Issue - meetings

Purpose of the report: This report is a summary of administration and governance issues reviewed by the Local Pension Board at its meeting of 17 January 2019 that need to be brought to the attention of the Pension Fund Committee.

Declarations of interest:

None

Witnesses:

Graham Ellwood, Vice-Chairman, Local Pension Board

Neil Mason, Head of Pensions

Key points raised during the discussion:

1. The Committee received a summary of key highlights from the Local Pension Board Vice-Chairman from its meeting of 17 January 2019.

2. It was noted that serious administration errors had been identified and that a four year strategic plan had now been put in place.

3. The Committee were reminded that the Assistant Director for Business Operations had responsibility for the administration of pensions and that he was working with the Surrey Pension Fund to resolve the identified issues. 

4. The Committee raised concerns that the data quality administration errors could have a financial impact and were informed that the Head of Pensions was not aware of an impact on the Pension Fund, but that the Fund had lodged a query with the Fund actuary, who will be able to provide clarity going forward with their assumptions.

5. Members of the Committee queried how the profound weaknesses had not been detected sooner and were informed that the establishment of the Local Pension Board had been a key factor in identifying these working alongside Internal Audit.

6. It was requested that a detailed report be presented to the June meeting of the Surrey Pension Fund.

Actions/ further information to be provided:

A report with further detail on the identified issues be presented to the next meeting of the Surrey Pension Fund Committee in June 2019.

Resolved:

That the Pension Fund Committee;

1.     Noted the report and particularly issues with pensions administration.

2.     Approved the following changes to the Fund risk register:

·        Amendments to the following risks, chiefly to reflect updates in regards to Border to Coast:

·        1-2, 4-8, 11, 13-15, 17-20, 23-24, 27.

The addition of the following risks:

·        Transition of assets to BCPP be included as risk number 29, with a total risk of 40 (Red) and net risk of 10 (Green).

·        The HM Treasury and Scheme Advisory Board cost management process has an implied increase in employer contributions be included as risk number 30, with a total risk of 28 (Amber) and net risk of 7 (Green).

·        Impact of the Pension Services Manager leaving the council be included as risk of 31, with total inherent risk of 21 (Amber) and Residual risk of 7 (Green).

·        Failure to deliver accurate and effective pension administration be included as risk of 32, with total inherent risk of 36 (Red) and Residual risk of 18 (Amber).

3.     Concluded that a detailed report from the Local Pension Board be presented at the next meeting of the Surrey Pension Fund Committee in June 2019.

Purpose of the report: This report is a summary of administration and governance issues reviewed by the Local Pension Board at its meeting of 23 October 2018 that need to be brought to the attention of the Pension Fund Committee.

Declarations of interest:

None

Witnesses:

Nick Harrison, Chairman, Local Pension Board

Michael Mann, Pensions Lead Manager

Key points raised during the discussion:

1. The Committee received a summary of key highlights from the Local Pension Board Chairman from its meeting of 23 October 2018.

2. It was noted that the Pensions AGM scheduled on 23 November 2018 would be a good opportunity to remind employers of the discretions exercise.

3. The Pensions Lead Manager acknowledged concerns regarding the poor performance against the key performance indicators and assured the Committee that the service would improve with the recently recruited nine new starters in place.

4. It was noted that the Pension Administration team were working towards tackling missing addresses for members of the Fund and were writing to National Insurance to recover them.

5. The Committee raised concerns with the 37% non-compliance in relation to annual benefit statement and requested the Pensions Lead Manager to provide further data on this issue.

6. There was a discussion around guaranteed minimum pension (GMP) and the Pensions Lead Manager agreed to consider gender equalisation going forward and clarifying whether the GMP exercise included transfers.

Actions/ further information to be provided:

The Pension Lead Manager to provide more information on non-compliance statistics with annual benefit statements.

The Pension Lead Manager to clarify whether GMP exercise includes transfer members.

Resolved:

The Pension Fund Committee;

a)    Approved the recommendations from the Local Pension Board.

b)    Concluded there was no reviews as to the compliance of particular cases, projects or processes that the Local Pension Fund Board should undertake.

c)    Endorsed requesting a legal opinion on the ramifications of recovering overpaid guaranteed minimum pensions (GMPs).

Approved the addition of a risk for interim / replacement Section 151 Officer, with a moderate risk score of 8 (due to the number of experienced supporting officers in the Finance Management Team).