Agenda item

To update the Pension Board on various pension administration matters as part of its remit to oversee the administration of the Brent Pension Fund.

Sawan Shah (Head of Pensions, Brent Council) introduced the report, which updated the Pension Board on various pensions administration matters as part of its remit to oversee the administration of the Brent Pension Fund.

The first part of the update concerned Pensions Administration Performance, covering the period from April to June 2022.  In considering the report the Board noted:

·            The Pensions Administration performance update for the Q1 2022-23 monitoring period, as detailed within Appendix 1 of the report.

·            The quarterly average percentage of cases processed on time was 94.7%, which whilst below the contractual Service Level Agreement (SLA) target of 95% was within revised targets agreed during the Universal Pensions Management (UPM) migration period.

·            In terms of Helpdesk call performance there had been a significant reduction in average call wait times with performance in June at 5 minutes 21 seconds and the average calls answered having increased from 84.6% in April to 94.7% in June.

·            Phase 1 of the migration to Universal Pensions Management (UPM) had been completed with 9 LPPA clients now live and Brent scheduled to go live in November as part of the Phase 2 migration.

·            The number of complaint cases remained low with 8 new cases received since the previous update and action being taken to ensure these were resolved as swiftly as possible. Following the completion of each case, a process was undertaken to ensure any lessons learned were reviewed and consequently, if necessary, processes and procedures updated.

·            The Pension Regulator scores achieved in relation to the accuracy of common and conditional data had improved further since the previous quarter.

Jo Darbyshire (Managing Director, LPPA as the Pension Administration Service for the Fund) then provided the Board with a more in-depth overview of pension administration performance as detailed within the LPPA Q1 Pension Fund Administration Report.  Key issues highlighted were as follows:

·            Referring firstly to progress with the introduction of the new pension administration system and migration to Universal Pensions Management (UPM) the Board was advised that Phase 1 of the process had been successfully completed with nine out of 18 LPPA clients having ‘gone live’.  Phase 2 migrations were now underway, which included Brent, who were due to go live in November 2022.  The Board were advised of the checks and measures in place to ensure a smooth transition to UPM with regular updates and a detailed technical sign off procedure in place to support the transition to the new system.

·            Whilst anticipated and short-term in nature, it was recognised that the operational impacts arising from the phased “go lives” of the UPM migration programme had adversely affected performance against SLA which had been reflected in the Q1 performance data.  Whilst overall performance against SLAs was improving it remained below target with the key areas impacting on performance including – increased volumes and spikes of work post go-live, system downtime with a 2 day Altair outage at the end of June and ongoing work and reallocation of resources in support of the Phase 2 migration programme.

·            Performance was expected to improve during Q3, with call wait times under the non-contractual target of 4 minutes since June and learning from Phase 1 of the migration coupled with the provision of additional resource, training and systems having benefitted performance in relation to the Helpdesk throughout Phase 2.

Members were then invited to ask questions on the update provided, with responses summarised below:

·            An assurance was provided that the “go live” date for the completion of Brent’s UPM migration remained on track for 11 November 2022, with the Board advised of the ongoing anticipated impact in terms of Q2 performance (covering July – Sept 22).

·            In response to concerns relating to the performance in average call wait times the Board were advised that although non contractual the reasonable average wait time was recognised as 4 minutes which was being delivered prior to Project PACE.  The Board were therefore keen to support the priority identified to continue improving performance in this respect and return to the previously consistent levels of performance once UPM migration had been completed alongside the reassurance provided regarding mitigations to maintain performance throughout Phase 2 of the migration programme.

·            In terms of lessons learnt from the Altair outage, the Board were advised of the upgrade made by LPPA in terms of their system architecture and move towards a cloud based infrastructure, resulting in greater robustness.

·            The Board enquired about a communications strategy to support Brent’s UPM migration.  In response members were advised of the measures taken by LPPA to ensure delivery of a full communications programme and strategy involving both employers and members.  This included training and self-help guides, direct communication via emails and through the LPPA website and annual benefit statements, with further communications to be rolled out as the functionality of the new portal became available, which were all welcomed by the Board.

Having considered the performance update, the Board then moved on to consider an update on an issue identified in relation to the schemes retirement procedures and data held on pension increase dates affecting deferred members.  Having noted the summary of the case identified (as detailed within section 3.12 – 3.15 of the report) the Board was assured of the action taken to review the cause of the issues identified, which had resulted in additional cases and overpayments being identified, and of the action being taken in response to consider how any overpayments would be dealt with on a case by case basis taking account of the individual circumstances and impact on the members concerned.

Members were then invited to ask questions on the update provided, with responses summarised below:

·            In response to concerns raised, it was confirmed that the storage data error identified had not constituted a data breach or GDPR issue.

·            Having been assured of the actions being taken to address the issue, the Board noted the additional measures being implemented to mitigate against any similar incidents in future, which included additional training for members of the Retirement team; the introduction of an enhanced and more proactive monitoring process and as a longer term solution an upgrade in the way pension increase data was stored and applied based on operational workflows developed as part of the business process reengineering process undertaken as part of migration to the new UPM system.

As a final part of the performance update the Board were provided with details on progress with the Annual Benefit Statement (ABS), which the scheme manager was required to issue to all eligible active and deferred members by 31 August each year.

As part of the update Sawan Shah advised:

·            For active members, an ABS was issued to all members identified on the year end returns from employers by the deadline of 31 August 2022. There were a small number of records where queries from year end returns had not been resolved in time or an annual return had not been completed and sent to the Fund by the relevant employer (one of which was now outstanding).  Whilst only representing a minority of members, the Board was advised that the number of statements outstanding was higher than the previous year with the outstanding statements due to be provided as soon as the relevant queries had been cleared and relevant information received from the employer.

·            Whilst the Pension Administration Strategy (PAS) enabled the scheme manager to take action against employer(s) who did not comply with their statutory and legal obligations to the Fund, it was not felt that no formal action was required, at this stage, in terms of treating the outstanding statements as a material breach that needed to be reported to the Regulator.  This view had been reached taking account of the breaches policy operated by the Fund (as set out in Appendix 2 of the report) and as a result of the close work being undertaken with LPPA and the relevant employers to monitor and resolve the outstanding issues and queries as soon possible and as a high priority.  It was noted that employers who had not submitted their returns in a timely manner had been contacted multiple times with any significantly overdue submissions having been escalated to senior management of those employers and the PAS providing the Fund with the powers to take action against employers who had not complied with the standards set out within the strategy.

·            In light of the issues experienced during the current year, officers planned to review the Breaches Policy and PAS to see if there were any further areas which could be strengthened, the results of which would be reported back to the Board for future review.

Whilst concerned at the delays identified, the Board recognised the work being undertaken between the Fund and LPPA to closely monitor the position and work with employers to ensure the prompt submission of their returns.  Members agreed that the issues identified had not constituted a material breach (based on the reasons outlined) and on the basis that whilst technical in nature, the issues identified were not felt to represent a systemic or continuing breach.  The Board were keen, however, to ensure the outstanding queries were resolved as soon as possible.

As a final update the Board noted that the Fund would be holding an Employers Forum on 23 November 2022, which Board members would be welcome to attend and all fund employers and their payroll providers had been invited to participate in. The event would include presentations from the Fund Actuary, Hymans Robertson and LPPA, and will provide updates on the 2022 valuation and other employer responsibilities.  Given the importance and issues identified, the Board were keen to ensure that all Fund employers were encouraged to attend the Forum and requested that an update be provided for the next meeting on attendance at the event.

As there were no further questions from Members, the Chair thanked Jo Darbyshire and officers for the update, and it was RESOLVED that the report be noted with a further update to be provide for the next meeting on the Employers Forum and resolution of the outstanding issues in relation to the Annual Benefit Statements.