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Actuarial valuation as at 31 March 2016

Northern Ireland Local Government Officers’ Pension Fund

Prepared for Northern Ireland Local Government Officers' Superannuation Committee Prepared by Alison Murray FFA Laura Hamilton FIA Date 29 March 2017

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Disclaimer

This report and any attachments and enclosures were prepared under the terms of our Agreement with the Northern Ireland Local Government Officers’ Superannuation Committee and on the understanding that it is solely for the benefit of the Northern Ireland Local Government Officers’ Superannuation Committee. Unless we provide express prior written consent no part of this report may be reproduced, distributed or communicated to anyone else and, in providing this report we do not accept or assume any responsibility for any purpose other than that described herein or to anyone other than the addressees of the report. At the request of the Northern Ireland Local Government Officers’ Superannuation Committee, we have consented to their releasing a copy of this report to certain parties and/or via certain communication routes. We consent on the basis that there is no duty of care established toward, and Aon Hewitt disclaims any responsibility or liability arising from, any person having access to the report either directly from the Northern Ireland Local Government Officers’ Superannuation Committee, indirectly from a third party or through any other means. No recipients of the report as a result of that consent are permitted to reproduce, distribute or communicate any part of this report to any other party. Any third party using this report does so entirely at its own risk and no third party is entitled to rely on this report for any purpose whatsoever. No decisions should be taken on the basis of this report by any party other than our client, the Northern Ireland Local Government Officers’ Superannuation Committee, and nothing in this report removes the need for readers to take proper advice in relation to their specific circumstances.

Actuarial valuation as at 31 March 2016

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Executive Summary

The key results of the valuation as at 31 March 2016 are set out below.

There was a shortfall of £262.6M relative to the past service liabilities of £6,082.7M which corresponded to a funding ratio of 96%. The past service liabilities are the amount of assets agreed with the Committee as being required to meet members' benefits, assuming the Fund continues as a going concern.

The aggregate Employer future service contribution rate (the "common rate of employers' contribution") is 19.3% of Pensionable Pay. The aggregate Employer total contribution rate required to restore the funding ratio to 100% using a recovery period of 20 years from 1 April 2017, is 21.0% of Pensionable Pay (if the membership remains broadly stable and pay increases are in line with our assumptions). The comparable figure at the previous valuation was 20.6% of Pensionable Pay using a recovery period of 20 years from 1 April 2014. The contributions payable by each Employer or group of Employers may differ because they allow for each Employer's or group's particular membership profile and funding ratio, and assumptions and recovery periods appropriate to their circumstances.

Actuarial valuation as at 31 March 2016

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Actuarial valuation as at 31 March 2016 Northern Ireland Local Government Officers’ Pension Fund Table of Contents

Introduction 1

Update since the previous valuation 2

Membership data 4

Benefits valued 5

Asset data 6

Funding objective 8

Summary of method and assumptions 9

Past service results 11

Reasons for change in past service position 12

Addressing the shortfall 13

Cost to the Employers of future benefits 14

Risks and uncertainties 15

Individual Employer contribution rates 17

Final comments 19

Appendix 1: Legal framework 20

Appendix 2: Membership data 21

Appendix 3: Membership data by Employer 23

Appendix 4: Benefits 33

Appendix 5: Consolidated revenue account 39

Appendix 6: Assumptions used to value the liabilities 40

Appendix 7: Membership experience 43

Appendix 8: Rates and Adjustments Certificate 44

Appendix 9: Glossary 59

Actuarial valuation as at 31 March 2016

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Introduction

This report has been prepared for the Committee. It sets out the results and conclusions of the funding valuation of the Northern Ireland Local Government Officers' Pension Fund as at 31 March 2016.

This is our actuarial valuation report. It draws together other pieces of work and advice from throughout the valuation process. Appendix 1 Shorthand sets out the legal framework within which the valuation has been completed. Fund Northern Ireland Local Government Officers' Throughout this report, assets and liabilities in Pension Fund respect of defined contribution additional voluntary contributions (or AVCs) have been Committee excluded. Northern Ireland Local Government Officers’ Some shorthand used in this report is explained Superannuation Committee opposite. Some technical pensions terms are Employers explained in the Glossary. Northern Ireland Local Government Officers’ Superannuation Committee, and other employers with employees participating in the Fund Regulations The Local Government Pension Scheme Regulations (Northern Ireland) 2014 (as amended) (and other Regulations as referenced in the Glossary) Pensionable Pay As defined in the Regulations in relation to post-2015 membership Pensionable Service Periods of membership, as defined in the Regulations

Snapshot view The report concentrates on the Fund's financial position at the valuation date. As time moves on, the Fund's finances will fluctuate. If you are reading this report some time after the valuation date, the Fund's financial position could have changed significantly.

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Update since the previous valuation

Financial development The key results from the previous valuation as at 31 March 2013 were: To illustrate the Fund’s financial development since the previous valuation, we compare below The Fund's assets were £4,632M and the past key financial assumptions made at the previous service liabilities were £5,099M, which corresponded to a shortfall of £467M and a valuation with what actually happened. funding ratio of 91%. . Investment return (or discount rate) The aggregate Employer future service The investment return has been higher than contribution rate was 17.0% of Pensionable the average discount rate assumed. Pay.

The Committee agreed Employer contributions from 1 April 2014 over a range of recovery periods designed to restore the funding ratio to 100% over a period not exceeding 20 years. The resulting aggregate Employer contributions were:

Year from 1 % of Additional April Pensionable monetary Pay contribution (£M)

2014 20.0 3.5 . Inflationary pay and pension increases Increases to pay were lower than assumed, and increases to pensions in payment were on 2015 20.0 3.6 average lower than assumed.

2016 20.0 3.8

The amount payable over 2016/17 was scheduled to increase on 1 April 2017 and each 1 April thereafter by approximately 3.9% a year. In addition the Employers paid contributions in respect of any additional strains arising on early retirement or due to increases in benefits. Members also paid contributions required by the Regulations.

Where material we show the financial impact of the above developments later in this report.

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Other key developments since the previous valuation

As well as the contributions paid to the Fund scheme. The “staging date”, from which the since the previous valuation and the returns auto-enrolment duty applies, varies between achieved on the Fund's assets, there have been individual employers. Over the period since the following material developments since the the previous valuation, a number of the previous valuation date: Fund’s employers have been impacted and this has led to an increase in new members . 2015 Scheme joining the Fund. A new benefit structure was introduced for . Indexation of GMPs Pensionable Service from 1 April 2015. The key features are: On 6 April 2016 the Government introduced the new State Pension. A consequence of – Career average structure the legislation was that the mechanism – Accrual rate of 49ths which previously provided fully indexed pension payments to public servants Pensions revalued by CPI before – ceased to apply in relation to the GMP retirement element of pension. Normal Pension Age linked to State – On 1 March 2016 HM Treasury announced Pension Age an interim solution to the indexation of – Changes to member contribution rates GMPs in public service pension schemes, including the Local Government Pension – Member contribution rates based on Scheme. The implications of this are that actual (previously full time equivalent) the Fund became responsible for paying full pay pension increases on the GMP for members – Introduction of a 50:50 option, with who reach their State Pension Age between member contribution rate and pension 6 April 2016 and 5 December 2018 accrual rate both half rate inclusive. The results of this valuation allow for this change. – An underpin to pensions for members within 10 years of age 65 in April 2012. Benefits for Pensionable Service before 1 April 2015 are protected, and calculated by reference to retirement ages in force before the 2015 Scheme was introduced. The link to final pay, (where pay is calculated using the 2009 Scheme definition), for pre 2015 benefits remains for active members. The introduction of the 2015 Scheme was allowed for in our previous valuation and the Employer contributions set were based on the 2015 Scheme benefits. Allowance for the difference in the contributions paid from 1 April 2014 and 31 March 2015 and the benefits being accrued based on the pre 2015 Scheme has been made as part of this valuation. . Auto-enrolment Between 2012 and 2018 all UK employers will have a duty to commence automatically enrolling employees who satisfy certain criteria into the National Employment Savings Trust (NEST) or, if it satisfies certain requirements, their own pension

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Membership data This valuation is based on membership data as at 31 March 2016 supplied to us by the Committee.

A summary of the membership data is included in Appendix 2. The chart below shows how the membership profile of the Fund has changed over the last three valuations. During this period, the Fund has matured slightly with the proportion of non-actives increasing from 51% of the Fund's membership at 31 March 2010 to 54% at 31 March 2016. The increase in active membership since the previous valuation can in part be attributed to the introduction of auto-enrolment.

Note: The deferred membership numbers above include members who had yet to decide whether to take a refund of contributions. We have carried out some general checks to satisfy ourselves that: . The information used for this valuation is broadly consistent compared with the information used for the previous valuation and also with that shown in the Fund's Annual Report and Accounts. . The numbers of members included in this valuation can be reconciled against those included in the previous valuation. However, the results in this report rely entirely on the accuracy of the information supplied. The Committee should notify us if the data we have used is incomplete or inaccurate.

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Benefits valued

Members are entitled to benefits defined in the Regulations. Different benefits apply to Pensionable Service before 1 April 2009, between 1 April 2009 and 31 March 2015, and after 31 March 2015. A summary of the benefits valued is given in Appendix 4.

Discretionary benefits management mechanism will be carried out by the Government Actuary’s Department as at Employers have discretion over payment of 1 April 2016, but any changes to members’ certain benefits and it is not practical to allow for contributions or benefits that may arise will not the policies of each Employer. Most be known for some time and we do not expect discretionary benefits are financed as they any changes to be implemented before 1 April occur, so the financial impact on this valuation is 2019. minimal. No specific allowance has therefore been made for benefits which are granted at the GMP equalisation and indexation discretion of the Employer. On 28 November 2016 HM Treasury State Pension Age changes commenced a consultation process on the indexation and equalisation of GMP in public Normal Pension Age for Pensionable Service on service pension schemes. The outcome of this or after 1 April 2015 is State Pension Age consultation process is unknown and so this (SPA), or age 65 if higher. SPA is currently valuation does not allow for any funding of full transitioning from age 65 (60 for women) to age indexation or equalisation of GMPs beyond 68 by 2046. those already announced. The results of this On 1 March 2016 the Department for Work and valuation do allow for the changes which have Pensions published the Terms of Reference for already been implemented to the indexation of a review of SPA. It has subsequently published GMPs for members who reach their State two reports that will help inform its review. Pension Age between 6 April 2016 and 5 However, as the outcome of the review is not December 2018 inclusive. yet known, no allowance has been made within Inflation measure the valuation for any changes in SPA beyond those which have already been announced. The Consumer Prices Index (CPI) is currently used to index pensions in payment and Local Government Pension Scheme deferment, and to revalue members’ CARE Regulations and the cost management accounts for service after 31 March 2015. mechanism In November 2016 the Office for National Our valuation reflects our understanding of the Statistics announced that a different index Regulations in force at the valuation date. Any “CPIH” which also makes allowance for owner- future changes may affect the conclusions in occupier housing costs, is to be its preferred this report. inflation measure in future. We have made no allowance in this valuation The Government has not yet announced for any future potential changes to member whether CPIH will replace CPI as the measure contributions or benefits resulting from the cost for indexing public service pensions. This management mechanism under the valuation therefore continues to make allowance Regulations. The first valuation for the purposes for indexation and revaluation to be based on of calculating the Scheme cost under the cost CPI.

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Asset data

The audited accounts for the Fund for the year ended 31 March 2016 show the value of the assets to be £5,820.1M at the valuation date.

The assets of £5,820.1M were invested as follows:

. This summary excludes assets for defined contribution AVC accounts.

The Statement of Investment Principles describes the Fund's investment strategy as follows:

. The Committee aims to invest the assets of the Scheme prudently to ensure that the benefits promised to members are provided, and to provide reasonable stability in contribution rates for the employers.

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. To meet this aim the Committee's overall investment objective is to exceed price inflation and general salary growth over long periods. The overall investment target is to exceed the Consumer Price Index (CPI) by 5% per annum, to be measured over a three and five year period. . The Fund’s target asset allocation to be implemented over the medium term is set out below. It also sets out the approximate assumptions made about the real return for each asset class in determining the strategy as at 31 March 2014.

Target Real Asset Class Weighting Return % % p.a.* UK Equities 17.5 5.5 Overseas Equities 50.0 5 Index-linked gilts 3.5 0.5 Fixed bonds 9.0 1.5 Property - Core 10.0 4.5 Property – Index-linked 5.0 3.5 Alternatives 5.0 N/A

* Note: Real return is in relation to CPI.

For the purpose of modelling the required Probability of Funding Success and hence deriving the discount rate to be adopted for the scheduled body funding target at 31 March 2016 we have allowed for the target asset allocation provided above.

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Funding objective

Terminology Past service liabilities This is the present value of the benefits to which members are entitled based on benefits accrued to the valuation date, assessed using the assumptions agreed between the Committee and the Fund Actuary. Funding objective To hold sufficient and appropriate assets to meet the past service liabilities Funding strategy statement Sets out the Committee's strategy for meeting the funding objective

The Committee's funding objective is to hold employers in the Main Employer Group assets which are at least equal to the past assumes indefinite future investment in service liabilities i.e. to meet the funding assets similar to the Fund's holdings at the objective. valuation date (allowing for any known or planned changes to the long term In order to calculate the past service liabilities investment strategy as appropriate). and the cost to the Employers of future benefit . For any employers where, post-exit, a long- accrual, the benefits paid out by the Fund are term secure employer would take over the estimated for each year into the future. The funding of the employer's liabilities, (known estimated benefit payments are then as "subsumption") the discount rate is the 'discounted back' to the valuation date using an same as that adopted for the Main agreed rate of interest known as the discount Employer Group. rate. . For orphan bodies, the discount rate has The benefit payments from the Fund are regard to the possibility that participation expected to be made for a very long period – might cease at any time and anticipates a the chart below shows the cashflow pattern for move to a low risk investment portfolio made up of long dated Government bonds the current membership of a typical LGPS fund (of appropriate nature and term) at (based on past service benefits). Most cessation. cashflows are linked to future levels of salary growth and inflation. . For certain other employers, an intermediate funding target has been introduced. These employers are considered by the Committee to be less financially secure than those in the Main Employer Group but nevertheless sufficiently financially secure that the Committee may continue to assume investment in assets of higher risk than government bonds for a longer period, with the intention of moving to the ongoing orphan body funding target over time. Source: 2016 valuation for a "typical" LGPS fund . This valuation has been undertaken on a prudent basis. Prudence is achieved The discount rate through the use of discount rates (expected The Funding Strategy Statement describes the return assumptions) which have a better risk based approach used to set the funding than evens chance of being achieved by the Fund’s medium term investment strategy. strategy and hence the discount rate. Under this risk based approach: An explanation of subsumption, orphan and intermediate bodies is given in the Glossary. . The discount rate for the secure long term

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Summary of method and assumptions The Committee agreed the assumptions used to calculate the past service liabilities and the cost of future benefit accrual. The table below summarises the key assumptions, together with those used for the previous valuation, and the reasons for any change. Further details of all of the assumptions are set out in Appendix 6.

Assumption This valuation Previous Rationale for change valuation

In-service discount rate

Main Grouped Employers 4.5% pa 5.2% pa Updated to reflect the funding target Committee's attitude to risk Intermediate body funding 4.5% pa not applicable and financial conditions at target 31 March 2016. Orphan body funding target 4.5% pa 5.2% pa Average in-service discount rate 4.5% pa 5.2% pa

Left-service discount rate

Main Grouped Employer 4.5% pa 5.2% pa Updated to reflect the funding target Committee's attitude to risk Intermediate body funding 3.5% pa not applicable and financial conditions at target 31 March 2016. Orphan body funding target 2.5% pa 3.9% pa Average left-service discount 4.3% pa 5.1% pa rate

Rate of revaluation of pension 2.0% pa 2.4% pa Updated to reflect the accounts outlook for CPI inflation at 31 March 2016.

Pension increases (on 2.0% pa 2.4% pa Updated to reflect the pension in excess of GMPs) outlook for CPI inflation at 31 March 2016.

Pensionable Pay Increases 3.5% pa 3.5% pa Updated to reflect financial expectations at 31 March 2016.

Post-retirement mortality Standard SAPS Standard SAPS Updated to reflect recent assumption – base table S2P All S1 Normal research and the Fund's pensioners Health tables pensioner mortality tables with with scaling experience since the last scaling factors factors of: valuation. of: Men: 110% Men: 95% Women: 110% Women: 90%

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Post-retirement mortality CMI 2014 core CMI 2012 core Updated to reflect more assumption – future projections with projections with recent CMI publications and improvements long-term long-term our view of best estimate improvement improvement improvements. rate of 1.5% pa rate of 1.5% pa

We show below the assumed life expectancies for current members resulting from these mortality assumptions:

Assumed Life Member currently aged 65 Member currently aged 45 expectancy at age 65 This valuation Previous This valuation Previous valuation valuation . Men 23.1 22.0 25.3 24.2 Women 25.7 24.5 28.0 26.8

In our view these assumptions are appropriate for the purposes of the valuation, and setting Employer contributions to the Fund. As for the previous valuation, the past service liabilities have been calculated using the projected unit method. This method, with a one year control period, has also been used to calculate the cost of future benefits building up for most Employers. The attained age method has been used for Employers who do not admit new employees to the Fund. For orphaned liabilities i.e. liabilities in respect of former employers where there is no future funding from those employers, the discount rate used is a "low risk" discount rate, derived as the yield on long term UK government bonds, with no allowance for outperformance of the Fund's assets above that yield. This discount rate was 2.1% p.a. as at 31 March 2016. Shared risks Funding gains or losses arising from the following risks are pooled across all Employers in the Fund.

Risk Method Cash sum on death in Shared in proportion to the payroll of active members service

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Past service results

A comparison of the Fund's past service liabilities with the assets is shown below. The past service liabilities have been calculated using the assumptions described in the previous section.

£M

Value of past service benefits for

Actives 2,950.5

Deferred members 627.1

Pensioners 2,505.6

Total past service liabilities 6,082.7

Value of assets 5,820.1

Past service surplus / (shortfall) (262.6)

Funding ratio 96%

Employers will need to pay additional contributions to remove this shortfall. This is considered later.

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Reasons for change in past service position

At the previous valuation the Fund had a shortfall of £466.9M. The funding position has therefore improved by £204.3M over the period.

The chart below shows the key reasons for the change in funding position.

As the chart shows, the main factors which have led to an improvement in the funding position are: . Investment returns above the discount rate adopted at the 2013 valuation . Lower than assumed pay and pension increases . Contributions paid by employers towards paying off the deficit disclosed at the 2013 valuation . Changes to the demographic assumptions This has been partially offset by the following factor which on its own led to a deterioration in the funding position: . The change in the financial assumptions (principally the fall in the discount rate relative to inflation)

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Addressing the shortfall

Employers will need to pay additional contributions to remove the shortfall.

We have agreed with the Committee a recovery plan such that the shortfall will be removed by payment of additional contributions by the Terminology Employers over a range of different recovery Recovery plan periods not exceeding 20 years. A plan for making good any shortfall relative The assumptions used to calculate the recovery to the past service liabilities. plan are the same as those used to calculate the past service liabilities. Recovery period Across the Fund as a whole, the contributions The period for which contributions are required to remove the shortfall using a adjusted to remove the shortfall (or surplus). recovery period of 20 years from 1 April 2017 Shortfall contributions would be £14.8M pa, increasing at 3.5% pa. This is equivalent to approximately 1.7% pa of The additional contributions to remove the Pensionable Pay assuming the membership shortfall by the end of the recovery period. remains broadly stable and pay increases follow our assumptions.

In practice, different recovery periods apply to individual Employers or groups of Employers in the Fund. The actual contributions to be paid by each Employer or group are set out in the Rates and Adjustments Certificate and reflect the Employer's or group's specific recovery period and funding position. In most cases deficit contributions are set as monetary amounts. Level deficit recovery contributions have been agreed for employers within the Main Employer Group. For some Employers, contribution increases will be phased in over a number of years (or 'steps') as permitted by the Funding Strategy Statement.

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Cost to the Employers of future benefits The table below shows the aggregate calculated cost to Employers at the valuation date of benefits that members will earn in future. Contributions at the aggregate Employer contribution rate would be appropriate if the Fund had no surplus or shortfall.

These rates have been calculated using the same assumptions as used to calculate the past service liabilities.

% of Pensionable Pay

Value of benefits building up 25.0%

Death in service cash sum 0.2%

Administration expenses 0.4%

Less member contributions (6.3%)

Net cost to the Employers 19.3%

The aggregate Employer future service The rate has also increased as a consequence contribution rate is 19.3% of Pensionable Pay. of the take up of the 50:50 scheme being lower than assumed in the 2013 valuation which, due Employers will also pay additional contributions to no experience being available in that to remove the shortfall for past service liabilities, valuation, was set equal to the assumption used or, in some cases, where individual employers by the Government Actuary’s Department when are in surplus, pay lower contributions to reflect costing the Scheme. In practice the take up rate this surplus. has been extremely low and has been reflected in our assumption for the 2016 valuation. The main factor which has led to an increase in the future service contribution rate is the change in the financial assumptions (principally the fall in the discount rate relative to inflation).

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Risks and uncertainties

The Fund faces a number of key risks which could affect its funding position.

These risks include: To quantify some of these risks, the chart on the following page shows the approximate impact of . Funding risk – the risk that the value placed on the past service liabilities is set too low the following one-off step changes on the and contributions paid into the Fund prove Fund's funding position (all other elements of insufficient to meet the payments as they the valuation basis being unchanged): fall due. . Life expectancy at age 65 is three years . Employer risk – the risk that an Employer is longer than anticipated (with corresponding no longer able to meet its liabilities in the increases at other ages). Fund. For example, due to the insolvency of . A 1% pa fall in long term expected an Employer. investment returns (the discount rate) with . Investment risks – the risk that investment no change in asset values. returns are lower than allowed for in the In practice, if changes in financial market valuation, and also that the assets are conditions resulted in a reduction in the volatile and move out of line with the expected investment return and the liabilities, so the funding position is not discount rate were reduced, it is possible stable. that there would be some compensating . Longevity risk – the risk that Fund members change in asset values. This effect is not live for longer than expected and that shown in the chart on the next page. pensions would therefore need to be paid . A 1% p.a. increase in expected price for longer resulting in a higher cost for the inflation (measured by CPI), with no change Fund. in asset values. . Inflation risk – the risk that inflation is higher . A 25% fall in the market value of equities than expected, resulting in higher pension (with no change in bond markets) and no increases (and payments to pensioners) change in the discount rate. than allowed for in the valuation. In practice, if changes in financial market . Options for members (or other parties) – the conditions resulted in a reduction in asset risk that members exercise options resulting values the expected investment return and in unanticipated extra costs. For example, the discount rate may increase, i.e. it is members could exchange less of their possible that there would be some pension for a cash lump sum than allowed compensating change in liability values. for in the valuation. This effect is not shown in the chart on the . Legislative/Regulatory risk – the risk that next page. changes to general and LGPS specific . A 1% p.a. increase in expected real regulations, taxation, national changes to Pensionable Pay increases. pension requirements, or employment law result in an increased cost of administration, Further information on the risks and actions investment or funding for benefits. taken by the Fund to mitigate them can be found in the Fund's Funding Strategy Statement.

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Risks and uncertainties

The chart below shows the approximate impact on the funding ratio of the Fund under a number of different scenarios.

The scenarios considered are not 'worst case' The analysis demonstrates that on the scenarios, and could occur in combination approach used the Fund is susceptible to: (rather than in isolation). . Falls in expected investment returns (the The future service contribution rate is also discount rate), to the extent not matched highly sensitive to a number of the above by higher asset values factors: falls in expected investment returns, . Falls in the market value of equities, to rising inflation expectations and increases in life the extent not offset by higher expected expectancy. future returns All the risks considered have a negative impact . Rising inflation and pay increase on the funding ratio. Opposite movements could expectations also apply for each scenario which would result in an increase in the funding ratio. . Members living longer than expected

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Individual Employer contribution rates

Employers, or groups of Employers, are set their own contribution rate which reflects their specific circumstances.

The Employer contribution rates are set by the The contributions payable by individual Fund Actuary taking into account a number of Employers are set out in Appendix 8. factors including: The aggregate Employer contributions certified . Regulation 68 – which requires the Actuary for the 3 years from 1 April 2017 can be to have regard to: summarised as follows: – The existing and prospective liabilities – The desirability of maintaining as nearly Year % of Aggregate a constant a common rate of employers’ from 1 Pensionable contribution contribution as possible April Pay amount (£M) – The Committee's Funding Strategy Statement, and 2017 18.3% 18.5 – The desirability of securing long-term 2018 19.2% 18.7 cost efficiency of the Fund. . The results of the valuation. 2019 20.2% 18.8 . Any individual adjustments to the common rate by reason of any circumstances . The annual contribution amounts above are peculiar to the employer the aggregate of the additional contribution . Discussions between the Actuary, the amounts certified for individual Employers in Committee and Employers. each year. . Contribution rates for Employers which Payments to meet additional costs arising contribute to the Fund are set out in the Rates from early retirements and other increases and Adjustments Certificate in Appendix 8. in benefits are payable in addition. Rates of contribution payable by individual . At the end of the period shown above, the Employers, or groups of Employers, differ annual contribution amounts for each because they take into account the Employer’s employer in the Main Employer Group will or group's particular membership profiles and remain level for each future year in the funding ratios and, in some cases, the recovery period, and for other employers assumptions and recovery periods are specific are anticipated to increase by approximately to the Employer's circumstances. 3.5% pa until the end of the relevant recovery period. Thereafter, aggregate For certain Employers outside the main group contributions are anticipated to be in line who are in surplus, it has been agreed with the with the future service contribution rate of Committee that the Employer may use the that employer. These contributions will be surplus to support the payment of contributions subject to review at future actuarial to the Fund at a rate below the Employer's valuations. future service contribution rate. . Member contributions are payable in addition to the Employers’ contribution rates set out above and in Appendix 8. The member contributions are set out in the Regulations. AVCs may be payable in addition.

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Individual Employer contribution rates cont.

. Contributions by active members and Employers should be paid to the Fund at such time and at such frequency as Terminology required by the Regulations and the Rates and Adjustments Certificate Committee's Pension Administration Strategy. Any monetary shortfall Specifies the contributions payable by the contributions have been calculated on the Employers from 1 April 2017 until 31 March basis that they are payable in regular 2020. instalments over the relevant year.

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Final comments

The key results from this valuation are: The Fund's assets were £5,820.1M and the past service liabilities were £6,082.7M which correspond to . a shortfall of £262.6M and . a funding ratio of 96%. The cost to the Employers of future benefits building up is 19.3% of Pensionable Pay. If the shortfall is removed over 20 years from 1 April 2017, the aggregate Employer contributions needed would be equivalent to 21.0%* of Pensionable Pay until 31 March 2037, reverting to 19.3% of Pensionable Pay thereafter. * if the membership remains broadly stable and pay increases in line with our assumptions.

Developments since the valuation date produced for such employers, the Employer has been included in Appendix 8 with a zero . Market movements since 31 March 2016 contribution requirement in anticipation of the Since 31 March 2016, equity markets have revised certificates being issued. generally risen, although the impact of this has been partially offset by falls in the risk- Monitoring the Fund based discount rate that would be used if In light of the volatility inherent in the value of the valuation were being carried out at a the Fund's assets due to investments in growth more recent date (and falls in bond yields assets , the Committee monitors the funding for Employers on an Orphan Funding position in an appropriate manner on a regular Target). basis. Overall, we believe that market movements The Committee will also consider monitoring the since the valuation date are likely to have position of individual employers, particularly increased the future service (primary) those subject to the ongoing intermediate and contribution rate but are likely to have had a orphan funding target and those which may exit positive impact on the funding ratio in the the Fund before 1 April 2020. Where permitted period to 31 December 2016. Taking these by the Regulations and appropriate, two offsetting factors together, and bearing contributions for those employers may be in mind the long-term nature of the Fund amended before the next valuation. and most of the employers, our opinion is that certifying contributions based on market conditions as at the valuation date remains Next actuarial valuation appropriate. The next formal actuarial valuation is due to . Employers joining or exiting since the take place as at 31 March 2019. valuation date

Contributions for employers joining since 31 If actual experience before the next actuarial March 2016 will be advised separately. valuation is in line with the assumptions in this Similarly, a revised Rates and Adjustments report, we expect the Fund's funding ratio to Certificate will have been prepared as necessary for any employers we have been marginally increase to approximately 96.4%. advised have exited the Fund since 31 This slight improvement would be due to March 2016. Where a revised Rates and shortfall payments certified to be paid before the Adjustments Certificate has not yet been next actuarial valuation.

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Appendix 1: Legal framework

It is a legal requirement to carry out a full valuation at least once every three years.

This report was commissioned by and is Unless prior written consent has been given by produced solely for the use of the Committee. Aon Hewitt Limited, this report should not be disclosed to or discussed with anyone else It is produced in compliance with: unless they have a statutory right to see it. . Regulation 68 of the Local Government We permit the Committee to release copies of Pension Scheme Regulations (Northern this report to the following parties only: Ireland) 2014 (as amended). . Any Employer which contributes to the . The terms of the agreement between the Fund. Committee and Aon Hewitt Limited, on the understanding that it is solely for the benefit . The Department for Communities (Northern of the addressee. Ireland). . The Northern Ireland Audit Office We also permit the Committee to pass our report to the Government Actuary's Department in connection with their statutory duties. None of the above bodies has our permission to pass our report on to any other parties. Notwithstanding such consent, Aon Hewitt Limited does not assume responsibility to anyone other than the addressees of this report.

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Appendix 2: Membership data

Membership data was provided by the Committee. Where this data has been adjusted, or where we have estimated missing data, this is reflected in the data shown in this Appendix.

Active Total Average Average Average members Average pensionable pensionable post 2015 Number service age pay pay pension (years) (£M pa) (£000 pa) (£ pa)

Men 2016 17,735 47.3 405.5 22.9 11.5 455

2013 15,893 47.4 354.8 22.1 13.4 n/a

Women 2016 35,082 45.7 445.2 12.7 6.7 248

2013 28,482 45.8 387.1 13.6 8.4 n/a

Total 2016 52,817 46.2 850.7 16.1 8.3 317

2013 44,375 46.4 741.9 17.1 10.2 n/a

Note: The average ages shown in these tables are unweighted. Pensionable pay at the 2016 valuation is based on the 2015 scheme definition (the 2013 figures are based on the 2009 definition). Pensionable pay is over the year to the valuation date, and actual part-time pay is included for part- timers. Average service at the 2016 valuation is in relation to final salary benefits so is shown to 31 March 2015. The 2016 figures include 421 Councillors (there were an additional 382 to the numbers given above in 2013). Suitable allowance has been made for these in our calculations.

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Deferred members Number Average Total pension Average pension age 4.6(£M pa) (£000 pa)

2016 9,592 46.9 15.9 1.7 Men 2013 7,816 46.8 13.7 1.8

2016 20,635 45.5 20.3 1.0 Women 2013 14,466 45.1 15.8 1.1

2016 30,227 46.0 36.2 1.2 Total 2013 22,282 45.7 29.5 1.3

Note: The deferred pension amounts shown above are at the date of valuation Included in the figures above are 4,787 (2013: 1,589) members who at the valuation date were yet to decide whether to take a refund of contributions, and 288 deferred Councillors. Suitable allowance has been made for these in our calculations.

Pensioners Number Average Total pension Average pension age (£M pa) (£000 pa)

Men 2016 13,420 70.6 90.8 6.8

2013 12,417 70.1 78.7 6.3

Women 2016 13,051 69.4 52.7 4.0

2013 11,080 68.9 42.2 3.8

Dependants 2016 5,345 71.7 12.5 2.3

2013 5,113 70.9 11.0 2.2

Total 2016 31,816 70.3 156.0 4.9

2013 28,610 69.8 131.9 4.6

Note: The pension amounts shown above include the increase awarded in April of the appropriate year. Included in the above figures are 379 (2013: 390) members in receipt of a children’s’ pension, and 83 Councillors in receipt of pensions. Suitable allowance has been made for these in our calculations.

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Appendix 3: Membership data by Employer

The distribution of membership by Employer, as indicated by the data, is shown below.

Number Total Number of Number of Employer Pensionable pensioners Employer Name of active (1) deferred Code Pay and members members (£M) (2) dependants

62 Armagh Planetarium 9 0.241 22 8

Down County Health & 83 - - 3 1 Welfare Fermanagh County Health 84 - - - 1 & Welfare Tyrone County Health 87 - - - 1 Committee Armagh County Welfare 89 - - 1 - Committee Lough Bradan (C.Tyr) 99 - - 2 1 W'works JB Coleraine Harbour 110 3 - 3 6 Commissioners Northern Ireland Fire & 114 259 6.672 125 166 Rescue Service Northern Ireland Housing 115 2,588 62.643 924 3,629 Executive Northern Ireland Tourist 116 116 3.32 109 65 Board Royal College of Nursing 117 - - - 19 for Northern Ireland Arts Council of Northern 118 49 1.418 60 50 Ireland Northern Ireland Local Government Officers' 119 64 1.502 59 14 Superannuation Committee (NILGOSC) Seapark House 122 - - 2 23 Management Committee

123 Linen Hall Library 18 0.393 19 15

Pigs Marketing Board for 125 - - 7 50 Northern Ireland

126 United Dairy Farmers - - 297 708

Royal Belfast Academical 128 59 0.746 24 23 Institution

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Number Total Number of Number of Employer Pensionable pensioners Employer Name of active (1) deferred Code Pay and members members (£M) (2) dependants

129 Jordanstown Schools 3 - 12 26

Glenmona Resource 131 87 2.767 84 96 Centre

132 Bangor Grammar School 46 0.653 13 32

134 Friends School 51 0.588 30 17

136 Campbell College 81 1.235 32 29

137 Belfast Royal Academy 61 0.784 23 45

138 Belfast High School 33 0.438 24 26

139 St Malachy's College 47 0.699 23 27

Seed Potato Marketing 140 - - - 9 Board, Northern Ireland

142 St Columb's College 40 0.836 10 29

St Mary's Christian 145 40 0.648 17 10 Brothers Grammar School

146 Sullivan Upper School 66 0.758 31 25

Christian Brothers 147 30 0.542 20 10 Grammar School

148 Ballymena Academy 34 0.467 15 30

149 Belfast Charitable Society 2 - 63 93 Northern Ireland Local 150 Government Association 9 0.294 26 4 (NILGA) 152 Wallace High School 38 0.638 39 20 Northern Ireland Training 153 - - 9 90 Executive 154 Larne Grammar School 31 0.377 12 16

Agricultural Research 156 - - 45 79 Institute Northern Ireland

157 Royal School, Armagh 64 0.677 20 14

Northern Ireland Council 158 - - - 3 for Educational Research St Patricks Grammar 160 15 0.276 16 9 School

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Number Total Number of Number of Employer Pensionable pensioners Employer Name of active (1) deferred Code Pay and members members (£M) (2) dependants

161 Thornhill College 27 0.586 8 27

162 Armagh Observatory 15 0.595 14 9

Livestock & Meat 163 Commission for Northern 12 0.265 66 38 Ireland

164 University of Ulster 744 14.189 772 1,008

Northern Ireland 165 - - - 4 Agricultural Trust

167 Hunterhouse College 27 0.376 19 18 Council for the Curriculum, 170 Examinations and 310 8.035 146 84 Assessment (CCEA)

172 Rathmore Grammar School 31 0.587 18 13

Our Lady & St Patrick's 173 36 0.534 20 22 College Victoria Voluntary Homes 174 - - 1 - For Girls St Mary's University 175 77 1.882 60 65 College Stranmillis University 176 118 2.281 83 97 College

179 Citybus Limited 687 18.473 356 726 Northern Ireland Fishery 180 22 0.442 3 27 Harbour Authority 181 Enterprise Ulster - - 265 467 Sports Council for 187 128 4.052 99 46 Northern Ireland

188 St Dominic's High School 30 0.467 8 15

189 Ulsterbus Limited 2,140 54.09 1,009 1,855 Northern Ireland 190 - - 1 10 Development Agency 192 Dalriada School 38 0.452 20 27 194 Fold Housing Association 401 7.746 455 203 195 Victoria College 49 0.863 25 18

196 St Patrick's Academy 37 0.536 23 18 Northern Ireland Transport 197 30 1.155 46 37 Holding Company Northern Ireland Consumer 198 - - 1 - Council

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Number Total Number of Number of Employer Pensionable pensioners Employer Name of active (1) deferred Code Pay and members members (£M) (2) dependants

St Joseph's Training 202 School (Adolescent Centre) - - 18 22 Middletown Northern Ireland 203 Federation of Housing 9 0.245 10 11 Associations 204 Ulster American Folk Park - - 5 12 Northern Ireland Railway 206 913 29.466 339 567 Company Limited 208 Dominican College, Belfast 29 0.412 19 23

209 St Michael's College 45 0.536 25 11 Probation Board for 211 336 9.469 190 222 Northern Ireland (PBNI) 212 Strathearn School 35 0.534 21 22

213 Loreto College 18 0.328 6 8

215 Loreto Grammar School 23 0.336 13 15

Foyle and Londonderry 216 56 0.702 15 19 College 218 Royal School, Dungannon 34 0.509 7 15 Local Government Staff 219 10 0.393 3 3 Commission 220 St Mary's Grammar School 63 0.78 24 13 Sacred Heart Grammar 221 29 0.423 14 15 School Council for Catholic 222 56 1.672 38 42 Maintained Schools Northern Ireland Legal 223 - - 235 28 Services Commission

224 Youthnet 4 0.125 11 5 Association of Northern 225 Ireland Education & - - - 1 Library Boards 226 Laganside Corporation - - 20 9 Hearth Housing 230 3 - - 2 Association Limited South Ulster Housing 232 14 0.34 3 3 Association Limited Grove Housing Association 234 4 0.109 2 1 Limited Newington Housing 236 13 0.322 3 2 Association (1975) Limited 237 Woodvale and Shankill Co 7 0.08 2 5

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Number Total Number of Number of Employer Pensionable pensioners Employer Name of active (1) deferred Code Pay and members members (£M) (2) dependants

Habinteg Housing 238 Association (Ulster) 68 1.32 37 15 Limited 239 Apex Housing 213 4.743 168 39 Covenanter Residential 240 1 - - 1 Association Limited St Matthew's Housing 241 4 0.119 - 4 Association Limited Northern Ireland Co- 242 Ownership Housing 48 1.425 17 18 Association Limited Dungannon and District 245 - - 3 - Housing Association Mount Lourdes Grammar 250 32 0.487 7 10 School Community Relations 251 19 0.632 70 12 Council Construction Industry 252 31 0.767 46 45 Training Board (CITB) Road Transport Industrial 253 - - 2 14 Training Board Engineering Training 254 Council for Northern 5 0.165 7 4 Ireland Northern Ireland Open 256 - - 2 - Learning Centre Clothing & Industrial 257 - - 3 6 Training Services Limited

260 Hazelwood College 56 0.875 20 7

Hazelwood Integrated 261 52 0.392 29 7 Primary School Limited 262 Lagan College 55 0.74 30 7 Mill Strand Integrated 263 15 0.17 6 2 Primary School Northern Ireland Rural 265 10 0.301 32 12 Development Council Bridge Integrated Primary 266 33 0.184 6 2 School Enniskillen Integrated 267 5 0.076 - 2 Primary School Aquinas Diocesan 268 43 0.744 12 4 Grammar School

271 Rural Housing Association 12 0.285 4 1

Oakgrove Integrated 273 44 0.721 15 3 College 274 Shimna Integrated College 41 0.509 19 3

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Number Total Number of Number of Employer Pensionable pensioners Employer Name of active (1) deferred Code Pay and members members (£M) (2) dependants

Northern Ireland Council 275 10 0.283 22 7 for Integrated Education

276 Erne Integrated College 4 0.079 2 3

Derry Visitor and 277 12 0.264 3 2 Convention Bureau

Integrated College 278 36 0.349 17 1 Dungannon

Braidside Integrated 279 33 0.19 1 4 Primary & Nursery School

280 Citizens Advice Bureau 1 - 45 6

281 Rainey Endowed School 6 0.149 3 3 Ards Citizens' Advice 282 - - 6 3 Bureau Down District Citizens 283 1 -* 5 - Advice Bureau Drumragh Integrated 284 34 0.476 6 2 College 285 St Louis Grammar School 26 0.387 4 10

287 Lumen Christi College 30 0.434 25 3

Cedar Integrated Primary 288 24 0.154 4 - School Our Lady's Grammar 289 30 0.471 9 8 School 290 Mourne Heritage Trust 6 0.18 11 2 St Joseph's Grammar 309 22 0.276 11 7 School 313 Northern Ireland Hospice 92 2.141 45 35

314 Slemish Integrated College 72 0.571 17 3

316 Malone College 34 0.576 17 6

Ark Housing Association 317 21 0.345 25 2 Northern Ireland Limited Oakgrove Integrated 318 9 0.129 7 4 Primary School Connswater Homes 319 24 0.719 9 1 Limited New-Bridge Integrated 320 20 0.381 10 1 College

321 Millennium Forum 19 0.437 7 2

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Number Total Number of Number of Employer Pensionable pensioners Employer Name of active (1) deferred Code Pay and members members (£M) (2) dependants

322 Methodist College 68 1.089 66 27 Belfast Visitor & 323 42 0.956 28 3 Convention Bureau North Coast Integrated 324 32 0.308 5 4 College 325 Outdoor Recreation (NI) 14 0.379 22 - Spires Integrated Primary 326 11 0.069 5 1 School 327 Ulidia Integrated College 52 0.52 17 3 Comhairle na 328 13 0.375 14 3 Gaelscolaiochta 329 Strangford College 31 0.395 12 5 Loughview Integrated 330 27 0.195 9 - Primary School Windmill Integrated 331 28 0.161 7 1 Primary School Acorn Integrated Primary 332 15 0.147 1 - School Millennium Integrated 333 18 0.141 19 - Primary School Oakwood Integrated 334 30 0.214 21 - Primary School Dominican College, 335 17 0.274 7 3 Portstewart Saints and Scholars 336 23 0.123 5 5 Integrated Primary School General Teaching Council 337 21 0.515 6 2 for Northern Ireland Assumption Grammar 338 18 0.323 10 5 School 339 Sperrin Integrated College 33 0.337 8 2 Youth Justice Agency For 340 - - 309 255 NI Armagh & Down Tourism 341 - - 3 1 Partnership Abbey Christian Brothers 342 28 0.42 8 7 Grammar School Omagh Integrated Primary 343 - - 5 - School 344 Arc21 11 0.415 5 - Maine Integrated Primary 345 18 0.116 2 2 School 347 Armagh Integrated College - - 3 1 Ilex Urban Regeneration 348 6 0.235 19 1 Company Limited Drumlins Integrated 349 25 0.179 7 - Primary School

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Number Total Number of Number of Employer Pensionable pensioners Employer Name of active (1) deferred Code Pay and members members (£M) (2) dependants

Portadown Integrated 350 37 0.201 14 - Primary School Roe Valley Integrated 351 18 0.099 - - Primary School South Eastern Regional 352 334 6.071 234 119 College Belfast Metropolitan 353 351 7.303 239 183 College 354 South West College 214 3.664 139 59 355 Northern Regional College 202 3.662 189 130 North West Regional 356 191 3.638 102 48 College 357 Southern Regional College 330 5.649 168 107 Middletown Centre for 358 30 0.889 8 1 Autism Limited HSG Zander Ireland 359 Facilities Services Limited 3 - - 2 (Bilfinger) 360 ELB (6) - - 5,901 8,318 361 Libraries NI 673 11.335 68 267 Corran Integrated Primary 362 21 0.114 10 4 School 363 St Colman's College 26 0.455 8 3 Graham Asset 364 7 0.12 - 3 Management 365 Alpha Housing Association 5 0.111 4 12

366 City of Derry Airport 38 1.11 13 4 Blackwater Integrated 367 29 0.237 21 5 College Rowandale Integrated 368 23 0.157 3 - Primary School Cranmore Integrated 369 8 0.102 6 - Primary School 370 Amey Community Limited 5 0.101 - 3 Capita Managed IT 371 13 0.372 3 - Solutions Limited Northern Community 372 41 0.786 7 4 Leisure Trust

373 Northern Ireland Screen 25 0.805 5 -

North Belfast Housing 374 17 0.349 22 3 Association Limited Antrim and Newtownabbey 375 745 16.398 434 426 Borough Council Armagh, Banbridge and 376 1,395 27.682 584 553 Craigavon District Council

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Number Total Number of Number of Employer Pensionable pensioners Employer Name of active (1) deferred Code Pay and members members (£M) (2) dependants

377 Belfast City Council 2,447 60.686 1,209 2,056

Causeway Coast and Glens 378 667 15.397 279 479 District Council Derry City and Strabane 379 827 19.377 327 468 District Council Fermanagh and Omagh 380 738 14.728 343 369 District Council Lisburn and Castlereagh 381 863 19.476 591 441 City Council Mid and East Antrim 382 688 15.338 337 488 District Council

383 Mid Ulster District Council 716 14.984 321 315

Newry, Mourne and Down 384 893 19.74 377 483 District Council Ards and North Down 385 764 15.986 514 535 Borough Council Choice Housing Ireland 386 153 3.628 233 105 Limited Phoenix Integrated Primary 387 10 0.089 3 - School

388 Greenwich Leisure Limited 279 5.467 12 -

389 Education Authority 26,361 267.052 9,246 3,698

390 Coleraine Grammar School 38 0.498 18 28

Northern Community 391 4 0.074 - - Leisure Trust 2 392 St Ronan's College 45 0.503(4) - -

St Patrick's Grammar 393 6 0.047 3 - School, Armagh Londonderry Development 904 - - 1 4 Committee

TOTAL 52,817 850.7 30,227 31,816

Notes: 1) Pensionable Pay is over the year to the valuation date, and includes annualised pay for new entrants during the year. Actual part-time pay is included for part-timers. The breakdown above includes Councillors. 2) Deferred members include the number of members who are yet to decide whether to take transfer payments.

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3) For Employers with three or fewer members, Pensionable Pay is not shown for data privacy reasons. 4) The Administering Authority has been advised that for St Ronan's College there were a number of new members missing from the valuation data and the contribution rate has been set by making an approximate allowance for the missing data and additional pensionable pay. 5) The Education Authority Group of Employers (389) includes members under the following employers: . Education Authority - Belfast Region (27) . Education Authority - South Eastern Region (28) . Education Authority - North Eastern Region (29) . Education Authority - Southern Region (30) . Education Authority - Western Region (31) . Bloomfield Collegiate School (166) . Youth Council for Northern Ireland (255)

6) The liabilities of ELB (360) are shared between the Education Authority (389) and Libraries NI (361). 7) There were 2 new employers who joined since the 31 March 2016 valuation date. They are not included in the data summary above but have been included in the Rates and Adjustments Certificate, as their contributions have been calculated in a consistent manner to the active employers at the valuation data, based on data provided after commencement.

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Appendix 4: Benefits

The benefits of the Local Government Pension Scheme are set out in Regulations, the principal Regulations currently being: . the Local Government Pension Scheme Regulations (Northern Ireland) 2014 (as subsequently amended) . the Local Government Pension Scheme (Amendment and Transitional Provisions) Regulations (Northern Ireland) 2014 (as subsequently amended) A broad summary of the benefits payable to active members as at 31 March 2016 is given below. This reflects our understanding of the Regulations at the time of writing. This may however be subject to change and readers should refer to the Regulations for further details.

Benefits accrued before 1 April 2015 Benefits accrued after 31 March 2015

Type of scheme Final salary Career average revalued earnings (CARE)

Normal Retirement / Pension 65 Linked to State Pension Age (or age 65 if higher) Age

Member contributions No longer applicable Between 5.5% of pay and 10.5% of actual Pensionable Pay dependent on contribution band the member is in

50:50 option Not applicable Members can opt to pay 50% contributions for 50% of member's pension benefit (dependants' benefits not affected)

Pensionable Pay Generally total pay (excluding non-contractual overtime) Generally total pay (including non-contractual overtime)

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Benefits accrued before 1 April 2015 Benefits accrued after 31 March 2015

Final Pay Generally Pensionable Pay over the 12 months prior to Not applicable retirement or earlier exit or, if higher, in one of the preceding two years.

Pensionable service Membership of Fund (years and days), plus periods of Not applicable credited service

Normal retirement pension 1/60 of Final Pay for each year of Pensionable Service on 1/49 of revalued Pensionable Pay received during or after 1 April 2009. membership from 1 April 2015. For each year of Pensionable Service before 1 April 2009: The resulting accumulated pension is called the 'pension account'. . a pension of 1/80 of Final Pay, plus . a cash sum of 3/80 of Final Pay

Retirement cash sum Pension can be surrendered for additional cash sum to a maximum cash sum of one quarter of the total capital value of benefits. Conversion rate is £12 for each £1 pa of pension given up

Early retirement pension Reduced pension payable on retirement after age 60, or Reduced pension payable on retirement after age 55. after age 55 with Employer consent. Pension calculated as for normal retirement but based on Pension calculated as for normal retirement but based on revalued Pensionable Pay up to early retirement date (in Pensionable Service to early retirement date, and reduced relation to final salary benefits), and reduced for early for early payment. payment. Certain categories of member eligible for protection can Certain categories of member eligible for protection can

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Benefits accrued before 1 April 2015 Benefits accrued after 31 March 2015

retire on unreduced pension if their age plus Pensionable retire on unreduced pension if their age plus Pensionable Service is greater than or equal to 85 years, with Service is greater than or equal to 85 years. Employer consent required if under age 60.

Incapacity and ill-health In each case members must In each case members must pensions . . be permanently incapable of efficiently discharging be permanently incapable of efficiently discharging the their current duties to qualify, and duties of the employment they were engaged in to qualify, and . have a reduced likelihood of obtaining gainful employment before reaching Normal Retirement Age. . have a reduced likelihood of being capable of undertaking any gainful employment before reaching Tier 1 Normal Pension Age. . Payable to members with more than 1 year of Tier 1 Pensionable Service. . Payable to members with more than 2 years of . Immediate payment of benefits based on Final Pay at Pensionable Service. exit and potential Pensionable Service that would have been completed to Normal Retirement Age. . Immediate payment of accrued pension, plus an enhancement equal to the amount of earned pension . To qualify for this benefit there must be no reasonable the member would have accrued between the date of prospect of the member being capable of gainful leaving and Normal Pension Age, based on employment before reaching Normal Retirement Age. Pensionable Pay at retirement. . To qualify for this benefit the member must be unlikely to be capable of undertaking any gainful employment before reaching Normal Pension Age.

Incapacity and ill-health Tier 2 Tier 2 pensions (continued) . Payable to members with more than 1 year of . Payable to members with more than 2 years' of Pensionable Service Pensionable Service. . Immediate payment of benefits based on Final Pay at . Immediate payment of accrued pension, plus an

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Benefits accrued before 1 April 2015 Benefits accrued after 31 March 2015

exit and Pensionable Service completed to date of exit enhancement equal to 25% of the Tier 1 plus 25% of the period from date of exit to Normal enhancement. Retirement Age. . To qualify for this benefit the member must have a . To qualify for this benefit the member must have a reduced likelihood of being capable of undertaking reasonable prospect of being capable of gainful any gainful employment before reaching Normal employment before reaching Normal Retirement Age. Pension Age.

Leaving Pensionable Service Pension payable on retirement at Normal Retirement Age Pension payable on retirement at Normal Pension Age is based on Final Pay at exit and Pensionable Service to the pension account revalued to the retirement date. date of exit. Certain categories of member can retire early on unreduced pension if aged 60 or over and their age plus service is greater than or equal to 85 years. Service in this case includes the period between date of exit and date pension commences.

CARE revaluation in service Not applicable In line with increases in the Consumer Prices Index (CPI)

Deferred pension revaluation . Guaranteed Minimum Pensions (GMPs) increase in In line with CPI (subject to a minimum of zero) after leaving deferment in line with State revaluation factors. . Deferred pensions in excess of GMPs increase in line with CPI

Pension increases in payment . GMPs accrued after 6 April 1988 increase at the lower In line with CPI (subject to a minimum of zero) of 3% pa and CPI, with the exception of members who reach State Pension Age between 6 April 2016 and 5

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Benefits accrued before 1 April 2015 Benefits accrued after 31 March 2015

December 2018. . Pensions in payment in excess of GMPs, and GMPs accrued after 6 April 1988 for members who reach State Pension Age between 6 April 2016 and 5 December 2018, increase in line with CPI.

Death benefits A cash sum of 3 x Assumed Pensionable Pay at exit.

Death benefits (continued) A partner’s pension of 1/160 of Final Pay for each year of A partner’s pension of 1/160 of revalued Pensionable Pay Pensionable Service before 1 April 2015. received during membership from 1 April 2015 plus an enhancement to pension of 1/160 of Assumed Pensionable Pay at death for each year between death and Normal Pension Age.

Death benefits (continued) Partners are spouses, civil partners and co-habitees. Children's pensions may be payable.

State pension scheme The Scheme was contracted out of the State Second Pension Scheme until contracting-out was abolished in April 2016.

Protections / underpins Pre 2015 benefits protected (including link to eventual Final Pay). Underpin of benefits on 2009 Scheme structure for members aged over 55 in April 2012. Rule of 85 retained for members aged over 60 on 31 March 2016. Partial protection of Rule of 85 for members aged over 60 on 31 March 2020.

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Benefits accrued before 1 April 2015 Benefits accrued after 31 March 2015

Vesting period A refund of member contributions is paid for members leaving membership with qualifying service of less than 2 years.

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Appendix 5: Consolidated revenue account

We show a summary of the revenue and outgo of the Fund since the previous valuation below, taken from the Fund's Report and Accounts.

Total £000

Fund as at 31 March 2013 4,631,653*

Income Contributions Employer normal 499,191 Employer additional 15,764 Employer special 20,097 Employee 156,686 Transfers-in 24,354 Investment income 269,131 Profits on sales of investments 118,890 Other 867 Total income 1,104,980

Outgo Pensions paid 431,645 Retirement cash sums 131,306 Transfers-out 9,897 Death benefits paid out 14,305 Refunds of contributions on leaving 644 Expenses Investment 43,588 Administration 10,182 Other 16,840 Total outgo 658,407

Change in market value 722,846

Fund as at 31 March 2016 5,820,140

*The 2013/2014 accounts included cashflows in relation to Additional Voluntary Contribution (AVC) Funds and the following years did not, due to a change in accounting requirements in the intervaluation period. The starting asset value at 31 March 2013 including AVCs was £4,650,721,000.

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Appendix 6: Assumptions used to value the liabilities

The assumptions used for calculating the past service liabilities and the cost of future benefit accrual are summarised below.

Financial assumptions

In-service discount rate Main Employer Group funding target 4.5% pa Intermediate funding target 4.5% pa Orphan body funding target 4.5% pa Left-service discount rate Main Employer Group funding target 4.5% pa Intermediate funding target 3.5% pa Orphan body funding target 2.5% pa

Rate of Pensionable Pay increases 3.5% pa (service up to 31 March 2015 only) (in addition to promotional increases)

Rate of CPI price inflation 2.0% pa

Rate of revaluation of pension accounts 2.0% pa

Rate of pension increases on non GMPs 2.0% pa on post 88 GMPs (1) 1.8% pa

Rate of deferred pension increases non GMP 2.0% pa GMP 3.5% pa

Administration expenses 0.4% of Pensionable Pay

Notes (1) Increases at the rate of 2% per annum are allowed for on GMPs for those reaching State Pension Age between 6 April 2016 and 5 December 2018

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Demographic assumptions

Pre-retirement base Males: 50% of Standard SAPS S2P All lives tables mortality Females: 50% of Standard SAPS S2P All lives tables

Post-retirement base Males: 95% of Standard SAPS S2P Normal Health All lives tables mortality Females: 90% of Standard SAPS S2P Normal Health All lives tables

Ill-health retirement Males: 105% of Standard SAPS S2 Ill Health tables base mortality Females: 105% of Standard SAPS S2 Ill Health tables

Improvements to An allowance for improvements between 2007 and 2016 and an allowance mortality for future improvements has been made in line with the CMI 2014 core projections assuming a long-term annual rate of improvement in mortality rates of 1.5% pa for men and women.

Promotional salary Allowance has been made for age-related promotional increases (see increases sample rates below). Withdrawals Allowance has been made for withdrawals from service (see sample rates below). On withdrawal, members are assumed to leave a deferred pension in the Fund. Retirement age Members were assumed to retire at the following ages:

Member group Assumed age at retirement Active members with protected Rule Rule of 85 age (or age 60 if higher). of 85 age (joined LGPS before 1 October 2006 and attained age 60 Any part of their pension payable before 1 April 2020) from a later age will be reduced.

Age 65.

Active members who joined before Post 2015 pensions will be reduced 1 April 2015 and not included in the if the member's State Pension Age group above is projected to be over age 65 at Retirement age that point. (continued) Rule of 85 age (or age 60 if higher). Deferred members who left the

Fund before 1 April 2015 with Any part of their pension payable protected Rule of 85 age from a later age will be reduced.

Deferred members who left the Fund before 1 April 2015 with no Age 65. protected Rule of 85 age

All other active and deferred State Pension Age (or age 65 if members higher)

Retirement cash sum Each member is assumed to surrender pension on retirement, such that the total cash received is 75% of the permitted maximum.

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Family details Each man was assumed to be three years older than his wife/partner. 80% of non-pensioners were assumed to be married or have a spouse, civil partner or co-habitee ('partner') at retirement or earlier death. 80% of pensioners were assumed to be married or have a partner at age 65. Partners were assumed to exhibit the same mortality as pensioners of the same sex who retired in normal health. No allowance for children's pensions.

Retirement due to ill- Allowance has been made for retirements due to ill-health (see below). health Proportions assumed to fall into the different benefit tiers are: Tier 1 70% Tier 2 30%

Take up of 50:50 All members are assumed to remain in the scheme they are in at the date scheme of the valuation.

Sample rates The table below illustrates the allowances made for withdrawals from service and ill-health retirement at various ages. Also shown is the allowance included for promotional pay increases, which is shown as the percentage increase over the next year.

Current age Percentage Percentage leaving Percentage leaving promotional pay the Fund each year the Fund each year increase over year as a result of as a result of Ill- withdrawal from health retirement service 20 3.6% 12.6% 0.00% 25 3.2% 8.3% 0.02% 30 2.0% 5.9% 0.04% 35 1.6% 4.6% 0.07% 40 0.4% 3.7% 0.09% 45 0.0% 3.0% 0.15% 50 0.0% 2.3% 0.35% 55 0.0% 2.0% 0.94% 60 0.0% 1.2% 1.85% 65 0.0% 0.0% 1.85%

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Appendix 7: Membership experience

We have compared the actual numbers of deaths, retirements and other exits since the previous valuation with the numbers expected on the assumptions used for the 2016 valuation:

Type of exit Men Women

Death after retirement in normal health Actual 848 474 Expected 708 460

Death after retirement in ill health Actual 438 207 Expected 400 217

Death in service Actual 57 74 Expected 61 96

Withdrawals (excluding refunds) Actual 1,998 4,759 Expected 1,681 3,402

Ill-health retirements Actual 286 398 Expected 283 448

The above figures are based on an analysis of the number of members who died, retired or left service during the intervaluation period, a so-called "lives" analysis.

The above summary shows that the Fund experienced a higher number of pensioner deaths in the intervaluation period than implied by our assumptions. However, for setting the Fund – specific mortality in retirement assumptions (for both normal and ill health pensioners), we use an analysis weighted by pension amount as this is more reliable for setting assumptions in order to place a value on the liabilities. Using this analysis the number of actual deaths weighted by pension amount is very slightly lower than that expected by our 2016 assumptions (i.e. in the range 97-100% for males and females in normal and ill health).

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Appendix 8: Rates and Adjustments Certificate Actuarial certificate given for the purposes of Regulation 68 of the Local Government Pension Scheme (Northern Ireland) Regulations 2014.

In accordance with Regulation 68 of the Local Government Pension Scheme Regulations (Northern Ireland) 2014 (as amended) (‘the 2014 Regulations'), we certify that contributions should be paid by Employers at the following rates for the period 1 April 2017 to 31 March 2020. . A common rate of 19.3% pa of Pensionable Pay. . Individual adjustments which, when added to or subtracted from the common rate, produce the following minimum Employer contribution rates.

Contributions in year commencing Contributions in year Contributions in year 1 April 2017 commencing 1 April 2018 commencing 1 April 2019 Additional Additional Additional Employer % Pensionable Contribution % Pensionable Contribution % Pensionable Contribution code Employer Pay £ Pay £ Pay £

62 Armagh Planetarium 18.0% 4,300 19.0% 4,300 20.0% 4,300

110 Coleraine Harbour Commissioners 26.2% 17,000 26.2% 17,000 26.2% 18,000

114 Northern Ireland Fire & Rescue Service 18.0% 120,100 19.0% 120,100 20.0% 120,100

115 Northern Ireland Housing Executive 18.0% 1,127,600 19.0% 1,127,600 20.0% 1,127,600

116 Northern Ireland Tourist Board 18.0% 59,800 19.0% 59,800 20.0% 59,800

118 Arts Council of Northern Ireland 18.0% 25,500 19.0% 25,500 20.0% 25,500 Northern Ireland Local Government Officers' 119 18.0% 27,000 19.0% 27,000 20.0% 27,000 Superannuation Committee (NILGOSC)

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Contributions in year commencing Contributions in year Contributions in year 1 April 2017 commencing 1 April 2018 commencing 1 April 2019 Additional Additional Additional Employer % Pensionable Contribution % Pensionable Contribution % Pensionable Contribution code Employer Pay £ Pay £ Pay £

123 Linen Hall Library 22.5% 2,000 22.5% 2,000 22.5% 2,000

128 Royal Belfast Academical Institution 18.0% 13,400 19.0% 13,400 20.0% 13,400

129 Jordanstown Schools 18.0% 1,100 19.0% 1,100 20.0% 1,100

131 Glenmona Resource Centre 0.0% 0 0.0% 0 0.0% 0

132 Bangor Grammar School 18.0% 11,800 19.0% 11,800 20.0% 11,800

134 Friends School 18.0% 10,600 19.0% 10,600 20.0% 10,600

136 Campbell College 18.0% 22,200 19.0% 22,200 20.0% 22,200

137 Belfast Royal Academy 18.0% 14,100 19.0% 14,100 20.0% 14,100

138 Belfast High School 18.0% 7,900 19.0% 7,900 20.0% 7,900

139 St Malachy's College 18.0% 12,600 19.0% 12,600 20.0% 12,600

142 St Columb's College 18.0% 15,000 19.0% 15,000 20.0% 15,000

145 St Mary's Christian Brothers Grammar School 18.0% 11,700 19.0% 11,700 20.0% 11,700

146 Sullivan Upper School 18.0% 13,700 19.0% 13,700 20.0% 13,700

147 Christian Brothers Grammar School 18.0% 9,800 19.0% 9,800 20.0% 9,800

148 Ballymena Academy 18.0% 8,400 19.0% 8,400 20.0% 8,400

149 Belfast Charitable Society 25.2% 137,000 25.2% 142,000 25.2% 147,000

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Contributions in year commencing Contributions in year Contributions in year 1 April 2017 commencing 1 April 2018 commencing 1 April 2019 Additional Additional Additional Employer % Pensionable Contribution % Pensionable Contribution % Pensionable Contribution code Employer Pay £ Pay £ Pay £

Northern Ireland Local Government 150 18.0% 5,300 19.0% 5,300 20.0% 5,300 Association (NILGA) 152 Wallace High School 18.0% 11,500 19.0% 11,500 20.0% 11,500

154 Larne Grammar School 18.0% 6,800 19.0% 6,800 20.0% 6,800

157 Royal School, Armagh 18.0% 12,200 19.0% 12,200 20.0% 12,200

160 St Patricks Grammar School 18.0% 5,000 19.0% 5,000 20.0% 5,000

161 Thornhill College 18.0% 10,500 19.0% 10,500 20.0% 10,500

162 Armagh Observatory 18.0% 10,700 19.0% 10,700 20.0% 10,700 Livestock & Meat Commission for Northern 163 18.0% 4,800 19.0% 4,800 20.0% 4,800 Ireland 164 University of Ulster 18.0% 255,400 19.0% 255,400 20.0% 255,400

167 Hunterhouse College 18.0% 6,800 19.0% 6,800 20.0% 6,800

Council for the Curriculum, Examinations and 170 18.0% 144,600 19.0% 144,600 20.0% 144,600 Assessment (CCEA)

172 Rathmore Grammar School 18.0% 10,600 19.0% 10,600 20.0% 10,600

173 Our Lady & St Patrick's College 18.0% 9,600 19.0% 9,600 20.0% 9,600

175 St Mary's University College 18.0% 33,900 19.0% 33,900 20.0% 33,900

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Contributions in year commencing Contributions in year Contributions in year 1 April 2017 commencing 1 April 2018 commencing 1 April 2019 Additional Additional Additional Employer % Pensionable Contribution % Pensionable Contribution % Pensionable Contribution code Employer Pay £ Pay £ Pay £

176 Stranmillis University College 18.0% 41,100 19.0% 41,100 20.0% 41,100

179 Citybus Limited 18.0% 332,500 19.0% 332,500 20.0% 332,500

180 Northern Ireland Fishery Harbour Authority 18.0% 8,000 19.0% 8,000 20.0% 8,000

187 Sports Council for Northern Ireland 18.0% 72,900 19.0% 72,900 20.0% 72,900

188 St Dominic's High School 18.0% 8,400 19.0% 8,400 20.0% 8,400

189 Ulsterbus Limited 18.0% 973,600 19.0% 973,600 20.0% 973,600

192 Dalriada School 18.0% 8,100 19.0% 8,100 20.0% 8,100

194 Fold Housing Association 30.2% 1,626,000 30.2% 1,683,000 30.2% 1,742,000

195 Victoria College 18.0% 15,500 19.0% 15,500 20.0% 15,500

196 St Patrick's Academy 18.0% 9,700 19.0% 9,700 20.0% 9,700

197 Northern Ireland Transport Holding Company 18.0% 20,800 19.0% 20,800 20.0% 20,800 Northern Ireland Federation of Housing 203 18.0% 4,400 19.0% 4,400 20.0% 4,400 Associations 206 Northern Ireland Railway Company Limited 18.0% 530,400 19.0% 530,400 20.0% 530,400

208 Dominican College, Belfast 18.0% 7,400 19.0% 7,400 20.0% 7,400

209 St Michael's College 18.0% 9,600 19.0% 9,600 20.0% 9,600

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Contributions in year commencing Contributions in year Contributions in year 1 April 2017 commencing 1 April 2018 commencing 1 April 2019 Additional Additional Additional Employer % Pensionable Contribution % Pensionable Contribution % Pensionable Contribution code Employer Pay £ Pay £ Pay £

211 Probation Board for Northern Ireland (PBNI) 18.0% 170,400 19.0% 170,400 20.0% 170,400

212 Strathearn School 18.0% 9,600 19.0% 9,600 20.0% 9,600

213 Loreto College 18.0% 5,900 19.0% 5,900 20.0% 5,900

215 Loreto Grammar School 18.0% 6,100 19.0% 6,100 20.0% 6,100

216 Foyle and Londonderry College 18.0% 12,600 19.0% 12,600 20.0% 12,600

218 Royal School, Dungannon 18.0% 9,200 19.0% 9,200 20.0% 9,200

219 Local Government Staff Commission 24.8% 24,000 24.8% 25,000 24.8% 26,000

220 St Mary's Grammar School 18.0% 14,000 19.0% 14,000 20.0% 14,000

221 Sacred Heart Grammar School 18.0% 7,600 19.0% 7,600 20.0% 7,600

222 Council for Catholic Maintained Schools 18.0% 30,100 19.0% 30,100 20.0% 30,100

223 Northern Ireland Legal Services Commission 0.0% 0 0.0% 0 0.0% 0

230 Hearth Housing Association Limited 0.0% 0 0.0% 0 0.0% 0

232 South Ulster Housing Association Limited 27.5% 81,000 27.5% 84,000 27.5% 87,000

234 Grove Housing Association Limited 18.0% 2,000 19.0% 2,000 20.0% 2,000

236 Newington Housing Association (1975) Limited 18.0% 5,800 19.0% 5,800 20.0% 5,800

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Contributions in year commencing Contributions in year Contributions in year 1 April 2017 commencing 1 April 2018 commencing 1 April 2019 Additional Additional Additional Employer % Pensionable Contribution % Pensionable Contribution % Pensionable Contribution code Employer Pay £ Pay £ Pay £

237 Woodvale and Shankill Co 18.0% 1,400 19.0% 1,400 20.0% 1,400

238 Habinteg Housing Association (Ulster) Limited 18.0% 23,800 19.0% 23,800 20.0% 23,800

239 Apex Housing 29.7% 622,000 29.7% 644,000 29.7% 667,000

240 Covenanter Residential Association Limited 40.2% 33,000 40.2% 34,000 40.2% 0

241 St Matthew's Housing Association Limited 18.0% 2,100 19.0% 2,100 20.0% 2,100

Northern Ireland Co-Ownership Housing 242 18.0% 25,600 19.0% 25,600 20.0% 25,600 Association Limited

250 Mount Lourdes Grammar School 18.0% 8,800 19.0% 8,800 20.0% 8,800

251 Community Relations Council 23.0% 22,000 23.0% 23,000 23.0% 24,000

252 Construction Industry Training Board (CITB) 18.0% 13,800 19.0% 13,800 20.0% 13,800 Engineering Training Council for Northern 254 0.0% 0 0.0% 0 0.0% 0 Ireland 260 Hazelwood College 18.0% 15,700 19.0% 15,700 20.0% 15,700

261 Hazelwood Integrated Primary School Limited 18.0% 7,000 19.0% 7,000 20.0% 7,000

262 Lagan College 18.0% 13,300 19.0% 13,300 20.0% 13,300

263 Mill Strand Integrated Primary School 18.0% 3,100 19.0% 3,100 20.0% 3,100

265 Northern Ireland Rural Development Council 24.6% 180,000 24.6% 187,000 24.6% 193,000

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Contributions in year commencing Contributions in year Contributions in year 1 April 2017 commencing 1 April 2018 commencing 1 April 2019 Additional Additional Additional Employer % Pensionable Contribution % Pensionable Contribution % Pensionable Contribution code Employer Pay £ Pay £ Pay £

266 Bridge Integrated Primary School 18.0% 3,300 19.0% 3,300 20.0% 3,300

267 Enniskillen Integrated Primary School 18.0% 1,400 19.0% 1,400 20.0% 1,400

268 Aquinas Diocesan Grammar School 18.0% 13,400 19.0% 13,400 20.0% 13,400

271 Rural Housing Association 18.0% 5,100 19.0% 5,100 20.0% 5,100

273 Oakgrove Integrated College 18.0% 13,000 19.0% 13,000 20.0% 13,000

274 Shimna Integrated College 18.0% 9,200 19.0% 9,200 20.0% 9,200 Northern Ireland Council for Integrated 275 18.0% 5,100 19.0% 5,100 20.0% 5,100 Education 276 Erne Integrated College 18.0% 1,400 19.0% 1,400 20.0% 1,400

277 Derry Visitor and Convention Bureau 18.0% 4,700 19.0% 4,700 20.0% 4,700

278 Integrated College Dungannon 18.0% 6,300 19.0% 6,300 20.0% 6,300

279 Braidside Integrated Primary & Nursery School 18.0% 3,400 19.0% 3,400 20.0% 3,400

280 Citizens Advice Bureau 32.1% 79,000 32.1% 82,000 32.1% 85,000

281 Rainey Endowed School 18.0% 2,700 19.0% 2,700 20.0% 2,700

284 Drumragh Integrated College 18.0% 8,600 19.0% 8,600 20.0% 8,600

285 St Louis Grammar School 18.0% 7,000 19.0% 7,000 20.0% 7,000

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Contributions in year commencing Contributions in year Contributions in year 1 April 2017 commencing 1 April 2018 commencing 1 April 2019 Additional Additional Additional Employer % Pensionable Contribution % Pensionable Contribution % Pensionable Contribution code Employer Pay £ Pay £ Pay £

287 Lumen Christi College 18.0% 7,800 19.0% 7,800 20.0% 7,800

288 Cedar Integrated Primary School 18.0% 2,800 19.0% 2,800 20.0% 2,800

289 Our Lady's Grammar School 18.0% 8,500 19.0% 8,500 20.0% 8,500

290 Mourne Heritage Trust 29.8% 17,000 29.8% 18,000 29.8% 18,000

309 St Joseph's Grammar School 18.0% 5,000 19.0% 5,000 20.0% 5,000

313 Northern Ireland Hospice 22.1% 76,000 22.1% 79,000 22.1% 81,000

314 Slemish Integrated College 18.0% 10,300 19.0% 10,300 20.0% 10,300

316 Malone College 18.0% 10,400 19.0% 10,400 20.0% 10,400 Ark Housing Association Northern Ireland 317 18.0% 6,200 19.0% 6,200 20.0% 6,200 Limited 318 Oakgrove Integrated Primary School 18.0% 2,300 19.0% 2,300 20.0% 2,300

319 Connswater Homes Limited 18.0% 12,900 19.0% 12,900 20.0% 12,900

320 New-Bridge Integrated College 18.0% 6,900 19.0% 6,900 20.0% 6,900

321 Millennium Forum 18.0% 7,900 19.0% 7,900 20.0% 7,900

322 Methodist College 18.0% 19,600 19.0% 19,600 20.0% 19,600

323 Belfast Visitor & Convention Bureau 19.8% 0 20.2% 6,000 20.2% 17,000

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Contributions in year commencing Contributions in year Contributions in year 1 April 2017 commencing 1 April 2018 commencing 1 April 2019 Additional Additional Additional Employer % Pensionable Contribution % Pensionable Contribution % Pensionable Contribution code Employer Pay £ Pay £ Pay £

324 North Coast Integrated College 18.0% 5,500 19.0% 5,500 20.0% 5,500

325 Outdoor Recreation (NI) 18.0% 7,000 18.0% 12,000 18.0% 16,000

326 Spires Integrated Primary School 18.0% 1,300 19.0% 1,300 20.0% 1,300

327 Ulidia Integrated College 18.0% 9,400 19.0% 9,400 20.0% 9,400

328 Comhairle na Gaelscolaiochta 18.0% 6,800 19.0% 6,800 20.0% 6,800

329 Strangford College 18.0% 7,100 19.0% 7,100 20.0% 7,100

330 Loughview Integrated Primary School 18.0% 3,500 19.0% 3,500 20.0% 3,500

331 Windmill Integrated Primary School 18.0% 2,900 19.0% 2,900 20.0% 2,900

332 Acorn Integrated Primary School 18.0% 2,700 19.0% 2,700 20.0% 2,700

333 Millennium Integrated Primary School 18.0% 2,500 19.0% 2,500 20.0% 2,500

334 Oakwood Integrated Primary School 18.0% 3,800 19.0% 3,800 20.0% 3,800

335 Dominican College, Portstewart 18.0% 4,900 19.0% 4,900 20.0% 4,900

336 Saints and Scholars Integrated Primary School 18.0% 2,200 19.0% 2,200 20.0% 2,200

337 General Teaching Council for Northern Ireland 18.0% 9,300 19.0% 9,300 20.0% 9,300

338 Assumption Grammar School 18.0% 5,800 19.0% 5,800 20.0% 5,800

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Contributions in year commencing Contributions in year Contributions in year 1 April 2017 commencing 1 April 2018 commencing 1 April 2019 Additional Additional Additional Employer % Pensionable Contribution % Pensionable Contribution % Pensionable Contribution code Employer Pay £ Pay £ Pay £

339 Sperrin Integrated College 18.0% 6,100 19.0% 6,100 20.0% 6,100

340 Youth Justice Agency For NI 0.0% 0 0.0% 0 0.0% 0

342 Abbey Christian Brothers Grammar School 18.0% 7,600 19.0% 7,600 20.0% 7,600

343 Omagh Integrated Primary School 18.0% 900 19.0% 900 20.0% 900

344 Arc21 18.0% 7,500 19.0% 7,500 20.0% 7,500

345 Maine Integrated Primary School 18.0% 2,100 19.0% 2,100 20.0% 2,100

349 Drumlins Integrated Primary School 18.0% 3,200 19.0% 3,200 20.0% 3,200

350 Portadown Integrated Primary School 18.0% 3,600 19.0% 3,600 20.0% 3,600

351 Roe Valley Integrated Primary School 18.0% 1,800 19.0% 1,800 20.0% 1,800

352 South Eastern Regional College 18.0% 109,300 19.0% 109,300 20.0% 109,300

353 Belfast Metropolitan College 18.0% 131,400 19.0% 131,400 20.0% 131,400

354 South West College 18.0% 65,900 19.0% 65,900 20.0% 65,900

355 Northern Regional College 18.0% 65,900 19.0% 65,900 20.0% 65,900

356 North West Regional College 18.0% 65,500 19.0% 65,500 20.0% 65,500

357 Southern Regional College 18.0% 101,700 19.0% 101,700 20.0% 101,700

358 Middletown Centre for Autism Limited 18.0% 16,000 19.0% 16,000 20.0% 16,000

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Contributions in year commencing Contributions in year Contributions in year 1 April 2017 commencing 1 April 2018 commencing 1 April 2019 Additional Additional Additional Employer % Pensionable Contribution % Pensionable Contribution % Pensionable Contribution code Employer Pay £ Pay £ Pay £

HSG Zander Ireland Facilities Services Limited 359 16.7% 0 16.7% 0 16.7% 0 (Bilfinger) 361 Libraries NI 18.0% 204,000 19.0% 204,000 20.0% 204,000

362 Corran Integrated Primary School 18.0% 2,100 19.0% 2,100 20.0% 2,100

363 St Colman's College 18.0% 8,200 19.0% 8,200 20.0% 8,200

364 Graham Asset Management 34.0% 12,000 34.0% 12,000 34.0% 13,000

365 Alpha Housing Association 29.8% 19,000 29.8% 20,000 29.8% 21,000

366 City of Derry Airport 18.0% 20,000 19.0% 20,000 20.0% 20,000

367 Blackwater Integrated College 18.0% 4,300 19.0% 4,300 20.0% 4,300

368 Rowandale Integrated Primary School 18.0% 2,800 19.0% 2,800 20.0% 2,800

369 Cranmore Integrated Primary School 18.0% 1,800 19.0% 1,800 20.0% 1,800

370 Amey Community Limited 32.6% 11,000 32.6% 12,000 32.6% 12,000

371 Capita Managed IT Solutions Limited 28.8% 15,000 28.8% 15,000 28.8% 16,000

372 Northern Community Leisure Trust 19.1% 0 19.1% 0 19.1% 0

373 Northern Ireland Screen 18.0% 14,500 19.0% 14,500 20.0% 14,500

374 North Belfast Housing Association Limited 18.0% 6,300 19.0% 6,300 20.0% 6,300

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Contributions in year commencing Contributions in year Contributions in year 1 April 2017 commencing 1 April 2018 commencing 1 April 2019 Additional Additional Additional Employer % Pensionable Contribution % Pensionable Contribution % Pensionable Contribution code Employer Pay £ Pay £ Pay £

375 Antrim and Newtownabbey Borough Council 18.0% 295,200 19.0% 295,200 20.0% 295,200 Armagh, Banbridge and Craigavon District 376 18.0% 498,300 19.0% 498,300 20.0% 498,300 Council 377 Belfast City Council 18.0% 1,092,300 19.0% 1,092,300 20.0% 1,092,300

378 Causeway Coast and Glens District Council 18.0% 277,100 19.0% 277,100 20.0% 277,100

379 Derry City and Strabane District Council 18.0% 348,800 19.0% 348,800 20.0% 348,800

380 Fermanagh and Omagh District Council 18.0% 265,100 19.0% 265,100 20.0% 265,100

381 Lisburn and Castlereagh City Council 18.0% 350,600 19.0% 350,600 20.0% 350,600

382 Mid and East Antrim District Council 18.0% 276,100 19.0% 276,100 20.0% 276,100

383 Mid Ulster District Council 18.0% 269,700 19.0% 269,700 20.0% 269,700

384 Newry, Mourne and Down District Council 18.0% 355,300 19.0% 355,300 20.0% 355,300

385 Ards and North Down Borough Council 18.0% 287,800 19.0% 287,800 20.0% 287,800

386 Choice Housing Ireland Limited 29.0% 722,000 29.0% 747,000 29.0% 773,000

387 Phoenix Integrated Primary School 18.0% 0 19.0% 0 20.0% 0

388 Greenwich Leisure Limited 18.0% 98,400 19.0% 98,400 20.0% 98,400

389 Education Authority 18.0% 4,806,900 19.0% 4,806,900 20.0% 4,806,900

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Contributions in year commencing Contributions in year Contributions in year 1 April 2017 commencing 1 April 2018 commencing 1 April 2019 Additional Additional Additional Employer % Pensionable Contribution % Pensionable Contribution % Pensionable Contribution code Employer Pay £ Pay £ Pay £

390 Coleraine Grammar School 18.0% 9,000 19.0% 9,000 20.0% 9,000

391 Northern Community Leisure Trust 2 21.3% 0 21.3% 0 21.3% 0

392 St Ronan's College 18.0% 14,300 19.0% 14,300 20.0% 14,300

393 St Patrick's Grammar School, Armagh 18.0% 800 19.0% 800 20.0% 800

394 Controlled Schools Support Council 18.0% 0 19.0% 0 20.0% 0

395 Belfast Waterfront and Ulster Hall 18.0% 0 19.0% 0 20.0% 0

TOTAL 18.3% 18,527,700 19.2% 18,669,700 20.2% 18,783,700

The contributions shown above represent the minimum contributions to be paid by each Employer. Employers may choose to pay additional contributions from time to time subject to the Committee's agreement. Additional contributions may be required in respect of any additional liabilities that arise under the provisions of Regulations 31, 32, 36 and 37 of the 2014 Regulations and Employers will be notified of such contributions separately by the Committee. Additional contributions may be payable by any Employers which have ceased to participate in the Fund since 31 March 2016 and others with no active members where a bulk transfer is pending. These will be certified separately. Contribution rates for Employers commencing participation in the Fund after 31 March 2016 not included above will be advised separately. This certificate should be read in conjunction with the notes overleaf.

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Signed on behalf of Aon Hewitt Limited

Alison Murray FFA Laura Hamilton FIA Fellow of the Institute and Faculty of Actuaries Fellow of the Institute and Faculty of Actuaries

29 March 2017

Aon Hewitt Limited 25 Marsh Street Bristol BS1 4AQ

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Notes to Actuary's certificate

The contribution rates certified have been assessed using the actuarial Severance and redundancy under Regulation 31(7) of the 2014 methods and assumptions detailed in our actuarial valuation report dated 29 Regulations March 2017. In particular the following assumptions have been made regarding retirement liabilities from active membership status: No allowance is made in the valuation for retirements in these Normal, late and voluntary early retirement under Regulations circumstances. 31(1), 31(3) and 31(5) of the 2014 Regulations Such retirements increase costs due to the early payment of benefits. The Committee requires separate funding of liabilities arising from such The assumptions regarding the assumed age at retirement are as retirements and, as such, the financial impact of these retirements is broadly summarised in Appendix 6 of our valuation report. neutral. Where some or all benefits are drawn before the assumed retirement age, but no reduction for early payment applies or members elect to draw their Flexible retirement under Regulation 31(6) of the 2014 benefits after the assumed retirement age there may be a funding strain or Regulations loss respectively. This will come through as an item of experience at the next actuarial valuation. No allowance is made in the valuation for retirements in these circumstances. Additional funding would not normally be required if actual retirements exceed the number anticipated, unless retirements occur before Normal Such retirements are generally ‘cost neutral’ (although there may be a small Pension Age and the employer waives the reduction for early payment as gain or loss to the extent that the actuarial reduction factors are based on permitted by Regulation 31(8). The Committee requires separate funding of different assumptions to those adopted for funding purposes. Additional any additional liabilities arising from such retirements and, as such, the funding would not normally be required if actual retirements exceed the financial impact of these retirements is broadly neutral. number anticipated, unless retirements occur before Normal Pension Age Ill-health under Regulation 36 of the 2014 Regulations and the employer waives the reduction for early payment as permitted by Regulation 31(8).. The Committee requires separate funding of any The assumptions regarding ill health retirement at each age are as additional liabilities arising from such retirements and, as such, the financial summarised in Appendix 6 of our valuation report. impact of these retirements is broadly neutral. Such retirements increase costs due to the early payment of enhanced In this certificate, references to the 2014 Regulations mean the Local benefits. If actual retirements exceed the number anticipated, and no action is taken before the next valuation, this would be identified as a source of Government Pension Scheme Regulations (Northern Ireland) 2014 (as loss at the next valuation. amended).

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Appendix 9: Glossary Active member A person who is employed by an employer participating in the Fund, and is paying (or is treated as paying) contributions to the Fund (includes certain members temporarily absent, e.g. due to family leave or sickness). Admission Body An employer admitted to the Fund under an admission agreement or with a "deemed" admission agreement. Attained age method This is one of the methods used by actuaries to calculate a contribution rate to the Fund. This method calculates the present value of the benefits expected to accrue to members over their expected remaining membership of the Fund expressed as a percentage of their expected future pensionable pay. It allows for projected future increases to pay or revaluation as appropriate through to retirement or date of leaving service. The method is based on the current membership and takes no account of the possibility of further members joining the Fund. If there are no new members, this method would be expected to result in a stable contribution rate, once surpluses or shortfalls are taken into account, and if all the other assumptions are borne out. However, if more members join the Fund to replace older leavers, the contribution rate can be expected to fall.

Consumer Prices Index (CPI) This is the price inflation index that increases to pensions and deferred pensions paid by the Fund and the revaluation of pension accounts are currently based on. It is published every month by the Office of National Statistics.

Deferred member A former employee who has left active membership, but has not yet received any benefits from the Fund and is prospectively entitled to receive a deferred pension from his/her normal pension age.

Discount rate This is used to place a present value on a future payment.

Fund Actuary The actuary to the Fund, who provides actuarial advice to the Committee including carrying out the actuarial valuation contained in this report. Funding objective To hold sufficient and appropriate assets to cover the Funding Target.

Funding ratio This is the ratio of the value of assets to the Funding Target.

Funding Strategy Statement A document prepared by the Committee in accordance with the Regulations which sets out the funding strategy adopted for the Fund. The Actuary must have regard to this statement in preparing this actuarial valuation.

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Funding target An assessment of the present value of the benefits that will be paid from the Fund in the future, normally based on pensionable service or membership prior to the valuation date. Under the current Funding Strategy Statement the funding target is equal to the past service liabilities calculated using a prudent set of assumptions.

Future service contribution rate The contribution rate (expressed as a percentage of Pensionable Pay) required to meet the cost of benefits which will accrue to members in future.

Guaranteed Minimum Pensions (GMPs) Most Funds that were contracted out of the State Earnings Related Pension Scheme (SERPS) before April 1997 have to provide a pension for service before that date at least equal to the Guaranteed Minimum Pension (GMP). This is approximately equal to the SERPS pension that the member would have earned had the Fund not been contracted out. GMPs ceased to accrue on 6 April 1997 when the legislation changed.

Intermediate funding target For employers not deemed by the Committee to meet the criteria for membership of the Main Employer Group, but which the Committee considers to be sufficiently financially secure, the Committee may assume continued investment in a broad range of assets of higher risk than government bonds for a longer period than it would for orphan bodies. The funding target will still consider any likely change in notional or actual investment strategy as regards the assets held in respect of the body's liabilities when the employer exits. This is known as the intermediate funding target and is intended to be an interim step towards moving to the Ongoing Orphan funding target.

Typically for such employers the left service discount rate will be equivalent to the yield on long-dated fixed interest gilts at a duration appropriate for the Fund's liabilities plus an asset out-performance assumption. Currently this is set so that the discount rate is halfway between that of the left service discount rate used for ongoing orphan employers and that used for employers on the Main Employer Group funding target.

Long-term cost efficiency This is not defined in the Regulations but further explanation can be found in the Cipfa guidance 'Preparing and Maintaining a Funding Strategy Statement', dated September 2016:

The notes to the Public Service Pensions Act 2013 state:

Long-term cost-efficiency implies that the rate must not be set at a level that gives rise to additional costs. For example, deferring costs to the future would be likely to result in those costs being greater overall than if they were provided for at the time.

The rate of employer contributions shall be deemed to have been set at an appropriate level to ensure long-term cost efficiency if the rate of employer contributions is sufficient to make provision for the cost of current benefit accrual, with an appropriate adjustment to that rate for any surplus or deficit in the fund.

In assessing whether the above condition is met, GAD may have regard to the following considerations:

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. the implied average deficit recovery period . the investment return required to achieve full funding over different periods, e.g. the recovery period . if there is no deficit, the extent to which contributions payable are likely to lead to a deficit arising in the future . the extent to which the required investment return above is less than the Committee’s view of the expected future return being targeted by a fund’s investment strategy, taking into account changes in maturity/strategy as appropriate Main Employer Group Funding Target For secure employers whose participation in the Fund is considered by the Committee to be indefinite and any associated Admission Bodies with a subsumption commitment from such Scheduled Bodies, the Committee assumes indefinite investment in a broad range of assets of higher risk than risk free assets. This is known as the Main Employer Group funding target.

Orphan body

This is an employer whose participation in the Fund may cease at some future point in time, after which it is expected that the Committee will have no access to future contributions from that employer for the employer's liabilities in the Fund once any liability on exit has been paid. On exit the employer’s liabilities will become ‘orphan liabilities’ in the Fund.

Ongoing Orphan funding target For active employers whose liabilities are expected to be orphaned on exit and are not included in the Main Employer Group, the Committee will have regard to the potential for participation to cease (or for the body to have no contributing members), the potential timing of such exit, and any likely change in notional or actual investment strategy as regards the assets held in respect of the body's liabilities at the date of exit (i.e. whether the liabilities will become 'orphaned' or a guarantor exists to subsume the notional assets and liabilities) in setting the funding target. Typically employers which will ultimately give rise to orphan liabilities will have an in-service discount rate equal to that used for the Main Employer Group funding target. The left service discount rate is based on the yield on long-dated fixed interest gilts at a duration appropriate for the Fund's non-active liabilities plus an asset out- performance assumption which is intended to reflect the Actuary's view of the possible future increase in gilt yields over a five year period, and is greater than market expectations of future increases at the valuation date. This is known as the ongoing orphan funding target. Past service liabilities This is the present value of the benefits to which members are entitled based on benefits accrued to the valuation date, assessed using the assumptions agreed between a Fund's Committee and the Actuary. It generally allows for projected future increases to pay or revaluation as appropriate through to retirement or date of leaving service. Present value Actuarial valuations involve projections of pay, pensions and other benefits into the future. To express the value of the projected benefits in terms of a cash amount at the valuation date, the projected amounts are discounted back to the valuation date by a discount rate. This value is known as the present value. For example, if the discount rate was 4% a year and if we had to pay a cash sum of £1,040 in one year’s time the present value would be £1,000. Projected unit method One of the common methods used by actuaries to calculate a contribution rate to a Fund.

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This method calculates the present value of the benefits expected to accrue to members over a control period (often one year) following the valuation date. The present value is usually expressed as a percentage of the members’ pensionable pay. It allows for projected future increases to pay or revaluation as appropriate through to retirement or date of leaving service. Provided that the distribution of members remains stable with new members joining to take the place of older leavers, the contribution rate calculated can be expected to remain stable, if all the other assumptions are borne out. If there are no new members however, the average age will increase and the contribution rate can be expected to rise.

Prudent Prudent assumptions are such that the actual outcome is considered to be more likely to overstate than understate the amount of money actually required to meet the cost of the benefits.

Rates and Adjustments Certificate A certificate required at each actuarial valuation by the Regulations, setting out the contributions payable by employers for the 3 years from the 1 April following the valuation date.

Recovery period The period over which any surplus or shortfall is to be eliminated.

Recovery plan Where a valuation shows a funding shortfall against the past service liabilities, a recovery plan sets out how the Committee intends to meet the funding objective.

Regulations The statutory regulations setting out the contributions payable to, and the benefits payable from, the Local Government Pension Scheme (Northern Ireland) and how the Fund is to be administered. They currently include the following sets of regulations: . Regulations Local Government Pension Scheme Regulations (Northern Ireland) 2014 (as amended) . 2014 Transitional Regulations Local Government Pension Scheme (Amendment and Transitional Provisions) Regulations (Northern Ireland) 2014 (as amended)

Shortfall Where the assets are less than the Funding Target, the shortfall is the Funding Target less the value of assets.

Shortfall contributions Additional contributions payable by employers to remove the shortfall by the end of the recovery period.

Solvency The notes to the Public Service Pensions Act 2013 state that solvency means that the rate of employer contributions should be set at “such level as to ensure that the scheme’s liabilities can be met as they arise”. It is not regarded that this means that the pension fund should be 100% funded at all times. Rather, and for the purposes of Section 13 of the Public Service Pensions Act 2013, the rate

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of employer contributions shall be deemed to have been set at an appropriate level to ensure solvency if:

. the rate of employer contributions is set to target a funding level for the whole fund (assets divided by liabilities) of 100% over an appropriate time period and using appropriate actuarial assumptions; and either . employers collectively have the financial capacity to increase employer contributions, and/or the fund is able to realise contingent assets should future circumstances require, in order to continue to target a funding level of 100%; or . there is an appropriate plan in place should there be, or if there is expected in future to be, no or a limited number of fund employers, or a material reduction in the capacity of fund employers to increase contributions as might be needed. If the conditions above are met, then it is expected that the fund will be able to pay scheme benefits as they fall due.

State Pension Age (SPA) Age at which State pensions are payable. Current legislation specifies the following ages: . Currently age 65 for men; transitioning to age 65 for women by 2018. . Current legislation transitions State Pension Age for both men and women to age 68 by 2046, as follows: – to age 66 by 2020 – to age 67 by 2028 – to age 68 by 2046 Strains These represent the cost of additional benefits granted to members under a discretion of the employer or the Committee. They include the cost of providing enhanced benefits on retirement or redundancy.

Subsumption body An employing body which is not a secure long term employer eligible for membership of the Main Employer Group but where the Committee has obtained an undertaking from such a long term secure employer that, if and when the employing body exits the Fund, they will be a source of future funding should any funding shortfall emerge on the original employing body's liabilities after exit. The funding target for subsumption bodies is the same as that adopted for the Main Employer Group.

Surplus Where the assets are more than the Funding Target, the surplus is the value of assets less the Funding Target.

Transfer value Members generally have a legal right to transfer their benefits to another pension arrangement before they retire. In taking a transfer, members give up their benefits in a fund, and a sum of money (called the transfer value) is paid into another approved pension fund. This is used to provide pension benefits on the terms offered in that fund.

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