Pensions Update. Jan - Mar Contents

Transcription

1 Pensions Update Jan - Mar 2019 Contents Year End 2018/ LGPS Valuations New Fair Deal Consultation Discussion regarding cost cap Amendment Regulations Auto Enrolment Employer contributions due to the LPFA Fund LPFA Practitioner's Conference 2019 Engagement update

2 Disclaimer This document has been prepared in order to provide the intended recipient with data and information regarding Local Pensions Partnership Ltd and its respective affiliates, subsidiaries and partners (together the LPP Group ), subject to the following disclaimer. The document and its content is intended for its recipients and no other individual or entity may access, rely, or make decisions based on it or its contents and this disclaimer is repeated fully in respect of any such third party. This document includes information that may contain forward-looking statements with respect to certain plans and current goals and expectations relating to LPP Group s future financial condition, performance results, strategic initiatives and objectives. It may also include information on projections or opinions, which will be current as at the date expressed. By their nature, all forward-looking statements, projections and opinions are inherently predictive and speculative and involve known and unknown risk and uncertainty as they relate to future events and circumstances, which you hereby acknowledge and agree are beyond LPP Group s control. The LPP Group members do not provide advice on legal, taxation or investment matters and this document, its contents and any statements (whether oral or written or in any electronic form) made by any member of the LPP Group pursuant or in relation thereto shall not be relied upon for any such or other purpose, including (but not limited to) any investment decisions. Without limitation to the aforesaid, you hereby acknowledge and agree that this document and its content are provided as is without any representation or warranty (expressed or implied), and accordingly no member of the LPP Group or any of their respective employees, officers and directors shall be held liable howsoever as to the appropriateness, accuracy or completeness of the document or any of its contents. 2

3 Year End 2018/2019 We are fast approaching that time of year where we are asking employers to start thinking about Year End and familiarising themselves with the process. We will contact all employers shortly requesting any updates to their contact details. This is important as it will mean that all correspondence for Year End will be accurate. Please respond to this as quickly as possible to allow us time to update our records. Following on from this we will then you with a Preview Template which you can use to familiarise yourself with our requirements. The final Template for Year End will be uploaded to for all employers. It is important that you DO NOT use the version that is ed to you as it will error and doesn t contain all the relevant details. Please DO NOT use last years template as this too will be out of date and will cause additional queries/errors for you. Things to remember: Have you have responded to our correspondence and updated your contact details? If you have changed contact details since last year and haven t informed us please contact us separately at londondata@localpensionspartnership.org.uk Have you changed payroll providers? If so, please ensure we are aware of this and that the figures you supply are for the full year where possible. Payroll numbers. Have these changed since last year? If so informing us early and supplying a list will greatly reduce your queries and speed up the entire process. DO NOT use the Preview Template or 2017/2018 Template for the Final Year End submission and only use the version which you have retrieved from The deadlines for this year are: 30 April 2019 Scheme Employers final date for submitting End of Year returns. Employers can respond to queries as soon as they upload their file as well as checking regularly for additional queries that may have been added. 31 May 2019 Scheme Employers to respond to queries raised on and continue to check for additional queries. 30 June 2019 LPP to make amendments and corrections based upon employers queries, ready for submission of data to Fund Actuary in July. 31 August 2019 LPP to produce all Annual Benefit Statements. Should you have any queries or concerns regarding your Year End submission please contact us at londondata@localpensionspartnership.org.uk and we will be happy to help. The Data Management Team LPP 3

4 2019 LGPS Valuations LGPS valuations are due to take place at 31 March 2019 for all funds in England & Wales. The triennial valuation will set the contribution rates to operate for the three-year period from 1 April As always, the key to a successful valuation is high quality data and it is therefore vital that you, as employers, are currently working to resolve any outstanding data queries, including missing leavers and joiners over the coming months. It is highly recommended that you submit a February 2019 monthly return, as this should pick up any new joiners/leavers which are missing from our systems. This will then reduce the number of initial queries that will be raised from your end of year return. Annual end of year returns need to be submitted as soon as possible after the March 2019 payrolls have been run (but no later than 19th April 2019). This will enable maximum time for both the returns to be processed, and resulting queries to be resolved, prior to valuation submission dates. If the fund actuary has concerns on the data quality and has to make assumptions, that is likely to lead to higher levels of employer contributions compared to data queries having been resolved. Future articles will include more details on valuation submission dates and other key valuation information. Tony Williams Head of Employer Risk Services LPP 4

5 Message from Ministry of Housing, Communities and Local Government New Fair Deal Consultation Please see the consultation on the proposed amendments to the Local Government Pension Scheme that are intended to implement the New Fair Deal Policy protecting the pensions position of local government workers who are compulsorily transferred as part of an outsourcing arrangement. In addition, we are proposing mechanisms regarding the transfer of assets and liabilities when LGPS employers merge. Your comments on the proposals are sought by the 4 April, to the following address Lgpensions@communities.gov.uk Yours Robert Ellis Local Government Pensions Team Ministry of Housing, Communities and Local Government NE Quarter 2nd Floor Fry Tel

6 Scheme Advisory Board discussions regarding cost cap We had expected the four headline changes to be introduced to cover the four points below: Removal or 3rd tier ill health Minimum death grant of 75k Lower early retirement factors Lower contributions for those earning under 22,500 However, following a recent announcement it is expected that the proposed changes to the LGPS (removal or 3rd tier ill health, minimum death grant of 75k, lower early retirement factors and lower contributions for those earning under 22,500) will be paused. Please note in particular the proposed new contribution rates (with lower bands for those earning under 22,500) are likely to be replaced and should not be used. We will of course keep you informed when more information becomes known. Amendment regulations MHCLG ran a consultation on changes to the scheme rules between 4 October 2018 to 29 November 2018 (note that a separate consultation was ran on the precise wording of the regulations with the LGPS National Technical Group and the Local Government Association). They responded to the consultation on 18 December On 18 December 2018, MHCLG also laid the Local Government Pension Scheme (Miscellaneous Amendment) Regulations 2018 [2018/1366] before Parliament. The Regulations came into force on 10 January However, some of the provisions have backdated effect to 5 December The key changes are as follows: With effect from 10 January 2019, MHCLG have power to issue guidance to funds on the administration and management of the Scheme. Before issuing (or revising previously given guidance), MHCLG must consult with such persons as they consider appropriate. Funds will be legally required to follow any such guidance. With effect from 17 April 2018 (though we think they meant 14 May 2018), members who left before 1 April 1998 may elect to draw their deferred benefits at any point between age 55 and their NRD. This corrects an error made by the 14 May 2018 changes and aligns the legislation with the intention. The change only impacts on Bexley members, as the other funds instructed us to process cases based on the intention. With effect from 17 April 2018 (though we think they meant 14 May 2018), members who left before 1 April 1998 are no longer required to have left all local government employment should they wish to draw the deferred benefits between 55 and their NRD. We must calculate the survivor pension to a surviving civil partner or to a survivor of a same-sex marriage as if the couple were in an opposite-sex marriage and the deceased member was male. The amendments have effect back to 5 December 2005 (for civil partners) and to 13 March 2014 (for same-sex marriages). Neil Lewins Technical Manager LPP 6

7 AUTO Enrolment Department of Work and Pensions Review of the earnings trigger and qualifying earnings band for 2019/20 On 4 December, the government published its annual review of the earnings trigger and qualifying earnings band for auto enrolment into a workplace pension. The review concludes that the existing threshold of 10,000 remains the correct level at this point in the establishment of auto enrolment and will not change for 2019/20. Neil Lewins Technical Manager LPP 7

8 Employer contributions due to the LPFA Fund From 01 April 2015, the London Pensions Fund Authority (LPFA) has been required to adhere to the guidelines specified in The Pensions Regulator Code of Practice 14 (COP14). Amongst other controls and processes, COP14 places strong emphasis on ensuring that contributions are paid promptly to the Fund and in accordance with the scheme rules. For LPFA, this means that payments must be made by the 19th of the month in order for it to be cleared by the 22nd. We have previously sent out correspondence to all employer policy contacts outlining the legal requirements that comes from participation in the Fund and which emphasises that employers must ensure they have the appropriate controls in place to ensure compliance with COP14. Whilst the vast majority of employers do pay their contributions on time, there are still some employers who struggle to comply in this area. The contributions rates due to LPFA are outlined on your individual rates and adjustment certificates and LPP would be happy to provide further information on what rates are due to LPFA if an employer requires further information. Alex Omell Employer Risk LPP 8

9 LPFA Practitioner's Conference for Fund employers 2019 The first annual LPFA Practitioner's Conference for Fund employers will be held on 11th February 2019 at LPFA s offices, with presentations commencing at 10.00am. This conference is a cornerstone in LPP s new approach to engaging with LPFA s Fund employers and it is an excellent opportunity to share ideas on new ways of working and supporting each other to ensure that together we deliver the best possible service to members and employers. It would be great to see as many HR and Payroll staff involved in pension-related matters within your organisation in attendance. Omolayo Sokoya Employee Representative on the Local Pension Board 9

10 Engagement Update My Pension Online Member Self Service You will hopefully by now have had an invitation to the first LPFA Practitioner's Conference for Fund employers. These events are an invaluable opportunity to support you with your pensions processes so that together we can do the best we can for our members. Part of the work we do on the engagement team is to encourage and assist our members to register for My Pension Online Member Self Service. The online portal allows members to obtain information about their pension quickly and easily. This means that members can start planning for retirement early and may help members to decide whether they would like to top up their pension. A facelifted version of My Pension Online Member Self Service is due for release early 2019 which will be aesthetically more pleasing and all existing members who have signed up will be moved onto the new version automatically. There will be no requirement to re-register! In addition to running retirement estimates independently the online portal allows members to Produce tailored pension forecasts at different retirement ages including lump sum options View annual benefit statements Change contact details quickly and securely View nominated beneficiaries for death grant Receive e-communications Access the most frequently used pension guides, forms and newsletters This service really enhances the member experience and we want to help you to promote this function to your staff. One of the things we can do, is to provide you with a list of members who are not yet signed up to the online service so that you can then engage with those people and highlight the benefits of signing up. Please contact engagement@localpensionspartnership.org.uk if this is something that you would like. Please feel free to share this information with your staff and we will be sending you some material very soon which you can use to promote the benefits of registering for My Pension Online Member Self Service to your staff. For those members who feel they need support in using the online portal they can call the Pensions Contact Centre on In addition to this we will be sharing more information with you at the Practitioner s Conference about the Engagement Strategy which includes supporting members getting online. For employers who would like support using the online portal please contact the engagement team at engagement@localpensionspartnership.org.uk Jonathan Howarth Engagement Officer LPP 10

11 Contacting Us By post: LPP Your Pension Service PO Box 1383 Preston PR2 0WR Telephone: