Issue - meetings

The Committee  to consider options for the deficit recovery period for new Academies joining the Pension Fund as separate employers.Report to follow

The report explained to members how the new school academies were allowed to join the fund as separate employers and as the Council currently has a pension fund deficit, the element of the deficit relating to the school staff would transfer to the academy.  The report put forward options with legal advice for the committee to consider on the conditions, length and calculation of the deficit recovery period for new Academies joining the Pension Fund as separate employers.

 In relation to section 9.1 of the report which indicated a deficit of £665,000 would transfer to Alexandra Park Academy, it was understood that this was limited to non teaching staff.

Understanding was sought on what the outcome would be for the pension fund should an Academy be served notice, ceasing to become financially viable and unable to repay their creditors. In this event, would it be prudent to have an agreement in place with academies for a pension liability?  . The committee learned that, in the eventuality that an Academy folded, the pupils with staff would be transferred to other schools in the borough which were part of the pension scheme. Therefore the assumption was that the deficit would transfer with the employee.  To further plan for this unique eventuality, clarification was sought on whether it would be advisable to consider and consult on a deficit recovery period which was related to the academy funding guarantee period of 7 years. The committee were advice that this would have an impact on the previous agreement made with Grieg City academy in which a 20 year deficit recovery period had already been agreed. The committee also noted that out of 15 other boroughs, 12 boroughs were inclined to consult on a 20 year deficit recovery period.

 RESOLVED

1. It be noted that the deficit recovery period for new academies of 20 years is set out in the Funding strategy.

2. That the calculation of deficits transferring to academies is done by applying the Council’s funding level at the point of transfer.

3. That a consultation be undertaken with a view to amending the Funding strategy statement to reflect the possibility of an academy being served notice and to enable assessments of employer covenant to be reflected in deficit recovery periods.