Agenda item

The Head of Pensions provided an update on the Pension Fund Business Plan and advised that the contract for the investment advisory service had been awarded to the incumbent strategic advisor effective from 9 December.

The Board’s attention was drawn to section 4.9 of the report and the reconciliation required for scheme members’ contracted out liability against that held by HMRC. There had been a considerable delay as HMRC had not provided the information. This had delayed the rectification stage. 1,841 variance cases had been identified and 997 of these cases needed to be reviewed in order to determine whether an underpayment or overpayment of an individual’s pension had been made. Any overpayments would be written off in line with the Fund’s Overpayment of Pension Policy but underpayments would be paid over the next year.

Julie Petrie enquired whether performance standards had been considered when appointing the investment advisor. The Head of Pensions advised that this was always considered when procurement was undertaken.

Further to an enquiry, the Head of Pensions advised that Altair was the main system used in local government. The transition process for a new system would take a year.

Alicia Bruce queried whether the overpayments would need to be considered by the Pension Committee. The Head of Pensions advised that it was his understanding that they would not as this was covered in the Overpayment of Pension Policy but this would be confirmed. It was expected that some of the overpayments would be small.

Work was ongoing in preparation for the application of the McCloud age discrimination remedy and scheme employers were gathering the data that was required. Some of the main providers were yet to provide the data. A bill was currently going through parliament which was likely to create a second set of regulations. The new age discrimination regulatory changes were likely to be effective from October 2023, so this would provide more time to get the data prepared.

The Head of Pensions referred to the increase in undecided leaver records that necessitated additional recruitment to be undertaken. There would not be a situation where there would be no cases over six months old because data had to be sought. However progress was being made and monthly meetings were held including all parties within the service area. There were 150,000 members in the scheme. As highlighted at the last meeting, schools changed contracts frequently, which caused a systematic issue.

It was noted that staff had moved internally and the establishment in the retirements team had been increased to allow for greater flexibility. There had been a slight underspend in staff related costs.

The Board discussed the ongoing issues regarding Prudential. The Governance & Regulations Manager advised that there were delays in providing the information for inclusion in the Fund’s Statement of Accounts and benefit statements to members. and this had been raised with Prudential. The Local Government Association and the Pensions Ombudsman were aware of the problems.

With regard to the resource levels, the Head of Pensions highlighted that the level in the majority of teams was now right. There had been an isolated problem but this had been in an area of lower priority work. It was believed that the resources in place would be sufficient for the valuation work in the next year and there was also a reliance on the Fund Actuary to undertake that process.

RESOLVED:  That the Local Pension Board noted the Business Plan Update to                    31 December 2021.