Agenda item

The Finance & Systems Manager (Pensions) presented the financial report. He said that the full-year budget forecast, excluding investment manager fees, was £61,000 below budget. This was partly due to the salary savings from the temporary partial secondment of the payroll manager to the Council’s payroll section while they undertake a major project. Further forecast savings were due to the secondment of the Projects Officer to Bristol City Council to assist their payroll team on pensions issues. There had also been savings on communications arising from changes in the methods of delivery. Investment managers’ fees were forecast to be £410,000 under budget, mainly because the budget included the full year fees for the infrastructure mandate, the appointment for which was not made till late in the year. Cash flow was £60.5 million in excess of the forecast made in the 2013/14 service plan because of the lump sum deficit recovery payments covering up to three years received in April. The full year forecast is £40.9m over budget as the advance payments unwind during the year. The only late payer (Appendix 7) was Filton Town Council. This late payment followed a change of staff at the Town Council. They had been reminded of their obligation to pay by the legal deadline.

The Pensions Benefits Manager presented the performance report. He said that there had been an 86% increase in case workload compared with the previous period. Cases processed within agreed timescales had fallen marginally in the latest quarter as a result, but remained within target. The one area where performance had dropped was in the provision of transfer-out information.  This was because of a change in internal procedure for issuing quotes, following the receipt of advice from HMRC about an increase in pension scams. Performance by employers was generally good, except for receipt of early leavers from Bristol City Council. Meetings had taken place with BCC, which identified issues of concern.  A member of APF staff had been seconded to BCC to help with support and resolve problems.

The Chair noted that the four Unitary Authorities performance was not compared against the other employers in the Fund.  The Pensions Manager confirmed that other medium-size employers could be reported as a collective whole for comparison.

The Pensions Benefits Manager reported that 81% of active membership in the Fund were now covered by electronic delivery of data from employers. The last outstanding unitary, South Gloucestershire, would be going live within the next few months. He commented on the CIPFA benchmarking data (paragraph 11.8 of the report). The Avon Pension Fund spent more on IT than the comparator group, but other funds would be increasing their IT spending in future. The costs of communication per member were reducing because of electronic delivery, but remained higher than the comparator group. He referred to the information about administration cost per member over the last five years given on agenda page 127, which showed that in general the Fund compared favourably with other LA pension funds.

A Member asked about the theoretical upper limit of electronic delivery. The Pensions Benefits Manager replied that 100% would be difficult to achieve, since smaller employers, such as Parish and Town Councils, might have only one or two members in the Fund, and delivery of information would probably only be necessary when an employee left. He hoped that 85-90% could be achieved.

The Vice-Chair noted that the cost of communications per member was not higher than that of other funds, but that the cost per employer was significantly higher. He wondered whether this was because of the number of employers in the Fund, or whether there were other drivers of cost that should be reviewed. Officers thought that this might be due to the provision of pension clinics. The Pensions Benefits Manager said that had been an increase in employer contact in the last three years. However, he thought a better breakdown of employer costs was required. The Chair felt that a higher level of communication costs would be justified, if it resulted in lower costs in other areas. The Pensions Benefits Manager thought that the higher level of contact was improving employer performance.

Members noted that overheads outside of the control of Pensions administration, i.e. those due to Bath and North East Somerset Council, appeared to be relatively high.

RESOLVED to note:

1. Administration and management expenditure for 7 months to 31 October 2014.

2. Performance indicators and customer satisfaction feedback for 3 months to 30 September 2014.

3. Summary performance report for period 1 April 2011 to 30 September 2014.

4. The Risk Register.