Agenda item

Purpose of the report:

To outline the Surrey Pension Fund’s Key Performance Indicators, covering investment and administration practices. This paper also includes an update on administration issues.

Witnesses:

Neil Mason, Senior Advisor (Pension Fund)

Alex Moylan, Senior Accountant

Jason Bailey, Pension Services Manager

Key points raised during the discussion:

1.    Officers outlined the areas requiring improvement in relation to the Key Performance Indicators (KPIs) and actions taken to address these. It was highlighted that:

·         Changes as result of the 2014 scheme and the complexity of administering these had impacted adversely on the performance of Pension Services.

·         General awareness of pensions had increased amongst members, and Pension Services had seen an increase in the number of enquiries it received.

·         Pension Services had expanded to take on the pension administration for the London Boroughs of Hammersmith and Fulham and Hillingdon and the Royal Borough of Kensington and Chelsea. This had created additional resource implications during transfer and implementation.

2.    The Board was informed that the following actions had been taken in regard to the above:

·         Pension Services had been restructured, creating two posts with a specific focus on improving performance and reviewing operational processes.

·         Negotiations with the software provider had introduced a number of new functions to the pensions systems, enabling additional savings to be realised while improving performance in relation to pension administration.

·         Additional staff had been recruited in light of the additional resource implications created by the tri-annual assessment.

Officers stated that they expected to see improvements in performance by quarter two of 2016/17.

3.    The Board commented that previous discussions had highlighted additional demand was created due to a number of retirements within the Pension Service. A question was raised as to whether the restructure had sought to improve resilience in the team. Officers commented that the restructure had dissolved the specialised benefits team, and instead created four operational teams. This had the advantage of enabling all staff to train up and deal with benefits queries. It was confirmed that there was a training plan in place for the year ahead to support this.

4.    The Board was informed that a dedicated pensions help-desk had been operational since February 2016, it was highlighted by officers that this had provided management data and given better intelligence on the type of queries coming to Pension Services. The Board was told that 70% of these queries had been dealt with during the first contact, and that this was positive performance for a newly established helpdesk.

5.    The Board discussed how the Pension Service provided services to employers. Officers commented that a dedicated employer portal was being established, and this would enable improved processes around data input. It was recognised by officers that the communications with employers needed improvement, and the Board was informed that the Pension Service would be meeting with district and boroughs to discuss their changing needs in light of the current financial pressures faced by all local authorities

6.    The Board highlighted the performance figures related to the provision of benefit statements, and commented that this was an area of concern given the statutory obligations in this regard. Officers explained that changes to the scheme in 2014 had created additional data requirements on all administering authorities and employers. To this end, the Pension Regulator had acknowledged the additional challenge for all administering authorities in 2014/15 and agreed to take no further action. The Pension Regulator had set a clear expectation that the target of 100% of annual benefit statements issued to members by September was attained by all administering authorities in 2015/2016. The Board was informed that Pension Services anticipated that this would be achieved, and highlighted that employers were being required to make submissions for the tri-annual valuation by June 2016. The progress of this would give a clear indication as to whether the statements would be issued in accordance with the statutory requirements. The Board requested an update on this to the next meeting.

7.    The Board discussed the 98% target for contributions to be received by 21^st day of the ensuing period. Officers clarified that it was the responsibility of employers to collect and pass on contributions, and that there were sometimes delays in doing so. The Board was informed that this was not consistently one employer, and actions were taken to raise it with employers when it occurred. The Chairman highlighted the statutory requirement to receive all contributions within the 21 days and asked that the bench-mark be raised to 100% reflect that. The Board asked that any failure to achieve that bench-mark was reported, with additional narrative where it was believed to be of material consequence.

8.    The Board expressed concerns that the Pension Service was seeing a detrimental impact on performance as result of taking on additional local authority administering authority clients. It recognised that that there was action being undertaken to address these issues, but also commented that appropriate analysis should be conducted prior to further expansion in order to understand any likely impact on performance. The Chairman proposed to write to the Cabinet Member for Business Services and Resident Experience and Chief Finance Officer putting forward the Board’s comments.

Resolved:

·         That the Chairman write to the Cabinet Member for Business Services and Resident Experience to encourage greater impact analysis prior to any agreement to provide pension administration services to other administrating authorities.

Recommendation:

·         That the contributions received benchmark to be adjusted to 100% in line with the statutory requirements.

Actions/further information to be provided:

·         Pension Services to circulate its action plan and timescales for improvement in relation to the issues outlined above to Board members.

·         An update on the progress of employer data submissions in relation to the tri-annual valuation and the issuing of annual pension benefit statements to be brought to the next Board meeting.