Agenda item

25.       

26.       

27.       

28.       

29.       

29.1.      The Board considered an update on matters relating to Pension Administration Team (PAT) activities.

29.2.      Nick Weaver (NW) verbally updated the Board on the Annual Benefit Statement (ABS) process. He explained that the PAT had used ITM to trace the 7,500 deferred ESPF members that the PAT had lost contact with. He confirmed that 6,500 had been tracked down with 990 still outstanding, which is in line with the numbers missing in other Orbis administered pension funds.

29.3.      The Chair congratulated the PAT on the low error rate of the statements, given most errors were due to “gone away (supressed)”, and the high number of ABS produced compared to the number of active members. He noted the number of breaches outside of casual workers and four employers who had not provided end of year returns amounted to only 0.4%.

29.4.      NW explained that a huge amount of work undertaken by the Data Improvement Programme (DIP) had improved the quality of data held by the Fund. He added that a few employers still needed to improve their performance as they had not provided details of all their employees by the end of the year, despite repeated chasing. He added a very small number of new employers had been missed and it was clear a policy was needed to deal with the 130 people who are on casual contracts and who did not have pensionable service in the Fund during 2019/20.

29.5.      SO said performance this year felt like a big step change and he congratulated all involved. He noted some ABS had still not been sent out and asked if that meant the Fund was in breach of the regulations and would need to report itself to the Pensions Regulator (tPR).

29.6.      MK confirmed that tPR would be notified next week of the breach, but the letter will emphasise that in the view of Officers it does not constitute a material breach and will set out the work undertaken to improve performance including the DIP, address chasing of deferred members, and liaising with employers. It will also appear in the Fund’s breaches log but with a proposed RAG rating of green.

29.7.      The Chair asked whether mortality screening and address chasing would happen every year.

29.8.      NW said that it doesn’t, but recommended the practice is kept up on an annual basis, as people leave all the time and often deferred members stop contacting the administering authority as soon as they leave.  He added that the mortality screening was not undertaken on the known membership, only those listed as deferred and missing, and suggested it should be undertaken intermittently on the whole ESPF membership. MK confirmed that the work by ITM was a one off and future work would need to be commissioned if it was to happen again.

29.9.      The Chair asked whether there were any mitigating factors, such as the Covid-19 pandemic, that might explain why any of the four employers failed to provide full End of Year returns. 

29.10.   MK explained that one employer had gone through a number of mergers in recent years resulting in some records of employees being lost.  This would require a referral to tPR due to the number of lost records and inability to reconstruct them. There had been issues receiving returns from another employer in previous years too, so performance this year could not be explained by Covid-19. The other two employers were small and this year was the first occurrence. NW added that all employers had been made aware of the 30 April deadline for end of year returns and had been chased by the PAT. IG said that employers had also been offered assistance by the PAT.

29.11.   IC clarified that the Fund can recharge an employer to recover the excess costs incurred by the Fund as a result of an employer’s actions, but that it could not levy a fine.  MK added that the Fund is undertaking work on employers who are at risk financially due to Covid-19 and would recommend not applying a recharge to any of them at this stage, however, reporting to tPR would be appropriate.

29.12.   The Chair asked the Board for its views on what course of action should be taken in relation to the four employers who failed to provide full end of year returns to the Fund.

29.13.   The Board RESOLVED to:

1) note the report;

2) recommend that the four employers who failed to provide full end of year returns for the ABS are reported to the Pensions Regulator;

3) recommend that the four employers are written to informing them that they have been reported for not fulfilling their legal obligations in relation to the Fund; explain that the Administering Authority has the power to recharge them for costs incurred; and say that they may be recharged in future if they fail to provide full end of year returns; and

4) request confirmation by email the reason why the KPI: Employer estimates provided was only 49% during July 2020.