Contact: Nick Weaver, (01962) 847587 email: [email protected]

1 Summary

1.1 The Local Government Pension Scheme (Administration) Regulations 2008 allow administering authorities to prepare a pension administration strategy in relation to its administering authority responsibilities.

1.2 This strategy is not compulsory, but where one is produced it must be published and regularly reviewed. In preparing or reviewing this strategy, the administering authority needs to consult employers and other bodies as it considers appropriate.

1.3 The administration strategy focuses on ways in which the administering authority liaises with employers and its performance against defined service standards.

1.4 Pensions Services has made improvements in the way it communicates with employers. These new processes fulfil the requirements of a strategy.

1.5 Although significant improvements have been made in delivery against service standards, further progress is required prior to inclusion in an administration strategy.

2 Recommendation

That an administration strategy is not produced immediately and that an update report is provided to the Panel's meeting in November 2008.

3 Pension administration strategy

3.1 The new Local Government Pension Scheme (LGPS) regulations allow administering authorities to prepare a written statement of the authority's policies in relation to any or all of the following:

· procedures for liaison and communication with employing authorities

· establishment of levels of performance for both the administering and employing authorities

· procedures to ensure compliance with statutory requirements

· the circumstances in which employing authorities may be charged for extra costs arising because of the employing authority's performance

· publication of annual reports detailing performance

· any other issues considered appropriate

3.2 Although there is no statutory requirement to produce a pension administration strategy, where one is produced the following applies:

· the strategy needs to be kept under review and revisions made if there are material changes in any of the policies covered by the strategy.

· employing authorities, and other persons that the administering authority considers appropriate, must be consulted when preparing and revising the strategy.

· the strategy needs to be published, with copies sent to employing authorities and to the Secretary of State.

3.3 The administration strategy focuses on working with employing authorities and performance against defined service standards.

4 Current pension administration

4.1 Pensions Services is responsible for the administration of the LGPS. The section underwent a review in 2005, the outcome of which was to establish principles for administration:

· employee data is owned by the employer

· consistent processes for all employers

· data checks made at point of entry, other checking according to risk

· technology used to enable processes where appropriate

4.2 An organisational structure to support these principles was put in place from October 2006 and progress has been made on other recommended improvements.

4.3 Two areas which have already been implemented are:

· improved employer communications (through the creation of a dedicated team)

· the simplification and prioritisation of operational workloads.

5 Employer liaison and communication

5.1 Pensions Services has improved external communications with employers and members. The Axise Employer module (allowing employers to view and update member data via secure internet access) has been rolled out and now covers over 70% of non Hampshire County Council membership.

5.2 Existing employer liaison has been enhanced through the creation of a dedicated communications team. This has allowed successful communication of the new scheme changes at road show events across the county. In addition, employers receive regular electronic newsletters containing the latest updates.

5.3 Pensions Services has also made changes to improve communication with members, including updated documentation and member presentations. A First Level Support Team provides the initial point of contact for all members, for both incoming telephone and email queries, resulting in much improved customer service.

5.4 These improvements could be formalised and address this key part of an administration strategy.

6 Service standards

6.1 Pensions Services participated in the 2007 Institute of Public Finance (IPF) pensions administration benchmarking survey which compares membership, cost and performance. The results were published in August 2007.

6.2 The graph below shows our cost per member of £13 is the second lowest of those who participated. (Hampshire is the black bar). The average cost per member is £23. (It is understood Cornwall is the fund with the lowest cost).

6.3 This result in is line with the 2005 and 2003 IPF result.

6.4 For the first time, in 2007, IPF started to measure performance against the Local Government Pensions Committee (LGPC) nationally set standards:

· Transfer In Quote - 10 days

· Transfer Out Quote - 10 days

· Process Refund and Issue Payment Instruction - 5 days

· Letter Estimating Retirement Benefit - 10 days

· Letter Notifying Actual Benefit - 5 days

· Letter Acknowledging Death of Member - 5 days

· Letter Notifying Dependent's Benefits - 5 days

· Calculate and Notify Deferred Benefits - 10 days

6.5 These national standards should form the basis of the performance measures contained in the administration strategy.

6.6 Pensions Services have assessed their current performance against these standards and have identified the improvements needed to achieve them.

6.7 Once these improvements have been made, the standards can form the basis of the performance measures included in the administration strategy.

Section 100D - Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have been relied upon to a material extent in the preparation of this report.

NB: The list excludes:

None.