Agenda item

The Pensions Benefit Manager presented the report.

He said this was the first combined administration performance and Data Improvement Plan report (the latter being introduced as a requirement following the introduction of The Pension Regulator Code of Practice 14).

Performance

There were no significant issues to report. The Balanced Scorecard showed that the key performance indicators were all within or near target. However, there was a slight underperformance on the processing of early leaver cases, mainly due to the increased workload in this area following the year-ending data cleansing exercise. There had been a further increase overall in work cases during the reporting period, attributable mainly to data reconciliation and a build-up of aggregation cases.

The Avon Pension Fund also administers the Firefighters Pension Schemes on behalf of Avon Fire and Rescue Service. Recent developments relating to the Fire scheme had significantly impacted on workload:

• the scheme had become a CARE-based scheme in April 2015; much staff time was dedicated to implementing the new scheme and providing training events.

• Retained firefighters had been granted access to the scheme on an historic basis.  The Fund provided training to Fire Authority HR and Finance staff and detailed calculations on admission of qualified members.

• The Ombudsman had made a decision in the case of Milne v. GAD in favour of Milne. As a result additional payments would have to be made to certain Firefighter scheme leavers whose pensions had commenced between in the period between December 2001 and August 2006. Payments in these cases would total about £2.2m and would be made within the next two months.  All payments will be funded by Fire Authority.

• DCLG had also advised that firefighters who had joined the old Firefighters Pension Scheme before the age of 20 and had 30 years of service would be allowed to take a contributions holiday from the age of 48 up to the age of 50.  Further details on this are awaited from DCLG.

There was a requirement to issue an Annual Benefit Statement to all members by 31^st August. Only 105 statements were not issued by this deadline, and this was because nine employers failed to provide any year-end information at all. Penalties charges would be imposed on employers who failed to meet the advertised criteria for correct and timely supply of data at year end. It was vital now the LGPS scheme was no longer a final salary scheme that current data was held for each member. He drew attention to the table of TPR Improvement Plan Data in Appendix 8 on agenda page 277; there was an increase in the number of leavers being identified. Additional efforts would be made to engage with and train employers. Officers would visit employers, because in general those employers attracting penalty charges  were not interested in attending training workshops or conferences. Continuing refinement of the performance reports would allow problem employers to be targeted.

A Member asked whether it was possible to estimate the additional costs being imposed by new Government requirements. The Head of Business, Finance and Pensions replied that it was difficult to estimate the costs, but officers were spending much more time on compliance and employer engagement. There were 220 employers in the scheme, which would rise to over 400 as schools became Academies. Not all employers could be expected to understand their duties in relation to pensions. There was no doubt that the Fund’s costs would increase. How much they would increase would depend on how effective the Fund’s IT systems and the policing of the governance arrangements within employers were.

A Member asked about the accuracy of data in relation to the CARE scheme, for example about hours worked. The Pensions Benefit Manager replied that work would have to begin in the near future to identify gaps in data held. There would need to be reconciliation between contributions received and the CARE data collected from employers. Employers did not really understand their obligations, despite the large amount of information circulated and training offered. There were issues relating to unpaid sickness entitlement, APC’s and AVCs that they did not have to deal with before.

A Member said she was encouraged by the level of data completeness and accuracy reported for the Fund, particularly in the light of a survey published that day, which had revealed a shocking picture for pension funds in general. It was obvious that The Pensions Regulator would need to address this, so the regulatory burden would not get lighter.

RESOLVED to note:

1. The Summary Performance Report to 30 September 2015.

2. Performance Indicators and Customer Satisfaction feedback for 3 months to 30 September 2015.

3. Progress on the Data Improvement Plan.

4. The Risk Register.