The Government Actuary’s Department (GAD) has supported the Utility Regulator for Northern Ireland in the review of pension costs for Northern Ireland Water (NIW).
The review will help the Utility Regulator determine the pension costs allowed for during NIW’s next price control period. This will cover the period from 1 April 2021 to 31 March 2027.
The Utility Regulator for Northern Ireland is an independent non-ministerial government department. It is responsible for regulating Northern Ireland’s electricity, gas, water and sewerage industries. Its aim is to promote the short- and long-term interests of consumers.
NIW operates both defined contribution and defined benefit (DB) pension schemes. The DB scheme was set up in August 2010 for staff transferred from the Civil Service, although membership is also open to new staff joining NIW.
GAD Actuary, Hayley Spencer led on the project and said: “We produced a report on the key factors which determine NIW’s pensions costs. Our report focussed on the benefit structures, the assumptions in the funding valuation, and the pensions costs requested by NIW in its Business Plan.
“We also compared the funding approach with industry practice in the UK private sector, as well as pension schemes of other regulated companies. These included the Northern Ireland Electricity Networks and Ofgem.”
The findings within GAD’s report enabled the Utility Regulator to decide whether it needed to adjust the pensions costs requested by NIW.
The Utility Regulator published a consultation on a draft determination on 30 September 2020. The GAD report was published in full as an Annex to the draft determination. NIW and other stakeholders can respond to the Draft Determination, which closes on 16 December 2020.
GAD continues to support the Utility Regulator on the pensions aspects of responses received and the Final Determination, which is due to be published on 11 March 2021.