Issue - meetings

51.1     The Committee considered a report providing an update on matters relating to Pensions Administration activities.

51.2     The Committee RESOLVED to

1) note the report; and

2) request confirmation via email whether the 258 outstanding employees have now received their Annual Benefit Statements.

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25.       

25.1.      The Board considered an update on matters relating to pension administration.

25.2.      The Chair asked whether officers were confident that the discrepancy between the figures of 22,901 active members as of 31 March 2019 and the 21,316 ABS issued on 31 August was not evidence of a further breach.

25.3.      AM said he was confident that this discrepancy was due to the number of active members joining, leaving or retiring, and the fact that the number of active members will always include a certain number of new employees who are not entitled to an ABS until more than one year’s service.  He also said that people who leave after 31 March are not sent both a leavers’ statement and ABS, even though they technically are entitled to an ABS, as this would be confusing. This was recognised practice by the Pensions Regulator. AM explained that the Working Group would be developing the ABS process so that in future years the Pensions Administration Team would be able to produce a breakdown of the discrepancy between the two figures.

25.4.      AM explained that the liabilities to the ESPF as a result of Guaranteed Minimum Pension (GMP) Reconciliation programme would be known in the next few weeks, subject to confirmation from HM Revenue & Custom (HMRC). The next stage would be the reconciliation phase involving engagement with members and employers to deal with instances of arrears and overpayments. This would require informing employers about the process as employees are likely to contact them in the first instance.

25.5.      SO asked how large the liabilities are likely to be and who would need to plug any shortfall.

25.6.      The Chair of the Pension Committee said that Hymans Robertson estimated an average of 1% of the value across the LGPS funds, which they had not considered a material difference. The Chair explained that if pensioners had been overpaid then they will need to fund the shortfall in contributions.

25.7.      LW suggested that a lot of communications work would be needed if pensioners find out they are going to be receiving less income. Employers and the Fund are going to need to be clear about the advice and information they give to scheme members. AM agreed that member engagement was crucial as there is a risk of reputational damage.

25.8.      The Board RESOLVED to:

1) note the report; and

2) request that future administration reports include the number of members listed as unconfirmed leavers in “Status 2”, including the number who have come on and off of this status and, if possible, a breakdown by employers, and by how long the members have been in this status