benefits payable are defined in legislation and therefore set out in law.

Every three years our Actuary carries out an actuarial valuation to assess the financial position of the fund and to recommend contribution rates to be paid by employers who participate in the fund over the following three years. This is to ensure that assets will continue to increase, so that they will be sufficient to meet benefits as they accrue for existing members and that pensions continue to be paid to existing and future pensioners.

Any changes made to benefits will only affect future benefit accrual, pensions already earned will be guaranteed.

Question 6

I note that the number of joiners have increased by 2,500 since 2012 and leavers decreased by 3,500. Does this mean there has been an increase in local government employees? If so, good news after a few years of cuts.

Answer 6

Total membership of the Fund has increased from the previous year. However this does not mean that there has been an increase in local government employees. Most of the increase is due to members joining who had previously opted out of the scheme.

Local Authorities continue to be under pressure to cut spending and as a result staffing reductions are expected to continue for at least the next couple of years.

Question 7

There was an appeal against the change from RPI to CPI for index linking our pension increases. Is this still ongoing or has it finally been rejected?

We are still being paid by CPI. Will this ever change back to RPI, which was the pension system when I and others joined it? It looks like they changed the rules to save money for their own ends to suit the government of the day.

Answer 7

The legal challenge was rejected by the High Court in December 2011. Unions acting on behalf of their membership appealed against the decision but this too was rejected by the appeal judges in March 2012.

The matter is now closed.

Question 8

I am a deferred member of the West Yorkshire Pension Fund. I am worried about climate change and how it might impact the value of my pension and my quality of life in retirement. I am glad to know that the fund recognises the material risk posed by climate change through membership of the LAPFF, CDP and IIGCC. Much of that work focuses on engaging with companies to reduce their emissions. However, I’m keen that my pension also supports industries that combat climate change and build a low carbon economy. To that end please let me know:

how much of the fund is invested in industries that facilitate a low carbon economy, and whether the fund will commit to setting and disclosing a target for increased investment in these important sectors over the next 5 years.

Answer 8

Industries that seek to combat climate change and build a low carbon economy are still a relatively small part of the investment market, which is why WYPF seeks to engage with all its investments on this topic.

That said, WYPF does invest directly in this area where it can, and has invested in Funds developing both solar and wind power.