Agenda item

The purpose of this report is to present the Fund’s performance for the three months to 30^th September 2021 against its key performance indicators (KPI’s) in relation to the administration of pension benefits.

The report also addresses the Fund’s business operational position from an overall risk perspective.

The Pensions Manager introduced this report to the Board and highlighted the following points to them.

Workload

There has been an increase in new monthly tasks over the previous 18 months from circa 1,800 to 2,200 tasks per month with the current outstanding cases totalling 4,980 (an increase of 87% since March 2020). The main volume of work is with member refunds, active member retirements and retirements from deferred status. Member estimate requests have increased by 40% over the same period. General enquiries also remain high in volume and a number of these identified as duplicate chasers.

As outlined in the previous quarterly report a project has now been set up to manage the outstanding workload. The project will run for a period of 6 months from October to March with the aim being to clear down all ‘backlog’ cases. Some degree has been cleared already, around 40%.

Resource Recruitment & Training

Recruitment and retention remain a key factor impacting business operations. With a further 2 resignations in the past quarter the administration team is currently carrying 8.5 vacancies across both employer and member services teams in addition the Technical & Compliance post remains vacant and posts identified to support service transformation are still in development. The team is also carrying four maternity leave absences across the service at this time.

As such the agreed phased recruitment plan is behind schedule as staff movement continues to impact progress. Recruitment continues to backfill vacant posts, maternity cover and secondment to projects and overstaffing is being considered at Assistant Pensions Officer level to mitigate the impact of further staff movement.

Annual Summary of Fund Membership Data Quality

This report shows the movement in the Fund's data from when it was first reported on in 2017 against this year’s interim valuation data as at 31 March 2021. There has been continuous growth in the Fund over the last 12 months and a significant increase of 62 new employers since the last valuation in 2019.

The Liability Impact table shows the financial impact of missing or incorrect data and the direct cost to scheme employers. Since 2017, the Fund has managed to achieve a reduction in the overall pension liabilities for employers of over £30 million. The Employer Services team will be using the data from the 2021 report to target data areas that are causing a significant impact on liability and smaller employers with poor data.

Address Tracing

The members that have been previously written to but no response received have been sent a reminder letter in October 2021 and replies are starting to be received. The members that have not been found by the first 2 levels of tracing will shortly be sent to the tracing agency (via Mercer) for a third and final “premium batch” trace service.

After this 3rd level of tracing a process will be agreed in place to deal with untraced members and to review cases again at Normal Pension Age. Tracing pension members and keeping member addresses up to date is a key requirement of the TPR and data cleansing must continue to form part of our BAU processes.

McCloud

The initial project started in December 2020 and to date we have completed data collection for just under 50% of APF employers. The membership completed number is proportionately lower as we have seen returns in the main from smaller employers. Two larger Unitary Authority employers that require data remedy are yet to make a data return which covers just over 7,000 members. We are working with these UA’s to ensure they make data returns by 31/12/2021.

Service Plan

Digital Transformation – Not quite where we want to be and this is likely to have an impact on delivery timetable.  A number of other key projects are in progress.

Accommodation

Positive meetings held over the past month with regards to alternative long term office space. Redevelopment of Keynsham Civic Centre has commenced with access only to one single floor currently. Short term allocation of six work-stations, with potential to use between an additional 2-10 daily through agreement with other service areas.

Information Technology

Expecting to be part of the next phase laptop rollouts.

i-Connect

Since Year End progress has been made to push all small employers to use Online Returns within IC. We now have 100 employers using online returns. We have identified 19 groups of employers including payroll providers to onboard, 4 of which would cover the majority of our active membership. These 4 groups (payroll providers) are now the focus of the project for extract development and onboarding.

Alison Wyatt asked what main issues behind the delay were in receiving new IT equipment, was it funding, priority or supply.

The Service Director for Financial Control and Pensions replied that there had been supply issues initially, but these had now been resolved. He added that a phased rollout across the Council had been agreed and that they were expected to be within the third phase which would take place around February / March. He said that it had been possible to advance receipt in some cases for team members.

Helen Ball commented that she found the Mercer report informative and that she was pleased with the progress of the address tracing project. She also praised the work of the backlog project.

Stuart Anstead asked what consideration the team has given to automation technology such as digital post.

The Pensions Manager replied that a gap analysis was being undertaken to see what processes can be utilised. He said that during the pandemic some automation had taken place, but further work was needed to progress requirements.

The Chair asked how the team decides what to prioritise and how can the Board support the decisions that are made.

The Pensions Manager replied that they do look to prioritise their workload as much as possible and that there is regular contact between the managers and the service teams. He added that he felt there may be a consideration needed to outsource some work to consultants over the next 6 – 12 months.

The Chair asked if support was available for internal staff to progress their career.

The Pension Manager replied that there was and they have always tried to promote and retain staff as much as possible within the team.

The Service Director for Financial Control and Pensions said that it was probably going to be towards the middle of 2022 before a ‘new normal’ was in place. He said that certain pressures will probably remain on the team for some time as even pre-pandemic it took around two years to fully train a Pensions Officer.

He added that they do review the Service Plan on a regular basis and that capacity within the team was required to implement any new available technology.

Stuart Anstead asked if a long-term outsourcing relationship should be put in place to try to smooth out the current problems.

The Service Director for Financial Control and Pensions replied that they do have some framework arrangements in place but was aware that they also have their own delivery challenges.

Alison Wyatt commented that from viewing a recent advert she felt that team members were being asked to do quite a lot within their roles for the salary. She asked where were job adverts mainly advertised.

The Pensions Manager replied that they were advertised on the Council’s website and they are also posted on the LGA website to advertise more widely.

Alison Wyatt asked if they had considered using an agency to advertise posts.

The Pensions Manager replied that they have done so in the past, although not on a regular basis.

The Chair commented that on behalf of the Board he would like to thank all the staff for the work they have done and continue to do.

The Board RESOLVED to note the Fund performance for the three months to 30th September 2021.