Pension Administration Update. Presented by Charlotte Thompson Head of Peninsula Pensions

Transcription

1 Pension Administration Update Presented by Charlotte Thompson Head of Peninsula Pensions

2 Agenda LGPS and the interaction with the state pension scheme Performance and Statistics Challenges ahead for 2016

3 Current State Pension Scheme Flat Rate pw Need 35 qualifying years on national insurance record Additional State Pensions additional pension based on earnings Pension credits top up state pension to for single person, if there is a spouse/civil partner Based on individuals national insurance record Spouse/civil partner can get pw based on the other spouse/civil partners national insurance record Spouse/civil partners pensions on death, additional state pension passes to survivor.

4 New State Pension Scheme 2016 Flat Rate Need 30 qualifying years on national insurance record Based on individuals national insurance record Cannot rely on spouse/civil partners national insurance record Spouse/civil partners pensions does not transfer on death Over 80 s pension gone? Additional State Pensions gone Pension credits gone

5 What s that got to do with the LGPS? Additional State Pensions SERPS S2P Pension scheme could contract out of these additional pensions and instead the pension schemes will provide these benefits Contracted out members paid lower national insurance contributions rebate of 1.4 % employees, 3.4% for employers Members of money purchase schemes or personal pension plans paid full national insurance rate but had the equivalent of the rebate paid direct into their pension plans Members of final salary schemes paid reduced national insurance higher take home pay.

6 LGPS Contracting out State Earnings Related Pension Scheme SERPS Benefits built up in the LGPS instead of the state scheme are called Guaranteed Minimum Pension (GMP). Scheme has to pay this minimum level of benefits. Payable from 60 for women and 65 for men Annual pension increase currently paid by the state and added onto the members state pension benefits First 3% of any annual pension increase paid by LGPS, anything more paid by the state If GMP records are not correct, pensioner could receive too much or too little pension increase.

7 LGPS Contracting out Second State Pension S2P introduced April 1997 Defined Benefit schemes had to pass the Reference Scheme Test in order to qualify to contract out No individual tests or minimum levels LGPS pays for all post 1997 pension increase

8 New state scheme how much will I get? New Scheme has no Additional Scheme benefits so all contracting out arrangements will cease members and employers will pay full national insurance from April 2016 DWP will be busy working our what our entitlement is under the new state pension scheme Will depend on national insurance record and we will get the higher amount of the old or new state pension. Members who have been contracted out unlikely to get the full state pension scheme DWP will work out a deduction as we haven t paid the full rate of national insurance GMP and S2P benefits are still in the LGPS and will remain there

9 LGPS DWP reconciliation Large project underway to reconcile all GMP records with those held by DWP This includes making sure that All contracting out dates tie up Names and national insurance numbers match Weekly GMP amounts at DOL/State pension age match GMP benefit is held under the correct pension scheme transfers and refunds are all recorded correctly with DWP. Need to complete project by December 2018 DWP will write to everyone in December 2018 advising them of what GMP entitlement they have and which scheme is holding it

10 Performance and Statistics

11 2015 Review CARE scheme bedding in First CARE revaluation exercise and year end processing 93% of Annual Benefit statements issued by 31 st August 2015 Additional temporary staff to clear backlogs of deferred benefits and amalgamations Total number of cases outstanding reduced by a third since the peak in September 2015.

12 Performance and Statistics Administration performance Percentage in Target Volume of work completed

13 Performance and Statistics Cipfa benchmarking 31/03/15 Cost per member ( average) Cost per pensioner 4.14 ( 8.16 average) Membership numbers February 2015 February 2015 Active Deferred Pensioners

14 Challenges Ahead Continue to reduce backlogs GMP Project for deferred and pensioner members Freedom and Choice for AVC s and regulations regarding Fair Deal pending Budget announcement on pensions tax relief 95k exit cap restrictions on redundancy

15 Questions?