Agenda item

Purpose of the report:

The Board is asked to note the content of this report and make recommendations if any further action is required.

Declarations of interest:

None

Witnesses:

Jason Bailey, Pensions Lead Manager, Shared Services

Neil Mason, Senior Advisor (Pension Fund), Finance

Eric Jameson, Senior Pensions Administrator

Lindsey Shaw, Workforce Information Officer

Key points raised during the discussion:

1.    The Board noted that the most significant changes in the statistics were the number of retirements, and those that had re-enrolled who had chosen to opt-out. The Board was informed that the support offer around retirement was considered exemplary in terms of advice.

2.    It was noted that the delay in providing annual benefits statements had been caused by an internal administrative issue that the Pension Service was seeking to resolve.

3.    Officers highlighted that expertise in the administration of firefighters pensions was not sufficiently widespread across the Pension Service, and that this had a potential to impact on resilience. It was noted that training was being delivered across the team to ensure these concerns were being addressed.

4.    It was noted that Orbis also provided pension administration for East Sussex Fire and Rescue Service. The Board was informed that sovereignty for the governance of each fund remained with the administering authority, though there were areas where the funds could seek to work together, for example in developing service level agreements around pension administration.

5.    The Board discussed the number of re-enrollments that subsequently opted out. It was noted that officers had concerns that members were choosing to opt out without recognising the value of the scheme benefits. The Board discussed a number of factors that influenced this, including the perceived high level of contributions and the decision by some to pursue other investment opportunities.

6.    It was noted by the Board that some union members had reported feeling concerned about the long term security of their pension benefits, given the number of changes to the scheme in recent years. It was noted that the tapered protection arrangements would come to an end in 2022. Board members questioned whether the general trends around opt-outs could be monitored and reported to the relevant national bodies.

7.    The Board discussed how communications could be tailored to explain the key benefits of the scheme to non-members. It was highlighted that the death-in-service grant would be an impactful aspect to focus on in this regard. The Board asked whether an additional section on pensions could be included on the staff intranet.

8.    The Board was informed that calculating the contribution holidays would have a significant resource implication for the Pension Service. It was noted that the guideline completion date of 31 March 2017 had no statutory basis, and must be set in the context of the requirements for the modified retained options exercise. It was commented that both exercises required additional resource, and cases were being prioritised where appropriate.

9.    The Board was informed that a similar modified retained options exercise had been conducted in East Sussex. On the basis of the response rate, the Pensions Service anticipated approximately 20% would take up the option to backdate their membership.

10.  The Board was informed that the Pension Regulator had been informed of the delay in issuing annual benefits statements, and had advised that the expectation was that all funds would meet the 31 August deadline for 2016/17 statements. It was confirmed that the annual benefit statements for 2015/16 would be issued by mid-February 2017.The Board proposed that the target date for issuing 2016/17 statements could be set as the end of July in order to give the Pensions Service a contingency buffer.

Actions/ further information to be provided:

The Board to be advised of progress in issuing the annual benefits statements for 31 July 2017.

The Board to receive an update on the completion of the contributions holidays exercise and the modified retained options exercise at its next meeting.

The Board to continue to monitor the number of members opting-out of the scheme and reasons for doing so.

Officers to update staff intranet with additional information about pensions benefits.

Resolved:

That the Board note the report.