Agenda item

This report updates the Pension Board on various pensions 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 Board firstly focussed on the Pensions Administration Performance Report, which reviewed the performance of the Local Pensions Partnership Administration (LPP) contract against agreed Service Level Agreements (SLAs) during October to December 2022. Members noted that the full Q3 2022-23 Performance Report was attached as Appendix 1 to the report.

As an initial introduction, Sawan Shah provided an overview of the membership statistics for the Brent Pension Fund, which as of December 2022, consisted of 5,999 active members, 7,138 pensioners (including dependants), and 10,065 deferred beneficiaries. Regarding these numbers, the Board noted that membership did not tend to vary significantly from quarter to quarter. Sawan Shah explained that the majority of the working age active members fell into the 31 to 60 age groups while 51 to 60 was the banding with the highest number of deferred members. For pensioner and dependant members, the Board were informed that the number of members in the under 65, 65 to 69, and 70 to 74 bands was broadly the same, with membership numbers declining progressively into the older bands.

Regarding LPP performance in comparison to SLAs, the Board were notified that on 11 November 2022 the Brent Pension Fund had completed migration to a new pension administration system called Universal Pension Management (UPM). The migration process had impacted pension administration performance, with the quarterly average percentage of cases processed on time being 84.0%, which was below the usual contractual SLA target of 95%. However, due to disruption caused by the UPM migration, revised SLAs had been agreed with the Fund, with a target of 90% of payment cases being processed on time and 70% for other case types. In addition to the underperformance compared to contractual SLAs of case processing, the Fund saw significant increases in its average Help Desk wait times. In October 2022, the average wait time was 3 minutes and 58 seconds, in November this increased to 4 minutes and 55 seconds, and in December this increased again to 9 minutes and 2 seconds. Overall, average wait times across the quarter were approximately 6 minutes with the last two months of the quarter above the target time of 4 minutes. Once again, this was attributed to an increase in calls and caseload spikes related to the UPM migration. Sawan Shah reassured the Board that monthly meetings were held between the Fund and LPP to monitor performance and review trends.

Before handing over to John Crowhurst (Commercial Director, LPP) to provide a more detailed review of pension administration performance, Sawan Shah highlighted the complaints data since the last Pension Board meeting in November 2022. 13 new complaint cases had been received, which included 4 new complaints in November 2022, 7 new complaints in December 2022, and 2 new complaints in January 2023.  Out of the 13 cases, 6 related to delays, 6 related to general service and 1 related to payments. No Internal Dispute Resolution Procedure (“IDRP”) complaints were received. The Board were informed that Brent and LPP were taking action to ensure that these cases were resolved quickly, although the complex nature of some cases had impacted on resolution timescales. Furthermore, following the completion of each case, a process was undertaken to ensure any lessons learned were reviewed and, if necessary, processes and procedures would be updated.

Following Sawan Shah’s introduction, the Chair welcomed John Crowhurst to the Pension Board, who provided a detailed overview of the Q3 2022-23 Performance Report. John Crowhurst echoed Sawan Shah’s earlier statement that Q3 performance was largely attributable to the UPM migration. It was explained that prior to the migration there was a ‘blackout’ period where work could not be processed which created spikes in workload. The Board were informed that Q4 performance was still below SLAs, but performance had improved in comparison to Q3. John Crowhurst stated that for the next Pension Board meeting in July 2023 LPP would provide 6 months’ worth of performance data, spanning January to June 2023. This would provide the Board with a more accurate trend of administrative performance. In addition to the UPM migration, staff turnover had been a particular challenge at LPP. The Board heard that this was being mitigated through extensive recruitment campaigns and the introduction of a new training programme to upskill new starters.

Regarding performance data, throughout 2022 the average Help Desk call wait time varied from a high of 17 minutes and 19 seconds in April, to a low of 2 minutes and 47 seconds in July. In December 2022, the average wait time was 9 minutes and 2 seconds, but the Board was informed that performance was expected to improve in the near future. The reduction in performance had also resulted in a reduction in customer satisfaction scores, with only 34% of the customers going through the retirement process being satisfied in December 2022, compared to 58.4% in November 2022. Help Desk satisfaction was up in December 2022 at 67.1%, compared to 62.2% in October 2022 and 61.1% in November 2022, although this was below the year-high achieved in September 2022 of 71.6%. The Board were advised that as workload spikes due to blackouts were cleared, customer satisfaction scores were expected to increase.

After the conclusion of John Crowhurst’s overview of the Performance Report, the Chair invited questions from Board Members, with questions and responses summarised below:

• Regarding the implications of performance targets not being met, Sawan Shah reiterated that the final quarter of 2022 was forecasted to be difficult due to the UPM migration. However, the Board were reassured that issues caused as a result of associated processing delays would be taken into account as part of any final outcome and payment arrangements. The Board heard that officers would continue to monitor administration performance in order to ensure that performance returned to contractual SLAs, with performance likely to improve since the completion of the UPM migration. John Crowhurst expressed confidence that performance would improve in the long-term, returning to levels prior to the UPM migration. Furthermore, the Board were informed of other future LPP initiatives such as the McCloud Remedy and the monthly return function, allowing employers to submit data monthly rather than annually, which was hoped to improve future performance.

• Concerning feedback on the Help Hub and News Hub, John Crowhurst stated that whilst customer feedback was limited to date a summary of engagement activity following the launch of the Hubs could be provided. The Hubs would be utilised more once the monthly return process had been implemented.

• In response to a query about potential face-to-face training with employers, the Board were informed that at the time of the meeting all training was scheduled to be held online as it was currently felt to be more accessible, although that would not preclude face-to-face sessions being held. John Crowhurst explained that, so far, half of all employers had booked onto the online training, with further engagement planned with the other 50% of employers. In addition to training, a dedicated phoneline for employers was available to support with any queries from employers.

• In referencing section 5 of the report, ‘LPP Business Update’, the Board enquired about attendance at the Employers Forum held in November 2022. Sawan Shah stated that attendance details could be provided separately, with the Chair advising that attendance and engagement had been positive.

• Regarding preparation for year-end and the Annual Benefit Statement (ABS), John Crowhurst informed the Board that for some employers, this year would be the first year-end using UPM. Responding to learning from last years’ experience, LPP had been communicating to ensure that employers were aware of the differences in process. The Employer Engagement Team were available to support employers with submitting year-end files and progress would be tracked in advance of the final submission deadline in April which would be communicated to officers. It was reiterated that the Fund, LPP, and employers were jointly responsible for ensuring that year-end files were submitted on time.

• In responding to a question concerning the support available for employers submitting monthly returns, John Crowhurst highlighted the Employer Help Desk, Help Hub, and Employer Engagement Team. If employers were consistently missing submissions, escalation to the Fund was an option. Prior to the implementation of the monthly returns, training sessions were available for employers using payroll suppliers.

• The Board were advised that the graphs on page 38 of the agenda pack, titled ‘Members Registered’, illustrated the number of Fund members registered for PensionPoint for each quarter.  Clarification was provided that the additional graph illustrated the percentage of active, deferred, and pensioner members registered in each quarter. John Crowhurst stated that spikes in members registering was expected around ‘bulk activity’, such as the ABS in August.

Following the discussion of the Performance Report, Sawan Shah spoke on section 6 of the report which focused on external payroll providers. The Board were informed that over the last few months, officers had been concerned about a particular payroll provider that was used by many of Brent’s schools causing issues across the Local Government Pension Scheme (LGPS) and Teachers’ Pensions. The issues the Council had faced included non-receipt of data returns by the relevant deadlines, errors on data returns and inability to resolve issues due to a lack of communication. In addition, the issue had also caused complications in relation to the audit of the Council’s Teachers’ Pensions End of year certificate 2021/22 which had been brought to the attention of the Council’s Audit and Standards Advisory Committee. Sign-off of the certificate had been delayed beyond the deadline of 30 November 2022 due to delays in receiving evidence requested by the external auditors from the payroll provider.

The Board were advised that the Council had written to schools in the borough who used this payroll provider’s services, highlighting the need to ensure that their payroll provider was fulfilling all of their responsibilities, in addition to reiterating the need to maintain appropriate contract management.  Clarification was provided that as schools were the contract holders, it would be their responsibility to monitor payroll provider performance. The Council had also highlighted the consequences of the issues including interest charges, the inability to update member pension records and the potential for incorrect pension calculations.  In noting the sanctions available to the Fund, the Board recognised and supported the pragmatic approach being taken in an attempt to resolve the issues identified and in supporting employer organisations. Furthermore, the Council was aware that some schools had already reviewed their arrangements with the provider and elected to move to another provider in the coming months.

In thanking Sawan Shah for the update, the Chair welcomed questions from Board members, with questions and responses summarised below:

• Regarding alternative sanctions and mitigations to ensure timely data returns, Sawan Shah stated that the main mitigation fell on employers to hold regular meetings with payroll providers to monitor performance and receive regular update reports. The Board were advised that the Fund wanted to avoid the use of financial penalties wherever possible, however, this remained an option within the regulatory strategy, if required.

As there were no further questions from Members, the Chair thanked John Crowhurst and officers for the update, and it was RESOLVED that the report be noted.