Following our informal consultation in the Summer the proposed Core FSS and satellite policies have now been issued for consultation with employers and are available below. The policy documents below broadly reflect the proposals set out in the Summer and, if we have not already done so, we will respond individually to any employers who raised specific questions as part of the informal consultation. Employers who responded previously were broadly supportive of the proposal to move to “pass through” arrangements for any new admission agreements, mainly because of the greater certainty it provides potential bidders in relation to pension costs as part of any procurement process. Employers who may be concerned about the balance of funding risk between the letting employer and the contractor do still have the option to retain the existing arrangements

One proposed change not identified in the Summer consultation but which has been prompted by subsequent market events is a proposal to amend the Cessation Policy (for employers whose membership of the fund is ending) to move away from assessing closing positions on a “gilts” basis to a “risk-based” approach based on the Fund’s actual investment strategy and a defined level of prudence. The old “gilts” based approach meant that closing positions were very sensitive to gilt market sentiments on the specific termination date which could make a large difference to the result for both the Fund and the employer.

If you wish to respond to the draft FSS and/or any of the satellite policies, please send your response to consult@sypa.org.uk Any responses received to this formal consultation or the earlier informal consultation will be considered by the Pensions Authority at their meeting in February 2023.

The closing date for responses to the consultation is 23 January 2023.

Subject to sufficient levels of interest, we are proposing to offer a briefing/Q&A session (via MS Teams) for any employers who have questions about the proposed new FSS and/or satellite policies. This has been provisionally scheduled for Thursday 12 January (11 am to 12 pm). If you would like to book a place at the briefing please email engagement@sypa.org.uk

The Core Funding Strategy Statement (including Appendices A to D)
This document sets out the proposed Funding Strategy Statement (FSS) for South Yorkshire Pension Fund. Publication of the FSS is a regulatory requirement and the document explains the objectives of the strategy and how the fund’s approach to meeting these objectives.

Appendix E SYPA Admissions policy
The purpose of this policy is to set out the administering authority’s default approach to admitting new employers into the fund.

Appendix F SYPA Cessation Policy
The purpose of this policy is to set out the administering authority’s approach to dealing with circumstances where a scheme employer leaves the fund and becomes an exiting employer (a cessation event).

Appendix G SYPA Bulk transfers policy
The purpose of this policy is to set out the administering authority’s approach to dealing with the bulk transfer of scheme member pension rights into and out of the fund in prescribed circumstances.

Appendix H SYPA Contribution reviews policy
The purpose of this policy is to set out the administering authority’s approach to reviewing contribution rates between triennial valuations.

Appendix I Academies policy
The purpose of this policy is to set out the administering authority’s funding principles relating to academies and Multi-Academy Trusts (MATs).

Appendix J SYPA Covenant Assessment policy
The purpose of this policy is to set out the administering authority’s approach to assessing and monitoring the strength of an employer’s covenant in terms of its ability to meet its financial obligations to the fund.

Appendix K SYPA Prepayments policy
The purpose of this policy is to set out the administering authority’s approach to the prepayment of regular contributions due by participating employers.

Appendix L SYPA ill health risk management policy
The purpose of this policy is to set out the administering authority’s approach to managing the risk arising due to ill health retirements

Appendix M SYPA Pass through policy
This policy sets out the default approach for granting contractors Admitted Body status and should be read in conjunction with the Admissions Policy.