Agenda item
Pension Administration Service Update
This report includes the LGPS pension scheme and other benefits for Brent Council pensionable employees as well as other scheduled and admitted bodies within the borough area.
Minutes:
David Veale (Director of Human Resources and Organisational Development) presented the report, which updated members on the performance of the pension administration contract and progress on the appointment of a new provider. Focusing on the key points of the report, David Veale drew members’ attention to the performance on issuance of annual benefit statements to members of the Local Government Pension Scheme (LGPS), Brent record keeping plan and provision of the Pension Administration Service (PAS) when the current contract with Capita expired.
In terms of annual benefit statements, Mr Veale explained that the LGPS regulations required that statements be issued to all active members by 31st August each year, following the end of the tax year. The end of year returns required to be sent by Capita were 5, 666 in total. However, only 4,265 statements had been sent by 31 October 2017, with 1,401 statements still outstanding. This was mostly due to incomplete records, calculation errors and members who had left or retired between April 2017 and March 2017. With regards to deferred memberships, Mr Veale explained that although there had been an improvement by approximately 9% in comparison to the previous year, 1,987 statements had not yet been sent out due to a range of queries, mostly because deferred members had changed addresses and had not informed either the PAS or Brent administering authority. As a result of not meeting the 100% distribution of Annual Benefit Statements, a material breach was self-reported to the Pension Regulator on 28th September 2017. Subsequently, there had been significant engagement between the Pension Regulator and Brent Administrating Authority with fortnightly updates to the Pension Regulator being given.
Referencing the appendices to the report, he drew members’ attention to the regulatory requirement for maintaining a record keeping plan and the need to improve the pension scheme data held by the Council. The Plan set out specific data which required attention and remedial action. Quotes for conducting data cleansing and correcting specific data such as address tracing had been obtained and considered a necessary expenditure in order to meet the legislative requirements for such service provision.
He then drew members’ attention to the main part of the report, which focused on the progress with finding a new pension administration service provider. Members heard that the administration of the Local Government Pension Scheme (LGPS) for Brent Council had been outsourced since 1994. The current contract was awarded to Capita Hartshead now Capita Employee Benefits in 2011, originally assigned to Capita on 1st October 2011 for a period of six years. The contract was extended by one year in September 2017, an option within the contract, whilst the process for finding a new suppler and other options were being explored. Upon agreement by the Council’s Management Team (CMT), it was decided that rather than going down the procurement route, the Council would aim for a shared service with another Local Authority and seek to enter an inter-authority agreement.
At an engagement event held on 4 September 2017, attended by officers, including the Chair of the Pension Board, the Council met with three of the invited providers – Local Pensions Partnership (LPP), Orbis and West Yorskhire Pension Fund (WYPF) who delivered their presentations. Referencing Table 1 from the report, Mr Veale explained that following a process of due diligence and based on a range of factors as laid out in the report, Local Pensions Partnerships and West Yorkshire were shortlisted. He further elaborated that despite West Yorkshire Pension Fund offering a more competitive quote, the Local Pension Partnership was ultimately chosen as the new pension administration service provider to the Council. This was due not only to their IT systems and experience with delivering sustained quality service but also their reputation and experience with migrating shared services. The Board heard that the recommendation had already been approved by both Cabinet and the General Purposes Committee and work on migrating the service to LPP would shortly begin.
RESOLVED that:
i) The updates in the report regarding the new pension administration service provider be noted;
ii) The appointment of the Local Pension Partnership be supported by the Board;
iii) Officers be commended for their work and efforts on the project
Supporting documents:
- Pension Board Report Nov 17 Final, item 8. PDF 140 KB
- Appendix A: Pensions Board 21.11.17 Breach Report, item 8. PDF 109 KB
- Appendix B: Pension Board 21.11.17 Record Keeping Plan, item 8. PDF 167 KB