Agenda item

Report of the Director of People Services.

4.1       Lee Witham (Director of People Services) introduced the report and informed Members that there had been major areas of concern regarding performance in pension administration matters in 2016. Principally, this was due to issues relating to the payroll provider, BT, and this had also affected Surrey County Council’s (SCC) performance, who carried out the administration of the pension scheme on behalf of the City Council. The pension administration performance had also been raised as a major issue of concern at the Pensions Annual General Meeting in 2016.

4.2       Lee Witham advised that in order to address this issue, an Improvement Programme had been put in place and there had been significant progress in the last two years. Most of the key performance indicators (KPIs) were now rated green and there had been little concern raised about pension administration performance at the last Pensions Annual General Meeting on 12 April 2018. Lee Witham also advised that the position of Pension Manager at SCC was currently vacant, however it was anticipated that this position would be filled by October.

4.3       During Members’ discussions, comments were sought as to the overall present situation with regard to pension administration performance. Members sought assurances that an issue identified in respect of the May payroll where BT had over deducted pensions contributions had now been resolved and what timescales were involved in confirming the existence of overseas based pensioners. In noting that Western Union were involved in obtaining information concerning overseas pensions, assurances were sought that the relevant data protection measures were in place. In respect of payroll responsibilities being transferred from BT to Hampshire County Council (HCC), Members asked what steps were being taken to ensure that the problems encountered in 2016, after BT had assumed payroll functions, would not be repeated. In respect of quality of data, it was queried whether staff were required to provide proof of date of birth upon appointment. Members also asked that they be kept informed about matters relating to the transfer of payroll functions to HCC and also in respect of the appointment of a new Pensions Manager at SCC.

4.4       The Chairman referred to a training session run by Barnett Waddingham that Members had attended where the importance of ensuring the quality of data had been highlighted, particularly because it could impact upon matters such as the triennial evaluation. Although Barnett Waddingham had stated that the quality of data for the Westminster Fund was sound, the Chairman asked if there were any plans for a data cleanse or other measures to ensure the quality of data was even better. The Chairman also sought further details as to the issues that made calculating pensions for school staff more complex.

4.5       In reply to the issues raised by Members, Lee Witham advised that the pension administration service was now stable and work had been undertaken to ensure that the KPIs used would record scheme members’ experiences accurately. He confirmed that deducted pensions contributions identified in the May payroll had now been addressed. In respect of the handover to HCC for payroll services, Lee Witham stated that lessons had been learnt from when BT had assumed this role and the HCC system had been up and running for some time now and handled around 50,000 staff. Members heard that Oxfordshire County Council had recently joined under the HCC payroll system and things had started well. Lee Witham added that the advantage of going with HCC was that they had a system in place that was proven, although it was inevitable that a few issues may arise during the course of a transition. The Committee noted that staff were required to provide proof of date of birth during the appointment process.

4.6       Sarah Hay (Senior Pensions and Payroll Adviser) advised that in respect of information on overseas based pensioners, an update could be provided at the next meeting. She advised that the issues relating to BT had more impact on the Fund than other matters. In respect of school staff, Sarah Hay advised that calculating pensions could be complicated by matters such as term times and changes to hours of employment.

4.7       Phil Triggs (Tri-Borough Director of Treasury and Pensions) advised that the City Council had a good track record in terms of pension fund data quality. The Chairman then commented that a data cleanse was probably not necessary.

4.8       The Chairman requested that the Committee be kept updated on transfer of payroll responsibilities to HCC, including continuing to receive the monthly pension updates so Members could monitor for any data quality issues.