The officer introduced the next report on the banking contract as for noting as it had already been approved by Wirral Council’s Cabinet. The EU regulator had insisted that RBS divest some of its branches which it was doing to Santander. Wirral Council and the Merseyside Pension Fund therefore had to come up with interim arrangements as well as an agreement for tender. The agreement would extend the existing contract to the 31st March 2013. The Director of Finance would extend the contract and switch it to another bank if necessary.
The next report was on Local Government Pension Scheme Reform which the officer said was a “customary report”. He referred those present to paragraph 4.1 in reference to the latest information and the high level negotiations going on about the future of public sector pension between the Treasury and the trade unions. Neither DCLG (Department for Communities and Local Government) or the Local Authority Employers organisation was involved in these negotiations, however unfunded public sector schemes such as the NHS pension scheme were also included in these negotiations.
The officer felt there was a concern that LGPS (Local Government Pension Scheme) needs were not properly catered for. Discussions had not reached a final position and the difficulties of strikes were affecting some local authorities. The content of the trade union discussions was outlined at 4.4/4.5. New schemes were based on career average rather than final salary. It was unknown what the proposed level of benefits and accrued rights would be. The level of replacement income would reduce as pay increases. For example at £11000 it would be 80% replacement rate but over £58000 fall to as low as 50%. Other recommendations affecting the contribution rates were outlined in 4.16 to 4.26.