Public sector workers' pension fund "in good shape"

Monday 13 June 2022

Deputies will be asked to reduce States' contributions to the Superannuation Fund which pays their employees' pensions.

The Policy & Resources Committee says the Fund is in such a good position as a result of changes made in 2015 that taxpayers' contributions should be reduced from 14.1% of employees' salaries to 10.3% from 1 August this year.

This would reduce the States' contributions to the Fund by around £9million a year.

The proposal from the States' senior committee was submitted this morning alongside publication of the latest actuarial valuation of the Fund, which covers most public sector employees, including nurses, teachers, police officers and civil servants.

Pictured: The States' Superannuation Fund pays pensions to thousands of former public sector employees, including civil servants and teachers. 

"The changes to the public sector pension schemes agreed by the States in 2015 saw the previous final salary pension scheme replaced with defined benefits on a career average re-valued earnings basis, which made the schemes more sustainable and reduced the risk to the employer," said the Committee.

"The actuarial valuation also shows the Fund that provides public sector pensions is in good shape and the deficit that existed at the time of the previous valuation has been eliminated.

"The Fund currently has a small surplus as a result of high investment returns and lower salary and pension increases in recent years.

"This is welcome as this surplus can help to mitigate against any more difficult periods in the future and reduce the risk of having to increase contribution rates."

Pictured: If the proposals are approved by the States, their contributions to the Fund will reduce by around £9million a year.

The Committee's proposal would see States' contributions for Guernsey Electricity employees reduced to 7.5%.

The States' Assembly will also be asked to agree that no annual sum should be paid into the Fund for pensions for States' members in 2022 and subsequent years.