Agenda item

1.1.        The Board considered the non-exempt items of the Pension Committee’s agenda for its 27 November meeting.

Item 10:Market analysis of Pensions Administration System

1.2.        Steve Tidy (ST), Strategic Procurement Manager, presented the Board with a market analysis of pension administration systems providers.

1.3.        Jason Bailey (JB), Lead Pensions Manager, explained that since the market analysis of pension administration systems has been completed, two of the four customers of Capita’s pension administration system were reviewing their options  for future service provision

1.4.        Bernadette Carlyle (BC), asked how the market analysis had determined customer satisfaction ratings for the four providers. ST, explained that the intelligence had been gathered by searching for publicly available product reviews from either councils using the service, or from employees. These are often testimonies published by the providers themselves, who are less likely to publish negative reviews. Pension administration systems are a niche product so there are no independent customer satisfaction surveys carried out about them. ST added that during the procurement process Orbis will be entitled to engage directly with the customers of the bidding companies to establish more accurate product satisfaction levels.

1.5.        The Chair asked for clarification about the next stage in the procurement process. ST said that the current contract with Heywood expires in August 2021, so the procurement process will need to begin by the 2nd Quarter of 2019. The contract also contains break points that could be triggered before then, although these will contain penalty clauses.

1.6.        ST said that the tendering process will be fair and transparent. However, there is no pre-existing framework that can be used to speed it up. It is, therefore, proposed that there is a restricted tendering process that contains pre-qualification answers that are likely to exclude a number of potential bidders.

1.7.        The Chair asked whether the procurement will include only the four companies identified in the market analysis. ST said that it cannot be ruled out beforehand that other companies might say they can provide the service. If this happens then their ability to provide the service will also be tested.

1.8.        The Chair asked what weighting quality will be given in the procurement process. ST said that the weighting will be in favour of quality over price and the ratio used is generally  60:40 but this can be varied. The cost of ownership burdens to the local authority of the providers’ bids will be established and included in the price, not just the upfront cost.

1.9.        Cllr Kevin Allen (KA) asked for clarification about the effect ACCESS will have on the pension administration in East Sussex. Ola Owolabi (OO), Head of Accounts and Pensions, confirmed that ACCESS will not have an effect at this stage as the pooling initiatives only relate to pension investments, not pension administration. He conceded that this is the current position and it could change in future years if the Government decided otherwise.

1.10.      The Chair said that it will be up to the Pension Committee to decide when to begin the tendering process between now and 2019. Stephen Osborn (SO) observed that there did not seem to be another provider that looked significantly better than Heywood, from the information presented in the report. ST said that pension administration is a stable and static niche market that is unlikely to have many new providers drop in to or existing providers drop out of the market.

1.11.      The Board RESOLVED to note the report.