Agenda item

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

Witnesses:

Andrew Marson, Pensions Lead Manager

Key points raised during the discussion:

1.    The Pensions Lead Manager introduced the report and ran through its highlights. He explained to the Board that improvement actions were being undertaken regarding complaints raised through the internal audit, GMP reconciliation was on track and there had been engagement with officers and Pension Fund representatives, the system review was continuing, and progress to plan was being made regarding the end of year/annual benefit statements.

2.    The Chairman highlighted that only 23 members out of approximately 37,000 were still required to produce end of year returns for active members, benefit statements had been produced for 26,818 out of the 34,700 that needed them, and just 542 queries were still outstanding at this stage. He went on to congratulate the service for their work.

3.    Referring to problems with deferred member addresses, the Pensions Lead Manager informed Members that statements would be generated for every member but that tracing agencies would be employed to help a more rigorous tracing mechanism from September 2019.

4.    Discussion turned to the key risks and issues outlined on page 82, with the Pensions Lead Manager explaining that the issue concerning the JLT checking bottleneck had been addressed but was being watched. He went on to say that 2,101 cases had been completed but that there were questions about the data quality, as 677 were unable to progress because of employer-related problems.

5.    A Member of the Board asked if there were any performance milestones for the work being done by JLT and was told by the Pensions Lead Manager that they were only paid for successfully completed cases. There was a rate to which expectations were set but this approach ensured that JLT were incentivised to complete as many cases as possible. The Pensions Lead Manager then went on to explain that completed cases that were returned with data queries were raised with employers and follow-up pieces of work went back to JLT for completion.

6.    The Pensions Lead Manager spoke about the Improvement Plan and explained to the Board that it represented a big picture view of what was happening in the service. The total work outstanding was 26,559 cases, with 10,968 of those not previously appearing in any performance figures. The oldest case involving an unidentified leaver went back to 1991 and the clearance of backlog work was generated new work requests at an approximate rate of 1 in 10 members. The vast majority of the work went back approximately 10 years and was primarily related to deferred members and refunds. The Pensions Lead Manager went on to explain that most members would contact the service when they reached retirement age, which meant they were unlikely to be sitting on a significant amount of work with a financial impact and risk. However, the service still needed to keep in mind the reputational impact and risk and make sure deadlines were met.

7.    The Chairman sought clarity on the work given to JLT and was told by the Pensions Lead Manager that this represented 3,232 cases relating to deferred members and leavers, all of which dated from before November 2018. He then explained that the figures outlined in the handout related to the total amount of work done no matter who had performed it, and for this purpose JLT was an extension of the pensions administration team.

8.    The Pensions Lead Manager went on to explain that pensions administration staff completed approximately 18,900 cases last year, which meant that there was currently over a year’s worth of work that still needed to be done. The service contained many experienced staff members but 25% were at or near retirement age and represented 45% of the service’s LGPS knowledge, so the department needed to make sure it was able to build on this knowledge and not go backwards.

9.    Speaking about data quality, the Pensions Lead Manager explained that steps forward had been made and that the service needed a dedicated focus on it, as poor data quality was one of the main reasons why the backlog had developed in the first place. Regarding assurance, he said that his view was that the service needed to strengthen the level of its expertise amongst members of staff. The Pensions Lead Manager went on to discuss the proposed approach, which consisted of fully understanding the disclosure breach position before taking a view as to whether a report to the regulator was required, as the service needed to identify what member impact there had been before moving forward. Discussion then turned to the backlog, with the Pensions Lead Manager reiterating to the Board the fact that there was over one year’s worth of work outstanding and that the contract with JLT would allow the service to generate efficiencies in-house.

10.  The Board discussed the need for greater expertise in the service and the difficulty in attracting potential members of staff with LGPS expertise. The Pension Lead Manager explained that there had been success with the trainee team that had been brought in but that staff members with senior LGPS expertise were nonetheless needed. He went on to tell the Board that part of the future exercise was to capture the knowledge of experienced members of staff who were at or near to retirement age.

11.  The Pensions Lead Manager outlined the next steps, which included getting the KPI reporting more robust. He explained that he was confident these were in the right orders of magnitude but they needed tightening up so that the Board could have more confidence in what it was being presented. He also spoke about the estimates of investment and informed Members that this had been done but needed to be independently looked at before it could be brought back to the Board.

12.  A Member of the Board asked the Pensions Lead Manager about the use of robots and was told that two had recently gone live in the pensions administration service. One took care of helpdesk enquiries and the member service whilst the other dealt with deferred to payment processing. There were also other opportunities for their future use.

Actions/further information to be provided:

None.

Resolved:

The Board noted the content of the report.