Issue - meetings

52.1     The Committee considered a report providing an overview of the Data Improvement Programme and Annual Benefit Statement (ABS) working group.

52.2     The Committee RESOLVED to:

1) note the report;

2) approve the appointment of Hymans Robertson to undertake the Data Improvement Programme; and

3) recommend that the Service Level Agreement for the ESPF includes the preferred specifications for a pension administration system.

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24.1.      The Board considered a report and a presentation by Hymans Robertson on the Data Improvement Programme and the Annual Benefit Statement (ABS) Working Group established to oversee it. Ian Colvin, Pete Riedel and Susan McKenzie attended from Hymans Robertson.

24.2.      MK explained that that it is proposed that the Working Group will be made up of Officers, Pension Board members, if the Board agree, and Hymans Robertson representatives. The Pension Committee is being recommended to agree to establish it based on its terms of reference and cost. She was looking for the Board to nominate its members to join the Working Group.

24.3.      LW asked whether the data improvement programme would be a one off. MK explained that the outcome of the working group would be reported to the Pension Committee in June and that the quality of data would be reviewed from time to time after then and reported to the Committee.

24.4.      The Chair asked whether the requirements of the Data Improvement Programme to have employers provide monthly data on their employees to the administering authority would be asking too much of small employers. 

24.5.      MK said that the plan was for a consistent process across all employers but that individual circumstances would be taken on board.

24.6.      The Chair asked what percentage of Local Government Pension Scheme (LGPS) have had problems with their ABS as a result of data issues.

24.7.      Ian Colvin (IC) said that during the first year after the introduction of the career average earnings pension there were a number of breaches of the ABS deadline, due to the increased complexity of the new system. Internal processes have improved since then, but it is still an issue for many LGPS.

24.8.      The Chair asked whether there were a wide variety of payroll systems used by ESPFs’ employers.

24.9.      IC said most larger employers used the big payroll systems such as SAPP or Oracle, but some smaller employers may only use an Excel spreadsheet. There was a wider issue that many employers outsource their payroll to an external company but do not include pension administration within the contract, and many payroll providers do not have the ability to undertake pension administration even when asked.

24.10.   The Chair asked whether the Fund should work with employers and payroll providers in that case.

24.11.   IC said Hymans Robertson is working nationally with payroll providers to encourage their understanding of LGPS pensions management, but employers are the responsible organisations the Fund should deal with. MK added it would be advisable to liaise with both.

24.12.   The Chair of the Pension Committee said it was likely that most employers’ payroll errors would be caused by failing to update an employee’s pay, meaning their pension contribution rates would be too low. He asked whether this meant there was a risk that the actuary was overestimating the funding level during the valuation of the Fund and that when the data was cleansed  ...  view the full minutes text for item 24