The Hutton report had not allowed them to retain membership of the Local Government Pension Scheme and there was no way to protect against an unforseen increase in costs. Lord Hutton had made further representations to state that he didn’t mean this to apply to local government. The Local Government Employers Organisation had highlighted this potential danger to funding through large numbers of staff leaving. The result would be the Fund would mature or crystallise more rapidly with fewer active members, it was an issue of major concern. He asked for the response to be approved and any questions.
The response was approved. Peter Wallach referred to the deferred tender exercise for the passive management contract that had happened after there had been a disclosure of sensitive information. This had led to a six month standstill recommendation and the existing management arrangements needing to be extended. These had been in place for a number of years and it was regrettable what had happened. Cllr McLachlan asked what the effect of just extending would be on the procurement going ahead. The answer given was that the likely effect was nothing as there’d be no increase in risk as the contract had performed in line with the benchmark and there were no additional costs.
The Chair noted the deferral and the extension of the contract to the 31st March 2012 which was agreed.