Agenda item

4.1      Sarah Hay, Pensions Officer People Services, introduced the report noting that there was no general administration update for Members due to the Committee’s previous update having been received only a month prior; instead, the report focussed on the wider Pension Administration Strategy (PAS). It was highlighted that officers had undertaken a significant amount of work since administration of the fund had moved to Hampshire Pension Services (HPS) in November 2021. It was noted that the PAS was last updated upon the move to HPS, at which time fines for instances where employers failed to supply data within agreed timeframes were introduced. Officers had revised and updated the PAS, including the prospective fines that could be issued to employers for the slow issuance of data, a draft of which was attached to the officer’s report. The Committee were asked to consider the updated PAS and agree to officers consulting with the employers on the new PAS, with a view to having it take effect from April 2024.

4.2      Officers highlighted that the primary updates to the proposed PAS were increases in related charges. Under the current PAS, there was a standard £50 non-compliance charge when employers did not provide leaver or starter information in a timely manner, under the new PAS, this would increase to £100. Additionally, for retirements and leavers where the member was immediately entitled to payment of their benefits, the PAS charge would be increased to £250. Officers also noted that they spent a significant amount of time engaging with employers regarding inaccurate remittance data, it was highlighted that, where these issues were repeatedly emerging with individual employers, a £500 charge was proposed.

4.3      Officers drew Members attention to the HPS Employer Benchmarking System scores for the Fund’s employers, detailed within the officer’s report. It was noted that there had been a marked improvement between 2022 and 2023 with the number of employers showing major data quality issues, with 18 in 2022 falling to 10 in 2023. Although this showed a positive trend, officers highlighted that the revision of the potential PAS non-compliance charges was attributed to the need to ensure employers were providing good quality data in a timely manner which would mitigate the incidence of incurring additional costs to the Fund.

4.4      Members noted that they were generally happy with the updated PAS and supported officers consulting with the employers on the revised Strategy ahead of the prospective April 2024 implementation date. The Committee sought clarity on how the revised charges compared to other fund’s non-compliance charges. Officers noted that they had not extensively analysed the charges imposed by other funds but highlighted that the Royal Borough of Kensington and Chelsea charged a flat £50 non-compliance fee. It was clarified that, although the charges were deemed not to be significant considering the impact felt to the fund by absent and delayed data, the charges were to act as a deterrent to employers which would promote the issuance of quality data, minimise delays in receiving the required data and prompt employers to engage.

4.5      Members were supportive of the new PAS charges, although sought confirmation from officers that there would be some level of reasonableness, flexibility and cooperation should an employer be in a difficult position. Officers confirmed that there was support available from officers in helping employers resolve their data issues, and that there was flexibility with the administering of PAS charges, highlighting an example whereby an agreement had been made with a school in which the school had initially been charged for a lack of response in providing joiners and leavers information. It had been agreed that, as an incentive to improve their data quality and timeliness, the school would receive 50% of the charged money back if they managed to provide on time and quality data the following year. This was seen as an example of PAS charges working in terms of engaging employers, in addition to officers’ regular reminders and the support offered to employers.

RESOLVED:

4.6      That the Pension Fund Committee noted the draft revised Pension Administration Strategy and agreed for the revised PAS to go out to consultation with the Fund’s employers.