LPFA Board 21 st February 2017 Managing Director s Report PF1789, Item 3

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1 LPFA Board 21 st February 2017 Managing Director s Report PF1789, Item 3 Purpose and summary To provide the Board with a quarter summary of administration performance against the set targets, an update of activity since the Board meeting in December 2016, including an update on recent GLA meetings. Key issues Annex 1 & 2 details the administrative performance of the LPFA fund and Agency contracts in the 3 rd Quarter of A summary of the strategic programmes and projects for has been included in the report, including details of the complaints received in the 3 rd Quarter. This report includes an update on the ongoing process for implementing revised custodian arrangements for the LPFA. An update on further meetings between the Chair & Managing Director of LPFA with the new Chief of Staff at the Greater London Authority is also included. Recommendation Board is asked to: [1] Note the content of the report and its supporting annexes. Report date: 14 th February 2017 Lead Officer: Mike Allen Page 1 of 6

2 Compliance Checklist Governance issues: Board ensures that effective governance procedures are in place. The approval of the Pension Fund Annual Report is a matter reserved for the LPFA Board. The LPFA Board is also responsible for monitoring pension administration performance and the setting and monitoring of the investment strategy Equalities impact: None Financial implications: None Social, environmental, health and ethical issues: None Legal implications: LPFA retains a number of statutory and legal responsibilities for administering the Fund and it is important that these are taken into account when putting in place the new partnership arrangements. Communication issues: The Governance Team will be reviewing with the LPFA Chair and MD further documents which can be published. Risk implications: Failure to have an effective system of corporate governance and appropriate and robust reporting arrangements could have an impact on LPFA s operations and reputation. Other relevant / supporting documentation: Annex 1: LPFA Q3 KPI 2016/17 Annex 2: Agency Q3 KPI 2016/17 Freedom of Information Act 2000 ~ LPFA Publication Scheme This document appears in the Publication Scheme under: Private s22 draft Constitutional Document intended for future publication Page 2 of 6

3 1. Pension Administration performance Annex 1 outlines administrative performance of the LPFA fund for the Quarter /17. It is worth noting that the LPFA cases completed on time in for quarter 3 achieved its target of 100% and the End of Year queries were also met. Annex 2 highlights the agency reporting for Q3 2016/17 and the amount of cases completed on time for each 3 rd party transaction. Hertfordshire County Council are still experiencing high volumes of workload, especially with Auto Enrolment and Year End queries remaining very high. Seven complaints were received for LPFA in Quarter /17. The table below summarises the nature of each complaint. All responses were acknowledged and dealt within 5 working days. The Complaints register is available upon request. Additionally one case has now been notified to LPFA by the Pensions Ombudsman and details are also provided below. Nature of Complaint Delay in receiving benefits Administration error Poor Customer Service Unpaid Pension Benefit Pensions Ombudsman level of benefits payable on death N. of Complaints Upheld/no t upheld Detail of complaint 2 Upheld 1 complaint resulted in a delay in receiving benefits and failure of LPP to provide updates Delay in paying benefits to member following receipt of AVSs from Prudential. 1 Upheld Typo on the members Title 3 Upheld 2 complaints relation to timescales of dealing with the request 1 complaint resulted to miscommunication. 1 Not upheld Member complained via the Financial Ombudsman about suspension of child's pension whilst she enrolled in an online educational course, due to the fact she could not attend college. 1 Ongoing Level of benefit payable too low 2. Strategic Programmes 2016/17 The Strategic Policy Statement reflects LPFA s long-term strategy following the move into the partnership with Lancashire County Council Pension Fund (LCPF. Asset Liability and Risk Management This project is now completed and will be used for a number of key fund related and valuation issues including consolidating and improving the level of overall risk reporting to LPFA s Audit and Risk Committee around cash flows, funding levels and sensitivity to changes in risk factors. Collaboration The Special Project Team continues to deliver services in line with project timescales and is still actively seeking new opportunities. As in previous updates GMP Reconciliation continues to be the key service offering. New marketing material has been developed and will be going live on the website in the coming weeks. A number of authorities around the LGPS and Fire Schemes have expressed an interest in this work which will form an Page 3 of 6

4 integral part of the services offered by LPP in future. Work is ongoing with a number of authorities to provide additional administration services and further details are expected to be announced soon. 3. Central Register of Breaches The Pensions Regulator As of November 2016 Employer Risk Services and Finance Services have been working together to implement appropriate controls and procedures regarding the late payment of employer contributions and the non-payment of deficit contributions. In October 2016, an employer newsletter was sent out to all employers in the Fund detailing the responsibilities employers have under COP14; this supplements an employer newsletter published in September 2016 on COP14 that is publicly available on LPFA s website. LPFA also hosted an Employer Forum in November 2016 where a presentation was made to employers on the importance of compliance with The Pensions Regulator requirements and how this will affect their responsibilities as employers in the Fund. At the time of writing, no material breaches have been reported to the Regulator. However, there have been a number of employers that have been characterised as breaches since the Financial year which are recorded in LPFA Risk Register. Substantial measures have been taken to implement appropriate controls and systems to monitor late employer contributions and non-payment of deficit contributions. However, this is still an on-going process as we continue to work with employers to educate them regarding their responsibilities to the fund. Further information regarding this project can be made available on request. 4. Data Protection Act and Information Security incidents review During the period October - December 2016/17 three data protection breaches have been reported. The data breaches were mainly due to human error which resulted in incorrect statements/documents being sent to other members of the pension scheme. All of the data breaches were reported to the Data Protection Officer and investigated for further clarification. The LPP on behalf of the LPFA sent apology letters to all of the members who reported the incidents in all cases. No data breaches were reported to the ICO. Staff have been reminded of the sensitivities around handling personal data and the LPP Governance Team are looking to roll out the following improvements: LPP specific guidance to staff on how to present a breach Implement use of white boards Raise awareness at Monthly Business Meetings (MBM) of Data Breaches and the 2018 DPA requirements Consider the appointment of a dedicated resource or Information Governance Executive to be a professional dedicated to Data Protection and FOIs Appoint an owner for the Data Protection Project Liaise with HR and Training to assess how soon after joining is it that staff receive training Include a new key performance indicator to highlight how many new starters receive data protection training within first week of starting. Liaise with the pensions function to assess whether more information could be sent out to mitigate the risk of identity theft Develop an internal communications plan around actual data protection examples. Page 4 of 6

5 ISO incidents The table below shows incidents against the ISO (Information Management) accreditation. The standard covers all aspects of data management and is wider in scope than pure data protection incidents. Please note the Data Protection breaches highlighted below include, LPP. The LPP has issued a letter of intent to BSI Group and will commence with the ISO accreditation programme in June Custodian Arrangements Following discussions and updates provided previously, a recommendation with accompanying summary report to award a new contract for these services has been made. Bidders will now be notified so that the standstill period can commence prior to formal award of the contract. 6. Meetings with the GLA and new Mayor s Chief of Staff The Chair of LPFA Board and Managing Director continue to hold regular meetings with the GLA to further our discussions around a number of key issues including the following: Pooling Proposals Discussions continue with the Minister for Communities and Local Government around our current pooling arrangements with Lancashire CC as well as future proposals, and GLA are kept updated accordingly. Divestment & Environmental issues discussions around the GLA and LPFA approach to managing the potential long term risks associated with such investments have continued with a view to implementing a formal policy on this important issue shortly. Page 5 of 6

6 Strategic Policy Statement and Medium Term Financial Plan These documents are currently being discussed and finalised and will be published in due course on the LPFA website. Page 6 of 6