Agenda item

To updates the Pension Board on pensions administration performance and related matters as part of its remit to oversee the administration of the Brent Pension Fund.

(Agenda republished to include this item on 31 October 24)

John Smith (Pensions Manager) introduced the report, which updated the Pension Board on various pension administration matters as part of its remit to oversee the administration of the Brent Pension Fund.  The Board was advised that the update included a review of performance against agreed Service Level Agreements (SLAs) for Q2 (July – September 24) with a brief overview provided on Fund membership, which as of 30 September 24 comprised 6,452 active members, 10,158 deferred members and 7,528 pensioner and dependant members.  The Board’s attention was drawn to the high number of deferred members recorded, which members were advised had been subject to review and it was noted had been impacted by figures including refunds and benefits.

In focussing on overall performance during Q2 the Board was advised that this remained high overall with 98.4% (July), 98.1% (August) and 98.2% (September) of all case types being processed, meeting contractual SLA targets as detailed in section 3.4.7 of the cover report.  The Fund’s perception was that the service was continuing to improve, with it noted that only transfers-out (93.4%), which were identified as less critical, had fallen below SLA (95%) and Figure 2 in the cover report providing detail on the number of cases that had been processed grouped by category.  Performance in relation to complaints and Helpdesk call performance had also remained strong.

Following introduction of the report, the Chair welcomed Emma Hebblethwaite from LPPA, the Council’s administration service provider, who provided a further detailed update regarding recent pensions administration performance, summarised below:

·             Members were informed that overall operational casework performance remained positive for Q2, with a performance average of 98.2% against SLAs.  It was noted that nine cases relating to Transfers Out had missed the target SLA with the issues identified as a result having now been resolved.

·             In noting the performance update in relation to ongoing casework, the Board received an update on the work being undertaken in relation to Active to Retirement processes including the number of retirement notifications received on time v those notifications received late, number of on time notifications processed within target and performance in relation to late notifications processed.  In terms of issues impacting on performance members were advised of the additional requirements in relation to members with Additional Voluntary Contributions (AVC) and ongoing work with employers to promote the need for the submission of information on a timely basis to support the processing of cases.

·             In terms of LPPA contact centre calls performance, the average wait time had consistently been under the target of 4 minutes, with an average wait time over Q2 of 2 minutes 16 seconds.

·             In terms of Customer Satisfaction scores, members were reminded that Contact Centre satisfaction now included overall satisfaction scores as well as for the individual call handlers, which was typically higher than the overall score, with scores for Q2 at 92.2% and 75% respectively and customer feedback subject to ongoing monitoring to support staff development and training.  It was noted that an increase in call waiting times had seen a slight reduction in overall satisfaction during September.  The Q2 Administration report had also included satisfaction scores for retirements, although it was noted that these scores had been impacted by a majority of those surveyed not having responded with low response rates increasing volatility.  Of those who had responded customer satisfaction was 22.2% for actives into retirement and 77.3% for deferred into payment.

·             Regarding complaints, members were informed that numbers remained on a downward trend with 14 new cases having been received since the last Board meeting, representing a rate of 4.6 per month.  Whilst no Internal Dispute Resolution Procedures (“IDRP”) were received in Q2 with one outstanding case having been determined along with a Pensions Ombudsman case in September, Brent and LPPA continued to take action to ensure that IDRP cases were resolved swiftly. However, the complex nature of some cases meant that it was not always possible resolve these quickly, with each case also reviewed following completion to ensure any lessons were learnt and, if necessary, processes and procedures were amended.  As at the 6 November 24 the Board was advised that there were five open cases all listed at Stage 1 with the main cause being identified as delays experienced in casework.

·             In terms of LPPA Project updates the Board noted the progress being made in relation to the Efficiency and Service Improvement Program (ESIP) following the transition to the new Pension Administration System which members were advised had been focussed on delivering automation and improved self-service capability.  This included 9 projects in flight with the automation of Deferred Retirement Quote having been launched in July and work underway on similar functionality for active members. Other activity included work to improve the monthly returns process and the member and employer online portals.  Reference was also made to the work being undertaken in partnership with Civica and Intellica on a data project to improve data quality ahead of valuation and the introduction of the Pensions Dashboard with the creation of test environments now complete and Data Validation Checks being used to check the integrity of member data having also been scoped and built and the results due to be shared in Q3.  The project would include the production of a series of dashboards to provide clear visibility of the integrity and accuracy of the data held to comply with regulatory change and enable the launch of further self-service and automation for members and employers.

Following the update, the Chair invited questions from Board members, with questions and responses summarised below:

·             In response to a query regarding the notice required by employers prior to an active member retirement to enable payments to be made within 30 days of that retirement date, the Board was advised this was a target set by LPPA with the aim of seeking to avoid any break in payments.  The target was regarded by LPPA as practicable and realistic, but performance would also need to take account of other issues such AVC payments needing to be resolved.  In terms of the 30 day notice required from employers, whilst challenging and non-contractual this was felt to represent good practice.

·             In seeking an update on the nature of outstanding casework identified, confirmation was provided that none of the cases involved issues of significant concern with most relating to their cycle in the system and awaiting the supply of additional information before they could be progressed.  Cases likely to impact on valuation continued to be actively focused on, such as deferred benefits and refunds or where a members status had changed.

The Board then moved on to consider the details and update provided in relation to progress on Annual Benefit Statements (ABS), with the statutory requirement for these to have been issued to all eligible active and deferred members by 31 August annually.  The Board was reminded on the requirement for scheme employers to now submit monthly returns to enable preparation of the ABS within the required timescale. Given the move to monthly returns, officers had been closely monitoring return submissions. A range of employer training sessions had also been delivered to support them in the submission of their returns and resolution of any queries. Regarding the current position, the Board were advised that (with the exception of four) all active employers (up to April 2024) were up to date with their submissions.  It was noted that the four unable to submit monthly returns had been able to submit an annual return, with work continuing to promote the benefits of the monthly return process in order to ensure the Fund remained in a good position.

In terms of the current position in relation to the production of the Annual Benefit Statements, Emma Hebblethwaite advised that of the active members the Fund had been able to produce 97.1% of statements.  For deferred members this had been 99.9% which had shown an incremental improvement over the 95% for active members and 99% for deferred members in 2022-23.

Having invited questions from Board members, the following issues were raised and responses provided:

·             Referring to performance in relation to the production of ABS for active members further details were sought on whether the statements it had not been possible to provide related to issues with specific employers or a more general issue.  Officers confirmed that no specific trends had been identified, with the process felt to had gone well overall and those that had missed the deadline not considered to be material or a reportable breach on the basis that performance had still exceeded 95% and improved when compared to 2022-23.  Officers had, however, continued to monitor the situation and proactively work with employers to ensure returns were being submitted on a monthly basis with those where performance had fallen short encouraged to change their payroll providers and the Fund able to use the powers set out in the Pensions Administration Strategy where employers were felt to continually not be complying with the standards expected.

Turning the Board's attention to the final part of the update, John Smith (Pension Manager, Brent Council), then moved on to update members on progress with the migration of Brent’s current in-house pensions payroll to LPPA’s UPM system, which had been agreed by the Council’s General Purposes Committee in April 2024.  In terms of progress, the Board was advised of the improvement achieved in the Fund’s conditional data as a result of the data cleanses which had been required to facilitate the migration with the first data cut submitted in September 2024 and the subsequent parallel run having been successfully completed and signed off.  Preparations for the second data cut and parallel run were now underway, which was due to be undertaken in November 2024, with communication material for members pre and post migration having also been agreed along with the General Ledger reporting requirements for the monthly payroll and requirements for single payments also being finalised.  Details were currently awaited from HMRC on the set-up of a new PAYE reference for the pension fund with NatWest also in the process of providing a new BACS service user number.  The Board was advised that the expected rollout of the system was still planned for January 2025 with the project being managed by a dedicated project manager at LPPA, working closely with officers from Brent’s pension and payroll team and Civica and the high-level project timetable provided in Appendix 2 of the report.

The Board was also advised on progress being made in relation to the McCloud remedy with LPPA having now placed eligibility flags on all records that had been identified as being within scope for the remedy.  This had included applying the underpin and calculating benefits for active members retiring with an eligibility flag, and whose data had been verified as being correct.  The Board noted that where the underpin had been applied, early results had shown that the underpin was driving a small increase in benefits (£300 p.a. on average) involving a small percentage of cases (4%) impacting on members who had received a salary increase in the remedy period.  At the same time significant increases had also been identified in affected transfer values, which it appeared were attributed to the lower retirement ages in the final salary scheme and, consequently, higher factors.

As a final update, the Board was advised that work was progressing well on the transition to the Pension Dashboard which all Public sector schemes were required to connect to by 31 October 2025.  LPPA had a dedicated project manager in place with a current focus on systems requirement (including the rules for partial matching of records and the treatment of AVCs) and business readiness, including dealing with new enquiries relating to dashboard.

In thanking Emma Hebblethwaite and John Smith for the update, the Chair commended the progress outlined and with no further comments it was RESOLVED that the report be noted.