Agenda item

This report updates the Pension Board on various pension administration

matters as part of its remit to oversee administration of the Brent Pension

Fund.

John Smith (Pensions Manager, Brent Council) was then invited to introduce a 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 was advised that the update included a review of performance against agreed Service Level Agreements (SLAs) for Q4 2024-25 (1 January 2025 to 31 March 2025) with a brief overview provided on Fund membership, which as of 31 March 25 comprised 6,730 active members, 10,260 deferred members and 7,685 pensioner and dependant members.  The Board’s attention was drawn to the maturing nature of the age demographic for Fund Members with 56% of working age members over 45 and 49% of the 35-60 age cohort for deferred members being over 50.

In focussing on overall performance during Q4 the Board was advised that performance had remained high overall with 98.6% of all case types being processed meeting contractual SLA targets as detailed in section 3.4.6 of the cover report.  The Fund’s perception was that the service had stabilised with it noted that none of the case types 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.  Members also noted the Case Work Performance table, within section 3.4.8 of the cover report which compared number of cases completed to the number of cases received and was felt to provide a more complete overview of performance.

Following introduction of the report, the Chair welcomed Chris Batts 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 Q3 with a performance average of 98.6% against SLAs with a more detailed outline provided as part of the Case Work Performance table and fluctuations in case work being received over the year as a result of various triggers including regulatory and statutory deadlines during relevant reporting periods and the monthly data return process, new joiners, payment queries and deferrals as well as the focus on migration of Brents Pension Payroll.

·            In terms of LPPA contact centre calls performance, the average wait time remained under the target of 4 minutes, with an average wait time over Q4 of 3 minutes 22 seconds which was recognised as being 52 seconds longer than the previous quarter with 69% of the calls received being answered within 4 minutes.

·            Progress continued to be made in terms of employer retirement notifications, with enhanced monthly return timeliness and improvements in retirement notification periods. Whilst not currently subject to an SLA, LPPA aim remained to pay retirees within 30 days of their leaving the service. This was in recognition of LPPA’s need to provide a seamless transition without gaps, so as to avoid a break between salary and pension payments. To do this, it was noted that the employer notification of staff members’ retirement was key in making timely payments possible. Additional Voluntary Contributions (AVC’s) were also stated to complicate the payments process, often leading to delays.

·            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 Q3 at 78.7% and 92.6% respectively and customer feedback subject to ongoing monitoring to support staff development and training.  The Q4 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 66.7% for actives into retirement and 33.3% for deferred into payment with a key issue highlighted as timing of payments.

·            Regarding complaints, members were informed that numbers remained consistent with previous quarters and 10 new cases having been received since the last Board meeting, representing a rate of just over 3 per month.  The new cases were split between the complaints categories relating to delays and general service with the breakdown marginally worse than the previous quarter but with numbers gradually falling overall.  The Board was also advised of the establishment of an internal complaints board by LPPA designed to undertake deep-dive analyses and identify preventative measures aimed at addressing the root causes of complaints and members also advised of the jurisdiction of the Pensions Ombudsman in relation to internal dispute resolution cases.

·            Progress continued to be made in terms of scheme member registrations to the Pension Point online Portal with quality improvements also demonstrated, enabling members to more easily access their payslips and P60s online and the focus on efforts to encourage the greater adoption of digital services by members.

·            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 the automation of processes relating to active and deferred retirement quotes, deferred statements for leavers and refunds and the delivery of online retirement forms, which were due to be rolled out to Funds by the end of Q1 2025.  Work also continued on automation of the deferred retirements’ payment process (following previous automation that was delivered to produce deferred retirement quotes) as the next automation process which would be followed by automation for the payment process for CARE only active retirements.  As part of the process, bank validation account name checking was also in testing, to be rolled out in Q1 2025 as an enhanced security and anti-fraud measure with other activity in flight including 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 Fund valuation and the introduction of the Pensions Dashboard with the creation of test environments now complete and Data Validation checks being used to assess the integrity of member data.  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.

Work also continued in relation to implementation of the Pensions Dashboard will enable individuals to access their pensions’ information online, securely and all in one place with the connection date for public sector schemes to connect to the Dashboard remaining on schedule for 31 October 2025. 

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

·            Whilst welcoming the stable nature of the performance update provided, further details were sought on the increase in contact centre call response times and action being taken to address the concerns outlined. In response, Chris Batts reported that the average wait time had increased between Q3 and Q4 due to March and April being the peak seasonal time for help desk calls. LPPA had observed an increase in calls relating to changes to all public service pension schemes as a result of the McCloud judgment with these impacting on the number of calls being received and subsequent performance.  To help address these issues LPPA had increased call centre resources and introduced further training in an attempt to reduce average call and wait times with it highlighted that performance still compared favourably to other call centres, were wait times often averaged between 10-15 minutes. It was also noted that when the previous new pension system was implemented wait times exceeded the 10-minute mark. Data migration and system backlogs clogged availability; however, this had continuously trended down in recent years and officers believed that improvements would continue.

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 being made in relation to the McCloud remedy with the project currently flagged amber.  The Board was advised that LPPA’s focus was currently targeted on re-running eligibility flags, preparing retrospective cases and testing the underpin in anticipation of the Annual Benefit Statement deadline of 31August 2025.  The LPPA had not confirmed that UPM’s McCloud underpin routines would be fully functional in time for the 31 August 2025 deadline, with members advised this may mean Brent having to inform the Pensions Regulator and its members that it would need to exercise its discretion to delay the implementation for ABS until 31 August 2026.  As an update on the concerns highlighted regarding the progress being made by Civica in being able to confirm the release dates for the next milestones towards McCloud compliance, the Board was advised that LPPA continued to provide regular updates measuring progress and monitoring the delivery of the remaining UPM functionality and continued to undertake data cleanse projects to maximise the number of cases that would pass the validation checks with the key being UPM’s ability to bulk process retrospective cases. LPPA remained in regular contact with Civica given the route to compliance would depend on Civica agreeing a timetable for implementing the outstanding tranches of software.  In noting the update, members welcomed the progress being made to address the concerns identified.

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.  An update was also provided in relation to progress in preparation for the 2025 Fund Triennial Valuation with LPPA due to submit their required data to the actuaries at the end of July 2025.  In noting the delay, the Board was advised this had been due to the decision by the LPA to revert to the previous (pre-McCloud) format.

An update was also provided in relation to re-enrolment, with confirmation provided that Brent had re-enrolled all staff and all staff within maintained schools into a relevant pension scheme on 1 November 2024 with 4,149 of 4,755 employees active members of a public sector pension scheme and 340 out of 606 employees who were not active members not eligible to be re-enrolled.  This had also involved 182 employees being re-enrolled in the LGPS, 83 into the Teachers’ Pension Scheme and 1 into the National Health Service Pension Scheme with the re-enrolment date being moved forward from February 2025 to November 2024 felt to have worked well.  In terms of lessons learnt, the need to commence the communication and engagement process earlier in future had been identified along with a need to refine standard letters and provide clear advice to schools and payroll providers that the next re-enrolment date would be 1 November 2027, which would be non-negotiable.

Following on from the final updates provided, the Chair once again invited questions from Board members, with comments summarised below:

·            In response to a query regarding the McCloud deadlines Chris Batts advised that the most recent updated had been provided to the Council on 18^th of July 2025.  Whilst some guidance was still awaited it was expected that at least 95% of Annual Benefit Statements could be provided.  Clarification was also sought on the position relating to any potential deferral, which officers confirmed related to the inclusion of McCloud data within the ABS.  Given the relatively small numbers involved any potential delay was not seen to present a significant cause for concern with it confirmed that, at this stage, no discretion in relation to any deferral had been exercised and the matter flagged as a precaution to lay the groundwork to lawfully exercise the discretion, if subsequently needed.

·            In response to details being sought on the breakdown of those members identified as ineligible for re enrolment, the Board was advised these included a wide variety of categories, such as those people who had chosen to opt out within the last few years; members working under contracts of three months or less, earning £10,000 per year, already part of schemes outside of the LGPS as well as various other tests.

·            In noting the update provided on the re enrolment process details were sought on the impact this had on administration of the pension scheme and valuation of the Fund.  In response, the Board was advised of the preference to ensure employees were enrolled in the scheme due to it being a strong offer for their wellbeing, an important retention tool and part of the total pension’s rewards package.  Regarding those choosing to not to enter the scheme the reasons would be varied and were subject to review, although it was noted that their absence had little impact on the scheme and opt outs were encouraged to take the 50/50 scheme wherever possible.  In terms of the valuation process changes in staff numbers and their effects on the funding position of the Council had been discussed, given the current constraints on local government funding. The actuary had confirmed small changes in percent either way had little effect on the pension fund. A localised impact could be observable at the specific employer level, but at the fund level member opt outs would need to be significant to have any adverse effect. The re enrolment scheme was noted to serve a positive role by bring those outside of pension schemes back into the fold and bolstering the pension fund and providing individuals with valuable pension benefits.

With no further comments raised the Chair thanked John Smith and Chris Batts (LPPA) for the update and commended the progress outlined and it was RESOLVED that the report be noted.