1. Mrs Mings introduced the report which provided information on Fund employers, an update on the McCloud remedy, an update on the Funding Strategy Statement and associated Fund policies, and a proposal for the transfer out of the Oasis Community Learning Trust, including Sodexo Limited. It also advised of a number of admission matters for decision. Mrs Mings responded to comments and questions from the committee, including the following:-
a) concern was expressed about the impact of large groups of schools or academies leaving the scheme and the possible need to attract new joiners to compensate. Mrs Mings advised that when an employer leaves the Fund they take their share of the total assets and liabilities which could impact the Fund’s funding position. There were also costs involved in the administration of these arrangements. Also, as costs were shared across employers, those remaining could see their share increase. The situation would be monitored;
b) asked what would happen if an employer was to go out of business before they were able to pay the contributions they owed the Fund, Mrs Mings advised that the Fund could rely on the guarantee / bond included in the agreement when they joined the Fund which would cover the outstanding costs. A view was expressed that such an agreement should also include issues relating to responsible investment;
c) asked about the particular risks to the Fund of employers in the leisure industry being unable to pay contributions, and the Fund accordingly losing income, Mr Tagg advised that these employers were monitored carefully and the Fund liaised with them and the local authority regarding their continuing business activities. He also said that the Fund relied on the admission agreement made when these employers joined the Fund. Mrs Mings added that individual employers had a responsibility to make sure they could cover their employees’ pension entitlements;
d) fuller information was requested on the extent of liability within the scheme, and how much employers owed, so this could be monitored before it became a problem, and so the committee could be reassured that there was sufficient cashflow to cover liabilities. It would also be helpful to know the required minimum level of funds needed. Mrs Mings assured the committee that officers were monitoring the Fund’s cash position including unpaid contributions to ensure there was sufficient cash to cover pensions payable.
2. The committee RESOLVED to note the report and to agree:
a) to endorse the proposed Funding Strategy Statement and associated Fund policies;
b) to the admission to the Kent County Council Superannuation Fund of Birkin Cleaning Services Ltd (re Kent Catholic Schools Partnership);
c) to the admission to the Kent County Council Superannuation Fund of Ecocleen Services Ltd;
d) to the admission to the Kent County Council Superannuation Fund of Independent Catering Management Ltd (re Fort Pitt Thomas Aveling Academies);
e) that a Deed of Modification be entered into in respect of Orbit South Housing Association Limited;
f) that the Chairman may approve the minutes relating to recommendations b) to e) at the end of today’s meeting; and
g) that, once legal agreements have been prepared for matters b) to e) above, the Kent County Council seal can be affixed to the legal documents.