Administration Strategy

Transcription

1 Administration Strategy 1

2 Introduction This document is the Pension Administration Strategy of the Cheshire Pension Fund. It outlines the policies and performance standards required to deliver a cost-effective, inclusive and high quality pensions and administration service. The efficient administration of the Pension Fund is dependent on sound procedures and strong joint working between employers and the Pension Fund This administration strategy sets out the expected levels of performance of the Fund and the scheme employers, and provides details about the monitoring of performance levels and the action(s) that might be taken where non-compliance occurs. It seeks to promote good working relationships and improve efficiency between the Fund and its scheme employers who are collectively responsible for delivering a service which meets the diverse and changing needs of members, as well as ensuring compliance with the regulatory standards required by the Pensions Regulator (tpr) and overseen by the Local Pensions Board. As the cost of administering the Pension Fund is effectively recharged to each employer via their employer contribution rate, maximising service cost-effectiveness and value for money is in everyone s interest. The Administration Strategy has been developed in accordance with the LGPS Regulations 2013, and in consultation with the employers and the Cheshire Pension Fund Committee. The Pensions Consultative Forum (consisting of employer representatives from a broad cross section of scheme employers along with the administering authority), will play a key role in reviewing performance against the standards set out in this document, and recommending changes and improvements. The strategy will be reviewed on an annual basis and more frequently if there are changes to the scheme regulations or Fund policies. All scheme employers will be consulted before any changes are made to this document. The latest version of this document can be accessed from the Fund website at Annual Report on the strategy The scheme regulations require the Fund to undertake a formal review of performance against the administration strategy on an annual basis. This report will be produced annually and incorporated within the annual reports and accounts. The Administration Strategy is effective from 1st April Any enquires in relation to the Strategy should be addressed to The Cheshire Pension Fund Manager The Cheshire Pension Fund, Cheshire West and Chester Council, Council Offices, 4 Civic Way, Ellesmere Port, CH65 OBE Tel: pensions@cheshirewestandchester.gov.uk 2

3 Purpose of the Pensions Administration Strategy The purpose of this Administration Strategy is to promote excellent working relations and a spirit of partnership, between employers and the Fund, ensuring that regulatory compliance is achieved and best value service standards are delivered to scheme members. It does this by: Clearly defining the respective roles of the Administering Authority and Scheme Employers as set out in the LGPS Regulations and other relevant legislation. Setting clear service standards and service levels to be delivered by respective parties, in order to enable efficient administration of functions. Clarifying procedures for effective communication and information exchange between employers and the Administering Authority. Establishing a basis for monitoring service delivery and identifying opportunities for improvement and added value. Providing a framework for monitoring compliance with regulatory requirements and, where necessary, for formal reporting of breaches of the law, in accordance with the Pensions Regulator s Code of Practice No. 14 (Governance and Administration of Public Sector Pension Schemes). 3

4 Roles and Responsibilities - Overview LGPS Regulations 2013 LGPS Regulations 2013 Cheshire Pension Fund Administration Strategy Administering Authority - Overall Governance of the Fund - Administration of Pension Benefits - Fund Valuations - Investment Management in accordance with Funding Strategy - Fund Policy Statements - Administering Authority discretions - Communication with Employers and Scheme Members - Scheme Admissions - Regulatory update and scheme changes - Maintaining Service Level Agreements - Breach Reporting - Support to Local Pension Board and Pension Fund Committee Employers - Support Admission into the LGPS - Nominate designated Pension contact - Publish and maintain Employer Discretion Policy - Collection and payover of contributions - Provision of accurate Member data e.g. o New starter/appointments o Changes of circumstance o Retirements o Other leavers o Valuations, Annual returns and Annual Benefit Statement Data o Transfers/Outsourcing - Monitoring Employer Service Standards - Breach Reporting 4

5 Administering Authority Responsibilities This section outlines the key responsibilities of Cheshire West and Chester Council as the administering authority for the Cheshire Fund and the performance standards scheme employers and scheme members should expect. It is focussed on the key activities which involve interaction with scheme employers and/or scheme members and should not be viewed as an exhaustive list. Scheme Governance and Administration This section details the functions which relate to good governance of the whole Fund, rather than functions that effect individual scheme members benefits. Ref Function/Task Performance target FG1 FG2 FG3 Publish and keep under review the pensions administration strategy. Publish and keep up to date all forms required for completion by scheme members, prospective scheme members or scheme employers. Notify scheme employers and scheme members of changes to the scheme rules. To consult with employers and the Pensions Consultative Forum and publish on the Fund s website three weeks before the effective date. The strategy will become effective from 1 st April Within 30 days of any revision. Within one month of the change(s) coming into effect. FG4 Host meetings for all scheme employers. Twice per annum (or as required) FG5 FG6 FG7 FG8 FG9 FG10 Provide training/induction training for new scheme employers. Provide rolling programme of refresher or hot topic training/induction training for Scheme employers. Provide bespoke meetings/training for scheme employers. Provision of a newsletter/briefing note to scheme employers. Notify a scheme employer of issues relating to the scheme employer s non-compliance with performance standards. Notify a scheme employer of decisions to recover additional costs associated with the scheme employer s poor performance (including any interest that may be due). All new employers offered training session. Twice per annum (or as required). As required. Minimum of two per year. Within 30 days of a performance issue becoming apparent. Within 30 days of scheme employer failure to improve performance, as agreed. (please refer to section on page 14 Monitoring Service Standards and Managing compliance) FG11 Issue annual benefit statements to active By 31 August following the year-end.

6 FG12 FG13 FG14 FG15 FG16 FG17 and deferred members as at 31 March each year. Issue formal valuation results (including individual employer details). Carry out valuation assessments on cessation of admission agreements or a scheme employer ceasing participation in the Fund. Process admission into the Fund including signed admission agreement (where required), notification of contribution rate, allocation of assets and notification to the Secretary of State. Publish, and keep under review, the Fund s governance compliance statement. Publish, and keep under review, the Fund s funding strategy statement. Publish the Fund s annual statement of accounts. No later than 1 March following the valuation date. Within one month of each cessation. Within two months of date joining the Fund provided prospective employer provides full data requirements within prescribed timescales. By 30 September, following the year-end as part of the Fund s annual report and accounts, or within 30 days of the policy being agreed/amended by the Pensions Committee. To be reviewed at each triennial valuation (or whenever there is a material change in either the policy or the Statement of Investment Principles) following consultation with scheme employers and the Fund s actuary. Revised statement to be published by 31 March following valuation date or as required. By 30 September following the year-end or following the issue of the auditor s opinion. FG18 Publish the Fund s annual report. By 30 September following the year-end. FG19 FG20 FG21 FG22 FG23 Publish, and keep under review, the Fund s communication policy statement. Publish, and keep under review, the Fund s Admission policy statement. Publish, and keep under review, the Fund s charging policy. Formulate and publish policies in relation to areas where the administering authority may exercise a discretion within the scheme and keep under review. Issue guidance and spreadsheet for completion of the Annual Return (LGS50) By 30 September, following the year-end, as part of the Fund s annual report and accounts, or within 30 days of the policy being agreed by the Pensions Committee. Within 30 days of any changes being made to the policy. Within 30 days of any changes being made to the policy. Any changes to be published within one month. Provide details of the information required from employers, a minimum of two months in advance 6

7 FG24 FG25 to employers. Issue recharge invoices to employers for specific services. Issue the employer with their Contribution Form for monthly completion and return to the Fund, along with the payment of contributions. of the return being required from employers. Within one month of the service being provided by the fund (or within one month of the fund receiving the charge from a third party). Within one month of completion of the Admission Agreement. 7

8 Scheme Member and Employer Administration This sections details the Administering Authority functions which specifically relate to the administration and processing of scheme member benefits from the LGPS. The Fund s objective against which it will benchmark itself is to deliver 90% (or better) of its services within the published performance target. Any reference to a day is a working day. Ref Function/Task Performance target FA1 FA2 Provide an answer or acknowledgement to scheme members/scheme employers/ personal representatives/dependents and other authorised persons. Set up a new starter and provide statutory notification to the member. Within 10 days from receipt of enquiry. Within 10 days from receipt of correctly completed starter form from a scheme employer. FA3 Process Transfer In requests. Within 10 days of receipt of request from scheme member. FA4 Transfer out quotations processed. Within 10 days of receipt of all the necessary information. FA5 Transfer out payments processed and notify scheme member. Within 10 days of receipt of all the necessary information. FA7 Estimates for divorce purposes. Within 10 days of receipt of request. FA8 FA9 FA10 Notify the scheme employer of any scheme member s election to pay additional pension contributions, including all required information to enable deductions to commence. Process scheme member requests to pay/amend/cease additional voluntary contributions. Provide requested estimates of benefits to employees/employers including any additional fund costs in relation to early payment of benefits from Ill health, flexible, redundancy or business efficiency retirement. Within 10 days of receipt of election from scheme member. Within 10 days of receipt of request from scheme member. Within 10 days from date of request. Note: bulk requests of more than 10 estimates per month will be subject to prior agreement between the Fund and the employer. FA11 Deferred benefits calculated. Within 10 days from receipt of all necessary information. FA12 Deferred benefits processed for payment Within 10 days from receipt of completed forms. following receipt of election. FA13 Process Refund payments. Within 5 days from receipt of all necessary information. FA14 Provision of new retirement letters Within 10 days from receipt of all necessary 8

9 FA15 detailing member options. Process of retirement benefits for payment following receipt of election. information. Within 5 days of receipt of all necessary documentation. First pension payment on next available payroll run. FA16 Notification of death processed. Within 5 days of receipt of all necessary documentation. FA17 Process of death grant for payment. Within 5 days of receipt of all necessary documentation. FA18 FA19 FA20 Processing of dependants pensions for payment. Provide payslips to scheme members in receipt of a pension. Process all stage 2 pension internal dispute resolution applications. Within 5 days of receipt of all necessary documentation. Once a year in paper format and if monthly pension amount changes by 1 net. Within two months of receipt of the application, or such longer time as is required to process the application where further information or clarification is required. FA21 Set up 50/50 Membership. Within 10 days from receipt of correctly completed 50/50 form from a scheme employer. FA23 Answer all calls to helplines in office hours. Provide office cover of 8.30 to 5.00 Monday to Thursday and 8.30 to 4.00 on Friday. 9

10 Employer Responsibilities Employer s Designated Pensions Contact The delivery of a high quality, cost effective administration is dependent upon joint working between the Fund and key individuals within the employers organisations. The aim is to ensure that Scheme members and other interested parties, receive high levels of service and ensure the increasing statutory requirements are met. To ensure that joint working is effective, each Employing authority should designate a named individual to act as the main point of contact with regard to any aspect of administering the LGPS. Their key responsibilities will be to ensure that the standards and levels of service set out in this Administration Strategy are delivered and regulatory responsibility is complied with. to act as a conduit for communications to appropriate staff within the employer - for example, Human Resources, Payroll teams, Directors of Finance. to arrange distribution of communications literature as and when required. to assist and liaise with the Fund on promotional activities. to inform the Fund of any outsourcings, TUPE transfers or alternative service delivery arrangements that may be under consideration. to support the Pensions Consultative Forum. to liaise with, and assist the Administering Authority in the identification, explanation, reporting and resolution of statutory breaches, as required by the Pensions Regulator s Code of Practice No

11 Employer Responsibilities This section outlines the responsibilities of all scheme employers in the Fund and the performance standards scheme employers are expected to meet to enable the Fund to deliver an efficient, quality and value for money service. The performance standards expected are expressed as targets i.e. the level of performance expected in normal circumstances. It is accepted that, on an exception basis, it may not be possible to achieve the target indicated and a pragmatic approach will be adopted, subject to employers using their best endeavours to meet expected standards wherever possible. Scheme Governance and Administration This section details the functions which relate to the governance and administration of the whole Fund, rather than individual scheme members benefits. Ref Function/Task Performance target EG1 Confirm a nominated representative to receive information from the Fund and to take responsibility for disseminating it within the organisation. Within 30 days of employer joining fund or change to nominated representative. EG2 Formulate and publish policies in relation to all areas where the employer may exercise a discretion within the LGPS (including providing a copy of the policy document to the Fund). To be kept under review and a revised statement published within one month of any changes and no later than 6 months after being informed by the Fund of any relevant change in regulations. EG3 Respond to enquiries from the Fund. Within 10 days from receipt of enquiry. EG4 EG5 EG6 EG7 EG8 EG9 Remit employer and employee contributions to the Fund and provide schedule of payments in the format stipulated by the Fund. Implement changes to employer contribution rates as instructed by the Fund. Provide year-end information required by the Fund in the format stipulated in the instructions issued January each year. To ensure optimum accuracy of year-end information. Distribute any information provided by the Fund to scheme members/potential scheme members. Refer new/prospective scheme members to the Fund s website. Cleared funds to be received by 22nd calendar day of the month after deduction or 19th (if not paid electronically). At date specified on the actuarial advice received by the Fund. By 22nd April following the year-end. With no less than 90% accuracy across all members. Within 10 days of its receipt. Within 10 days of commencement of employment or change in contractual conditions. EG10 Notify the Fund if contracting out services At the time of deciding to tender so that 11

12 EG11 EG12 EG13 EG14 EG15 EG16 which will involve a TUPE transfer of staff to another organisation. Work with the Fund to arrange for an admission agreement to be put in place when contracting out a service and assist in ensuring it is complied with. Notify the Fund if the employer ceases to admit new scheme members or is considering terminating membership of the Fund. Make additional fund payments in relation to early payment of benefits from flexible retirement, redundancy or business efficiency retirement or where a member retires early with employer s consent. Make payment of additional costs to the Fund associated with non-compliance with performance standards of the scheme employer. Respond to enquiries from the Fund relating to Breaches of the Law. Prompt payment of invoices issued by the Fund for specific services provided. information can be provided to assist in the decision. Agreement to be in place no later than date of contract. Notify Pension Fund if terms of Admission Agreement are not being met. As soon as the decision is made, so that the Fund can assess the impact and instruct the actuary to carry out calculations, if applicable. Within 30 days of receipt of invoice from the Fund. Within 30 days of receipt of invoice from the Fund. Within 5 days of the request. Within 30 days of receipt of invoice from the Fund. Scheme administration This section details the functions which relate to scheme member benefits from the LGPS. Ref Function/Task Performance target EA1 Notify the Fund of new starters. Within 4 weeks of member joining or such shorter periods as required by auto-enrolment obligations under the Pensions Act EA2 Arrange for the correct deduction of employee contributions from a member s pensionable pay. Immediately on joining the scheme, opting in or a change in circumstances. EA3 Ensure correct employee contribution rate is applied. Immediately upon commencing scheme membership and in line with the employer s policy and as a minimum in each April payroll thereafter. EA4 Ensure correct deduction of pension contributions during any unpaid period of 12 Immediately, following receipt of election from scheme member, to make the necessary pension

13 EA5 EA6 EA7 EA8 EA9 EA11 EA12 EA13 EA14 child related leave, strike absence or other forms of leave of absence from duty. Commence deduction of additional pension contributions or amend such deductions, as appropriate. Cease deduction of additional pension contributions by the member. Arrange for the deduction of AVCs and payment over of contributions to AVC provider(s). Notify the Fund of other material changes in employees circumstances (eg, marital or civil partnership status) using the method stipulated by the Fund. Notify the Fund of leaves of absence with permission (maternity, paternity, career break, etc) using the method stipulated by the Fund. Notify the Fund when a member leaves employment including an accurate assessment of final pay using the method stipulated by the Fund. Notify the Fund when a member is due to retire including an accurate assessment of final pay and authorisation of reason for retirement using the method stipulated by the Fund. Notify the Fund of the death of a scheme member using the method stipulated by the Fund. Appoint person for stage 1 of the pension dispute process and provide full details to the Fund. contributions. Month following election to pay additional contributions. Immediately following receipt of election from scheme. Commence deduction of AVCs in month following the month of election. Pay over contributions to the AVC provider(s) by the 19th of the month following the month. Within 4 weeks of notification by the scheme member of a change in circumstances. Within 20 days of notice from employee. Within 4 weeks of month end in which member left. At least 4 weeks before retirement date. As soon as practicable, but within ten days. Within 30 days of becoming a scheme employer or following the resignation of the current adjudicator. 13

14 Monitoring Service Standards and Managing Compliance The Cheshire Pensions Team will monitor the performance of the Administering Authority and scheme employers against the targets and standards set out in this strategy and will share monitoring outcomes and any issues arising with: the Pensions Consultative Forum the Local Pensions Board the Pension Fund Committee individual scheme employers/members as appropriate The Pensions Regulator (where applicable) Where performance issues arise, the aim in the first instance will be to resolve issues informally between the parties, and to identify appropriate action to address any underlying issues, through training, coaching, process improvements or better communication. Where persistent and on-going failure occurs, and no improvement is demonstrated by an employer (and, or unwillingness is shown to resolve the issues identified), the following steps will be taken:- the Cheshire Pensions Team will write to the designated contact for the scheme employer setting out the areas of poor performance. the Cheshire Pensions Team will meet with the employer to discuss areas of concern and agree the action required and timescales for remediation. if no improvement has been demonstrated by the employer, or there has been a failure to take forward agreed action within the required timescale, the Cheshire Pensions Team will issue a formal notice to the Chief Executive of the employer body setting out the issues of concern and the immediate action required. The final notice may also include a claim for additional costs, taking account of the time and resources required to address and resolve the poor performance in question and any consequences arising. Please note, notwithstanding the above process, where there is a clear breach of regulations or agreed performance, for instance, where an employer fails to pay the monthly contributions income to the fund in line with regulatory deadlines or where the fund fails to issue statutory communications (such as the Annual Benefit Statements) to members within statutory deadlines, the Fund is duty bound to capture this on its Breaches Log. All such breaches will be investigated and if deemed material will be reported to the regulator. The Breaches Log is presented to the Pension Fund Committee and Local Pension Board on a quarterly basis. A copy of the fund s breaches policy can be found on the website at Additional Administration Charges Where the Administering Authority incurs additional costs in respect of work requested by individual employers, for example, in respect of new admissions, early or ill-health retirements, or employer accounting returns; these will be recharged on completion of the work in question. Invoices will be subject to the normal payment terms of the Cheshire West and Chester Council, as administering authority. Non-payment will be managed through the Council s normal debt recovery process. Examples of specific additional administration charges and the basis for calculation are set out in the Funds charging policy which is available on the employer section of the website. 14