LOCAL PENSION BOARD MEETING AGENDA

Transcription

1 BOARD : LOCAL PENSIONS BOARD DATE : 6 February 2018 TIME : 10am VENUE : Room 3.1, Nicholas House, Blackfriars, Chester LOCAL PENSION BOARD MEETING AGENDA 1. PROCEDURAL MATTERS The Board will receive the minutes of the last meeting on 7 November 2017 Declarations of interest 2. REVIEW OF PENSION FUND AND INVESTMENT SUB COMMITTEE MINUTES To receive the minutes of the Pension Fund Committee meeting on 8 December. The Board will also receive the minutes from the Investment Sub Committee meeting of 17 November. 3. UPDATE FROM THE SCHEME ADVISORY BOARD The Board will receive a verbal update following the Scheme Advisory Board meeting on the 16 November as well as the Cost Management, Benefit Design and Administration Sub-Committee meeting on the 7 November. 4. PERFORMANCE MANAGEMENT FRAMEWORK QUARTER /18 The Board will receive the Performance Management Framework covering the period 1 October to 31 December 2017 (along with the quarter 2 comparator 1 July to 30 September 2017). 5. RISK REGISTER The Board will review the Risk Register and provide comment. 6. DATA IMPROVEMENT PLAN and GENERAL DATA PROTECTION REGULATION The Board will an update on production of the Fund s Data Improvement Plan, along with actions being undertaken by the Fund to comply with GDPR by the deadline of 25 May LOCAL PENSION BOARD ANNUAL REPORT AND OUTTURN 2017/18 The Board will receive the forecast outturn against the Local Pension Board Budget and will review and comments on a draft of the 2017/18 Annual Report. 8. BREACHES LOG The paper also provides a summary of the Breaches Log for the period 1st April 2015 to 30 September FEEDBACK FROM EVENTS Board members will feedback from recent conferences and seminars attended, including: CIPFA Annual Pensions Conference 22-Nov LGPS Fundamentals Trustee Training Day 3 5-Dec 10. REVIEW AND DEVELOP THE WORK PLAN FOR 2017/18 Page 1 of 2

2 The Board will review progress against the work plan for 2017/18 and consider the work programme for 2018/ AOB Page 2 of 2

3 Local Pension Board 23 January 2017 Item 1 MINUTES OF LOCAL PENSION BOARD 7 November 2017 PRESENT Board Members: Officers: Peter Raynes (PR) (Chairman), Cllr Robert Bisset (RB) (CWAC), Geoff Wright (GW) (Unison), Neil Harvey (NH) (GMB) and Adrienne Laing (AL) (Bridgewater High School) Heidi Catherall (HC) and Steve Wilcock (SW) 1. PROCEDURAL MATTERS The Board members reviewed the minutes from the last meeting on 25 July. GW requested that the Fund provide an article on the 50:50 option for inclusion in the next available Unison newsletter. AL requested that the minutes from the 25 July meeting be amended to confirm her attendance. No other declarations were received. 2. REVIEW OF PENSION FUND AND INVESTMENT SUB COMMITTEE MINUTES The Board reviewed the minutes of the Pension Fund Committee meeting which was held on the 1 September and the Investment Sub Committee minutes from 8 September. RESOLVED that The board: Noted the minutes from the Pension Fund Committee and Investment Sub Committee meetings. 3. UPDATE FROM THE SCHEME ADVISORY BOARD The Board noted that the September meeting of the Scheme Advisory Board has been postponed until 16 November and the Cost Management, Benefit Design and Administration Sub-committee last met on the 18 May. The Board reviewed the agenda of the Investment, Governance and Engagement Sub- Committee meeting which took place on the 16 October. Board members reviewed the results of the SAB s Local Pension Board survey which had been issued to all LGPS Funds in September. 4. PERFORMANCE MANAGEMENT FRAMEWORK Item 1, Page 1 of 5

4 Local Pension Board 23 January 2017 Item 1 The Board were presented with the Performance Management Framework (PMF) for quarter 2 (1 July to 30 September 2017), which also contained comparator information from the previous quarter/s. The Board undertook a full review of the framework and concluded that they were happy with the current format and content contained within it. One addition will be added to the framework within the Feedback from External Sources section to highlight progress with LGPS Central. Any material findings will be highlighted on the summary page of the framework. It was accepted that there may be little detail to add until the Fund begins the transition of assets into the pool which will commence after 1 April RESOLVED that The board: Reviewed the Performance Management Framework for quarter 2 (1 July to 30 September 2017). The Board reviewed the content of the PMF and suggested some additional information be included for the LGPS Central Pool. 5. RISK REGISTER The Board received a report which outlined the steps required to produce a Board specific risk register. A risk register template was also provided. Members of the Board discussed the risks associated with their Terms of Reference and measures that were in place to mitigate them. The Board requested that officers capture the discussions with the risk register and circulate to the members via for approval. RESOLVED that: The Board: Identified the risks for inclusion on the Risk Register in accordance with the objectives set out in the Board s Terms of Reference. Requested that officers complete the Risk Register and circulate to the Board via for approval. 6. DATA MANAGEMENT, GENERAL DATA PROTECTION REGULATION and CYBER SECURITY The Board received a report which provided an update on how the Fund is managing three important areas; Data Management, General Data Protection Regulations and Cyber Security 1. Data Management Item 1, Page 2 of 5

5 Local Pension Board 23 January 2017 Item 1 The Board were presented with details of IT developments that the Fund is implementing in order to improve the timing and accuracy of information received from Employers. The Fund is introducing Employer Self-Serve, which will allow employers controlled access to their members data held within the Fund s database in order to resolve queries. This functionality also provides Employers with a secure portal through which they can send and receive information to and from the Fund. Additionally the Fund will be replacing the current annual system of receiving per member data from Employers with a monthly return, which will also incorporate in-year changes such as new starters and leavers. This development is known as Monthly Interfacing. The Fund have also undertaken an exercise to determine the presence of common data (as defined by the Pensions Regulator) within the database for all members who have an ongoing liability. The results of this exercise show that the data is above 99% in most areas and in some is 100%. However, the accuracy of the data is yet to be tested. Once the Fund has completed the work of testing the common data it will progress to checking the conditional data i.e. that which is specifically required in order to process member casework such as pay data. The Fund is in the process of developing a Data Improvement Plan to capture how the fund will ensure the quality and accuracy of data in the future. 2. General Data Protection Regulations The Local Government association are producing template documents to assist all LGPS Funds with meeting the requirements of GDPR. It is hoped that the templates will be available in early The Fund is working through a number of actions largely relating to the disposal/deletion of historic data, production of data retention policies and awareness raising. The Board requested that the Pension Fund Committee receive a report on GDPR at its next meeting in order to ensure that they were aware of the implications of the regulations. The Board further requested that they continue to monitor the Fund s progress in meeting the requirements of GDPR in the lead up to May 2018 and beyond. 3. Cyber Security The Board received a summary of the Administering Authority s approach to cyber security and how they maintain the security of the Fund s data. RESOLVED that: The Board: Noted the progress made on improving the quality of data in the Fund. Noted the position on GDPR and that the Board will receive a further update at the next meeting. Recommended that the Pension Fund Committee receive a report to advise them of the requirements of GDPR. Item 1, Page 3 of 5

6 Local Pension Board 23 January 2017 Item 1 Noted the position with regard to cyber security. 7. BREACHES LOG The Board were presented with a summary of the breaches log for the period 1 April 2015 to 30 June 2017, including any identified trends. RESOLVED that: Noted the summary of the Breaches Log for the period 1 April 2015 to 30 June FEEDBACK FROM EVENTS Members of the Board provided feedback from the various events they had attended. RESOLVED that: When Board members attend events they will circulate copies of the slides to all members to help inform future agenda items. 9. WORK PLAN The Board reviewed the work plan for and identified actions to be incorporated into the plan, including: Review the data on GDPR. Finalise the Board specific Risk Register. Review membership of the Board. Produce the LPB Annual Report and Outturn for 2017/18. Review the Officers training plan. Investment Strategy Review add to the work plan for a later meeting. RESOLVED that: The Board reviewed the work plan and identified some specific actions to be added. 10. AOB Dates for future meetings were agreed as follows: 23 January April June 2018 Review of Draft Statement of Accounts 17 July November 2018 Item 1, Page 4 of 5

7 Local Pension Board 23 January 2017 Item 1 Board members will also attend the Fund s offices to gain first-hand experience of the work undertaken by the administration team. Attendance will be arranged for after the January and before the April 2018 meeting. Item 1, Page 5 of 5

8 Local Government Pension Scheme Scheme Advisory Board Agenda 1pm, Thursday 16 th November 2017 Item Timings 1 Foreword from LG Minister, Marcus Jones Welcome, apologies and introductions Actions and agreements from meeting of 26 th June 2017 [A][B] SAB 2017/18 budget/levy [C] Brewster/Walker [D] Academies/3 rd tier employers projects Update and next steps [E] Cost management committee update [F] Investment committee update [G] Cost transparency/procurement working group Update [H] AOB Date of next meeting 2.55 Publications of documents and papers A Actions and Agreements from meeting of 26 th June 2017 web site B Progress report on actions from meeting of 26 th June 2017 web site C Paper from Secretariat web site D Paper from Secretariat web site E Paper from Secretariat web site F Cost Management committee update web site G Investment committee update web site H Paper from Secretariat web site Meeting venue is Etc venues, 1 Drummond Gate, Pimlico, London SW1V 2QQ =2&pc=SW1V+2QQ&mapp=map.srf&searchp=ids.srf Scheme Advisory Board Secretariat Local Government House, Smith Square, London SW1P 3HZ T E Elaine.english@local.gov.uk W

9 Local Government Pension Scheme Cost Management, Benefit Design and Administration Committee DATE: 7 th November 2017 VENUE: Cockell Room, 7 th Floor, 18 Smith Square, London SW1P 3HZ TIME: 11.00AM 1.00PM AGENDA Item Page(s) Timings 1 Welcome, introductions and apologies - 11:00 2 Matters arising Paper A 11:05 3 Scheme Advisory Board Cost Management Process GAD update 11: /50 survey - Update Paper B Ill health retirement group - Update Late retirement factors - Update Paper C /17 SF3 statistical return Paper D 12:15 8 Single stage IDRP Paper E 12:30 9 Academies/3 rd tier employer projects - Update - 12:40 10 AOB Date of next meeting Scheme Advisory Board Secretariat Local Government House, Smith Square, London SW1P 3HZ T E Elaine.english@local.gov.uk W

10 This is the quarterly pack of Pension Fund performance information which is based on the period 1 Ocotber to 31 December 2017 and includes a comparison to the previous quarter 2-1 July to 30 September Qtr 3 (Oct-Dec 2017) Summary position: The overall assessment for Quarter 3 is Green. A summary of performance for each area is shown below including a RAG status. There is also a detailed worksheet for each of the subjects which contains more detailed information. This Quarter - 1 Oct to 31 Dec 2017 GREEN Last Quarter - 1 Jul to 30 Sep 2017 GREEN Subject Comment RAG Status The completion of casework against the CIPFA benchmarking statistics during the quarter illustrate that the SLA's were met in all but two areas transfers in and deferred casework. The RAG status is amber to denote the total number of cases outstanding. AMBER Administration Casework There were 17 new breaches in quarter 3 of 2017/18, which actually covered breaches that related to September and November only (compared to 12 in quarter 2 of 2017/18 ). Of the 17 breaches in Qtr 3, 12 related to late payment of Contributions and 5 related to Administration breaches for the late notification to leavers of their rights and options. There were no breaches reported to the Regulator during quarter 3. AMBER Breaches The Fund received 12 FOI's/Requests for Information and a complaint during quarter 3. GREEN Complaints/FOI's/IDRP's/Contact the Pension Board queries The Fund has an internal KPI to receive 98% of contributions income on time. For each of the months between October 2017 and December 2017 the Fund received well above the 98% of income on time. GREEN Contributions Monitoring The Pension Fund is currently forecasting an underspend of 93k against its Administration/Oversight and Governance Budget for 2017/18. However, the underspend does not factor in the additional costs which will be required to meet the Fund's obligations with regards to the GMP reconciliation and to clear aggregation casework backlogs. GREEN Financial Performance The service lost 25.5 days through sickness during quarter 3 of 2017/18 which equates to an annual average of 1%. This compares to 64.8 days lost in quarter 1 which is an annual average of 3%. There were no sickness days lost in quarter 3 relating to stress (compared to 81% for non-work related stress in quarter 2). GREEN HR (absence) The Pension Fund has 543k of debt outstanding at the end of Quarter 3 of 2017/18, some of which relates to prior years. The RAG status is Red to reflect the fact that the value of debt outstanding which is over 30 days old is more than 50% of the total debt figure. The majority of this debt relates to Early Retirement strain, the costs of which the Fund has agreed with the invoiced Employers ahead if raising the invoices, and so the income is expected to be received shortly. RED Debt Recovery The Fund is on target to deliver the key tasks and milestones which were set out in the 2017/18 Action Plan, which in turn links to the outcomes in the Fund's Business Plan. One action in quarter 3 was categorised as amber to denote a minor delay in their completion against agreed deadlines. Aa number of actions have been coloured in blue. This denotes actions which have moved forward on the plan as tasks have re-prioritised throughout the year. GREEN Business Plan Progress The Board receive feedback from various external sources on a variety of issues. Included within this quarter are: CIPFA Benchmarking Results for 2016/17 SF3 Results for 2016/17 GREEN Feedback from External Sources Investment Manager Qualitative and Quantitative Performance Fund investment returns remain ahead of the asset performance assumptions contained within the actuarial valuation over a rolling 3 year period. Returns are also ahead of the tailored benchmark return and CPI. GREEN

11 Local Pension Board 6 February 2018 Item 5 LPB RISK REGISTER Introduction 1. The Board received guidance at the last meeting on the production of a Board specific Risk Register (RR) and Board members identified the risks and mitigations to be captured within the register. 2. This report presents the completed draft Risk Register for the Board to review and approve. Background 3. The Board completed the Scheme Advisory Board survey entitled Survey of LGPS Local Pension Boards in October 2017, a copy of the Board s response can be viewed on the Fund s website using the link below: 4. In completing the survey it was recognised that the Board did not have a RR which specifically considers the risks associated with their obligations as set out in the Terms of Reference. 5. The Pension Fund itself does have a strategic risk register which includes details of all the major risks facing the Fund and the actions which are in place to mitigate those risks. Risk Register 6. A draft of the Board specific RR is enclosed in Appendix A. The RR has a number of sections as set out in the table below: Risk Register Section Objective / Priority Risk / Opportunity Gross Score Current Mitigating Controls Current Net Score Planned Actions Target Score Detail Required A summary of the objective/s What are the risks / opportunities that could prevent / assist you with achieving the objective What is the likelihood/impact without any mitigating factors being taken into consideration What are the current controls which are in place to counter/support the risk / opportunity What is the likelihood/impact with mitigating factors being taken into consideration What are the additional action/s planned to further mitigate the risk/opportunity What is the likelihood/impact following these additional actions 7. Board members will be required to review and approve the RR. Recommendation The Board are asked to: Review and approve the Risk Register which was produced in accordance with the objectives set out in the Board s Terms of Reference. Item 5, Page 1 of 1

12 Pension Board Risk Register Please note the column for the Total Score automatically calculates the score and assigns a colour (RAG). Risk Register Completed: Date of Revision: Objective / Priority Risk No Risk / Opportunity Gross (without any controls) Likelihood Impact Total Risk Score Current Mitigating Controls (in place and effective mitigation of risk) Current / Net (as it is now) Likelihood Impact Total Risk Score Risk Owner Planned Risk Actions Timescale Target / Aspiration (When all Actions in Place) Likelihood Impact Total Risk Score Status of Risk (,,, ) Risk Update / Comments 1 Failure to identify (Board members') conflicts of interest results in failure to act in the best interests of the Fund leading to challenge/cost The Board has a conflict of Interest Policy The Conflict of Interest policy is reviewed on an annual basis All Board members sign a declaration upon appointment to confirm there are no conflicts which would prevent them from undertaking the role Declarations of Interest are requested at the start of each Board meeting Information supplied to the Board is anonymised to allow them to make recommendations without any bias Failure to maintain a Competent Board with adequate skills and knowledge, results in failure of Board members to properly exercise their funtions as a member of the Pension Board All Board members receive an induction upon joining the Fund and are required to read all statutory Fund documents within a short timreframe of being appointed All Board members attend training events delivered by Pensions Experts such as the LGA, PLSA and CIPFA All Board members have access to accurately maintained core documents and policies Board members attend quarterly joint training sessions with the Pension Fund Committee in accordance with the Fund's Training Policy Each member has agreed to adopt the knowledge and understanding policy framework The Chair of the Board has a role to ensure that the terms of reference are adhered to by all Board members The knowledge and skills of the Board will be regulalry reviewed and any training requirements will be addressed 0 Securing compliance with the LGPS regulations and any other legislation relating to the governance and administration of the LGPS Change of membership of the Board leading to loss of knowledge and skills, resulting in inability to fulfil its obligations under the Terms of Reference Board members are appointed for a term of 3 years, with the option to extend where a member leaves during that term a recruitment process is undertaken by the Fund to replace them Every 3 years the Fund will seek expressions of interest for suitably qualified and experienced members to join the Board and/or extend the tenure of existing members Failure of the Board to implement the correct mechanisms in order to effectively monitor the compliance of the Fund leading to the inability to undertake their role efficiently The Pension Fund's Governance Policy clearly outlines the role of the Board and the Pension Fund Committee Board members review the Pension Fund Committee papers and minutes and attend joint training sessions so have a detailed understanding of the decisions the Committee are asked to make The Board's Terms of reference provides the framework for how the Board should perform their duties The Board receive a comprehensive set of standard performance reports on a regular basis which allow them to monitor the performance of the Fund The Chair of the Board also holds regular liaison meetings with the Chair of the Committee and Board minutes are a standing item on the Committee agenda allowing any recommendations by the Board to be escalated Failure of the Board to receive the required support from The Fund resulting in the inability of the Board to carry out its functions A key officer is appointed to provide support to the Board Additonal officer support is available from within the Fund Officers attend network groups in order to share ideas to help facilitate the Board V:\Pensions Board\ Meetings\6. 6 February 2018 (moved from 23 Jan 2018)\Item 5 - Appendix A - Pension Board Risk Register.xls 02/02/2018

13 Local Pension Board 6 February 2018 Item 6 DATA IMPROVEMENT PLAN and GENERAL DATA PROTECTION Introduction 1. This report provides the Board with a the draft of the Fund s Data Improvement Plan and also provides an update regarding progress made in meeting compliance with General Data Protection Regulations. Data Management 2. A draft Data Improvement Plan (DIP) has been developed which outlines the high level actions that the Fund will undertake in order to improve the quality of data held by the Fund (Appendix A). The Board are requested to note and comment on the draft DIP. 3. The DIP has been produced in accordance with guidance issued by the Pensions Regulator in September 2017 entitled A quick guide to improving your data (Appendix B). 4. A more detailed operational DIP, including detailed actions, timescales and resources will be developed over the coming weeks and will be presented to the Board at the next meeting. This will form part of the Fund s wider work programme to transform the way the Fund operates and how it interacts with Employers. General Data Protection Regulations (GDPR) 5. The Board have previously received updates on the Fund s progress in meeting the General Data Protection Regulation (GDPR) changes, which are effective from 25 May The Fund is continuing to make progress with this task as outlined in the paragraphs below. 6. At the last meeting the Board recommended that the Pension Fund Committee receive a report on GDPR as part of the requirement of awareness raising. To that end a report was presented to the Committee at their meeting on the 8 December. The Committee noted the requirements and that the Board would continue to monitor the Fund s progress with GDPR and would make any recommendations to the Committee as required. 7. In addition to this all staff within the Fund have undertaken an online learning session on GDPR and one staff member will be attending a half day course during February. 8. As the Board are aware, many of the requirements of GDPR are common to all LGPS Funds. Therefore the Local Government Association will be distributing a number of standard template documents to all Funds as set out in the table below. The templates are expected by the end of February Template Documents Privacy Statement Privacy Impact Assessments Data Protection Policy Incident Report Form Detail This will outline what and how information is stored, what it is used for, who it is shared with and why and will contain information about opt outs. A PIA is required for any contract which requires sharing data or any changes to working practice. This policy would set out how LGPS Funds comply with the requirements of GDPR. To log any issues which require reporting to the Information Item 6, Page 1 of 2

14 Memorandum Understanding of Local Pension Board 6 February 2018 Item 6 Commissioner This document will set out that participating employers in the LGPS are able to share data with the LGPS administering authority without a data sharing agreement being in place i.e. that there is no legal requirement for employers to have a data sharing agreement with LGPS administering authorities as they are both data controllers 9. The Fund holds data in a variety of places and formats, including within the administration database itself, shared drives, archived files, paper documents, multi-media (DVD s, Microfiche) and within accounts. 10. The Fund s database provider is implementing an upgrade to the database in order to comply with GDPR. This will provide standard functionality which will allow the Fund to delete member records individually. However, the Fund can procure additional functionality which will allow it to delete member records on a bulk basis. The cost of this additional functionality will be considered as part of the GDPR project and if required will be included within the 2018/19 budget which will be approved by the Pension Fund Committee in March The main action for the Fund between now and the 25 May 2018 will centre around cleansing the existing data which is held in a variety of formats and implementing policies and procedures for how information will be obtained, stored, kept secure and deleted in the future. 12. A data retention policy will be implemented confirming where and how information is held by the Fund and for how long. The policy will contain guidance on specific areas, for instance, a policy for the retention of s in personal accounts of staff. 13. All staff have been requested to cleanse their personal accounts and file any necessary information to a members record. In order to evidence the extent of this data cleanse all staff will identify the size of their mailbox (i.e. how much data is used) before and after the cleanse. 14. The Board will be kept up to date with progress throughout the period to 25 May Recommendation The Board are asked to: Note and comment on the Data Improvement Plan. Note the progress made by the Fund to date in meeting compliance with GDPR and the further actions required before 25 May Item 6, Page 2 of 2

15 Cheshire Pension Fund Data Improvement Plan The overarching objective for the Fund is to pay the right benefit to the right member at the right time. The Fund has undertaken a detailed business process review of all systems and processes within the Fund and now has a clear plan for all the issues which need to be addressed. Implementation of this plan will improve the quality of data held by the Fund which in turn will improve operational efficiency and improve the experience for the customers of the Fund. It will also allow to fund to meet its statutory obligations including the General Data Protection Regulation. The Fund is reliant upon data supplied to it by its partner organisation, principally Employers, and so the responsibility for providing timely and accurate data needs to be with them. The issues identified by the review have been summarised into overarching actions as summarised in the table below. The Fund separates data into two categories in line with the requirements of the Pensions Regulator. The categories are: 1. Common Data i.e. name, address, national insurance number, date of birth etc 2. Scheme specific data other member specific data such as service history Issue Detail Action Required How this will be achieved Poor quality data received from Employers The Fund is reliant upon data provided by Employers which should be accurate and supplied in a timely manner. The Fund receives information from Employers in a variety of formats and often with key data missing. This means that the Fund has to then chase Employers on a piecemeal basis in order to obtain the necessary The Fund needs to streamline and simplify how it receives information from Employers and to build in validations from the outset to avoid accepting non-compliant data. The Administration Strategy needs to be reviewed to clearly outline the responsibilities of both the Fund and Employers and performance reports The Fund will introduce Employer Self-Serve which is functionality that will allow employers limited access to view their members records on the Fund s database and will act as a secure portal for information. The Fund will also introduce Monthly Interfacing where employers will send a full suite of member information on a monthly basis and the Fund can use this to update the members record and to

16 Inefficient Use of the Administration Database Inefficient working practices leading to poor customer service Inability to meet statutory obligations information in order to process the casework which is inefficient. This also impacts upon the Fund s ability to meet statutory deadlines, such as production of Annual Benefit Statements, and also creates casework backlogs for the Fund. The Fund currently undertakes a high level of manual work in conjunction with the system. This increases the risk of human errors and inaccurate data being included within the system and prevents the ability to validate data automatically. The Fund is currently structured into functional teams which can lead to bottlenecks in some areas. It also represents a disjointed service for the customer as elements of their membership are addressed at different times and by different teams. This approach results in multiple handling of the same data by different teams and limits the ability to spot inconsistencies across the members record. The Fund is unable to meet the obligation to send 100% of ABS to members by the 31 August each year as necessary information has not been supplied by Employers. The Pensions Regulator is introducing questions on the annual scheme return need to be produced regularly to address any instances of noncompliance. All staff members need to understand that correct way to use the system so that processes can be automated to the fullest extent possible leaving staff free to work on cases where manual intervention is required, due to their complexity. The Fund will implement a multiskilled structure where staff are able to deal with all the members needs and provide an holistic service. This will improve the speed and quality of service provided to members. The Fund will introduced simplified and streamlined processes for all Employers to provide information to the Fund in a standard format. This information will be provided to the Fund via an online portal which will both ensure the data is secure and continually cleanse the common data. The Fund has developed a programme of work with its database provider, Civica, in order to train staff in the correct way to update and use the system to maximise its efficiency. There are also a number of developments planned for 2018 in order to automate the work undertaken by the system itself. A staffing restructure is being implemented by March All staff will receive training on their new roles. The move to Monthly Interfacing will improve the quality of information held by the Fund and will ensure that all new starters and leavers to the Fund are dealt with in a timely manner thereby allowing the Fund to comply with the ABS deadlines. It will also allow the Fund to continually cleanse

17 for Fund s to demonstrate the quality of common (i.e. name, address etc) and scheme specific information (member specific information required to process the member record). will also facilitate the inclusion of data validation so that data issues are resolved by the Employer before they are accepted by the Fund. and check common data against the data held by Employers. In order to meet the overarching actions outlined above the Fund has a number of workstreams which are in the process of being delivered Action Progress to Date Follow up Activity Required Success criteria Timescales The Fund has implemented The Fund has an Employer meeting All Employers will be registered on an Employer portal into its planned for the spring of 2018 where it the ESS. administration database and will present the reasons for the move to All Employers will issue their data to is piloting it with a couple of Monthly Interfacing. the Fund on a monthly basis on the Employers. This will be This will be followed up by workshops format requested. rolled out to all Employers in and targeted communications by the the spring/summer of Fund and engagement with Employers The Pensions Consultative and their payroll providers in order to Forum has received the implement MI. specification for Monthly Employers will be onboarded through Interfacing and will assist the the summer/autumn of Fund with its communication plan for the implementation with all Employers 1 Introduction of Employer Self-serve and Monthly Interfacing 2 Review of data quality against common and scheme specific criteria and implement The Fund has reviewed the presence of common data for all members (with an ongoing liability) and is 100% compliant. An exercise to review the accuracy of common data has With the introduction of MI the Fund will have the ability to routinely cleanse the common data with that held by Employers on a monthly basis. The next phase of the work is to develop a suite of reports to firstly benchmark the presence of scheme The Fund will have 100% compliance on its common and scheme specific data with systems for continually checking the accuracy of the data. All common data will be continually checked against the data held by Employers on a monthly basis as part April-18 to Mar- 19 Apr-18-Mar-19

18 regular reviews 3 Clear historic backlogs 4 Development of the administration database to maximise commenced with the Fund s administering authority. The Fund will resolve as many data issues as possible then will liaise with the administering authority to resolve all other issues. The Fund has undertaken an exercise in 2017 to identify all outstanding information relating to starters and leavers to and from the Fund and has provided the relevant Employers with details in order to resolve the queries. Staff have been working overtime during 2017 to clear the casework backlog relating to deferred cases by the target date of 31 March A procurement exercise has also been undertaken for a third party provider to clear the historic aggregation casework backlogs by the autumn of The Fund s database provider carried out an audit of how the system was being used in the autumn of 2017 and from them developed an specific data held by the Fund and thereafter to determine how the accuracy of this data can be checked. Once this exercise has been completed a plan to introduce an annual process will be developed. The historic deferred backlog has reduced from c2,500 cases to c500 and is on track to be eradicated by 31 March. The first phase of the training was completed in mid-january 2018 and follow up actions will be addressed in the spring. System developments, including the of the interface. The Fund will not have any historic backlogs and casework will be within normal levels. The administration database should be capable of processing the majority of casework without any manual intervention. Deferred Mar-18 Aggregation Dec- 18 Mar-19

19 automation and minimise manual intervention 5 Implement interfaces between the Fund s database and the administering authority s systems to streamline processes 6 Develop a suite of performance reports against the responsibilities set out in the Administration Strategy action plan containing a number of workstreams designed to maximise the automation of casework within the system. The plan includes staff training and system developments which will all take place during The administering authority is in the process of changing their back office systems which presents an opportunity for the Fund to feed into the design of this new system in order to facilitate an interface between the Pension Fund and the AA. This development would minimise transmission errors and delays. The Pensions Consultative Forum have been requested to attend workshops to review and update the Strategy with achievable and measurable requirements. introduction of ESS and MI will take place during the summer/autumn of Other developments, including the automation of aggregation casework, will also be implemented. Representatives from the Fund have identified the areas to be considered by the project and have attended a series of workshops on the design of the Council s system and have obtained agreement on the areas where interfaces can be implemented. The Fund will continue to work with the project team through to the new system being implemented in Oct-18. The workshops will commence in the spring of 2018 and will aim to have a revised strategy and performance reporting framework in place from Apr- 19. The interactions between the Fund and the Council will be achieved via interfaces wherever possible. Oct-18 Jan-18 Apr-19

20 The above projects will be implemented by the current resources within the Fund and consideration will be given to Other objectives that will be met by the actions outlined above include: Allow the Fund to demonstrate its compliance with the common and scheme specific data requirements in the Pensions Regulators Scheme Return in the autumn of 2018 Improve the quality of data to be provided to the Fund s actuary for the 2019 valuation Ensure that the Fund s data is available for use in the Pensions Dashboard

21 A quick guide to improving your data Information for trustees and scheme managers About this guide Trustees and scheme managers should review their data at least once a year and if there are any issues, put an improvement plan in place to address them. This guide will help you design an improvement plan, or assess the one you currently have in place. It is applicable whether your pension scheme is administered in-house or by a third party provider. The improvement plan should clearly set out the steps you are taking to improve your scheme data. Your plan will be unique to your scheme s circumstances. Your plan does not need to be complicated the amount of detail you need to go into will depend on the complexity of the issues you are trying to address. However there are certain elements we expect to see in any robust improvement plan, based on our experience of good practice. We expect all trustees and scheme managers to maintain accurate records. Failure to do so can put you at risk of failing to meet your legal obligations and we may take enforcement action where schemes are not meeting the standards we expect and are failing to demonstrate they are taking appropriate steps to improve their records. What are your improvement plan s objectives? In your plan, you should clearly set out the objectives you are trying to achieve by improving your data. If you have multiple objectives you should set them out in order of priority. Example objectives Addressing data issues which impact your ability to run your scheme effectively, including paying out benefits correctly, processing core transactions, ensuring a high standard of service for members, keeping costs manageable or meeting various legal obligations. These issues might typically be identified through your annual data review, an audit or the valuation process Improving members experiences, for example providing members with online access to their records continued... September 2017

22 Increasing automation or administrator efficiency, for example reducing service times as information is more readily at hand Preparing for the transition to a new administration system or a new administrator Improving employer confidence in the assessment of liabilities and the appropriateness of their contributions and recovery plans Improving data ahead of a de-risking exercise or a liability management exercise Outcomes You should set out the outcomes that will be achieved, based on your objectives, including how they will be measured and how long it will take to achieve them. Examples may include: Improved member service, for example fewer member complaints, and reduced processing times for events such as transfers More member communications issued accurately and on time Fewer assumptions in valuation data Improved administrator performance, for example an improvement in the time it takes to complete certain tasks Reduced administration costs Completion of administrative tasks, for example clearing any backlogs Updated and documented procedures which reduce the risks of errors recurring Improvement in data scores, which you should retest once you ve cleaned the data to demonstrate progress Scope and prioritising You should clearly set out the scope of your improvement work, in particular: which data is included or not membership types included how far back your improvement work will go You may need to take a phased approach if there is a lot of work required or it is particularly complex, or in light of your budget, prioritising the work in light of the objectives you re trying to achieve or the risks you re trying to mitigate. A quick guide to improving your data 2

23 As a general rule you should prioritise data which will have the greatest impact on member benefits some other examples are outlined in the table below. Data type Member type or profile Data source Scheme event Return on investment Technical solution Quick wins Personal information, which will improve your ability to communicate with members Specific data item which is a frequent cause of complaints Pensions in payment first How close members are to retirement Largest employer first (in a multi-employer scheme) The data you need for certain scheme events such as issuing benefit statements or valuations Issues which have the greatest impact on running costs Bulk automated resolution Known data issues which are relatively easy to rectify Breakdown of activities You should break down the activities your administrator will undertake for you as part of the improvement plan. For each activity, you should set out: the issue to be addressed the methodology to be used, for example member address tracing, pensioner existence checks, research of company employment records resource allocation who, how many working hours / days will it take any assumptions made, for example the number of records likely to need work, which members are covered and how any identified errors will be rectified timescales and target dates how you will know the task has been achieved (success criteria) A quick guide to improving your data 3

24 Remember: Improvement work doesn t end when the data is clean You need to ensure the data is fed back into your systems, and you should include follow-up activity in your plan, for example: updating payroll systems and member records communicating with members rectification work, for example if you identify overpayments or underpayments capturing and documenting changes to data and processes so future administration teams know what has been done embedding new processes and working methods to ensure improvements are maintained Dependencies You should identify any other work which might impact on your improvement work, particularly where data is changed or the same resources need to be used. This will help you identify potential sources of conflict, or opportunities to minimise burden, for example by reducing the number of times you ask employers for data, or by only writing to members once. Examples of other work that you may need to factor in could include valuations, member communication exercises, GMP reconciliation, year-end reconciliation, negotiating an administration contract, proposed de-risking exercises, or proposed scheme structure changes. Timeframes and timelines Your improvement plan must have a defined end date within a reasonable timeframe. More complex work can take a number of months so you should consider breaking it down into phases. Mapping work into a timeline helps with planning, in particular by identifying hard deadlines, and where additional resource may be required. Your timeline should clearly set out key milestones, reporting and decision points. It should also reflect the dependencies you have identified. Resourcing Plans should take account of available staff and financial resources. You should agree at the start whether the work will be delivered as part of ongoing business as usual administration or as a separately managed project, with additional budget and resource. If you are diverting resource from other work, you should set out what impact this will have for the scheme. A quick guide to improving your data 4

25 As well as the administrators resource, you should consider other parties you may need to obtain data from, for example employers (providing member information, employment and contribution history), HM Revenue and Customs (National Insurance numbers), members (dates of birth, addresses), tracing companies (address checks, existence checks), and advisers such as actuaries or lawyers. Governance and reporting Trustees and scheme managers are ultimately accountable for scheme record-keeping, and they need to have appropriate oversight of progress and the quality of the work delivered. They also need to be available to answer any queries the administrator has as the work progresses. You should agree roles and responsibilities at the outset, in particular those of the trustees or scheme manager and administrators. Your plan should set out who will make decisions, for example signing off on success criteria, or signing off on changes to the work (to the timeline, to resources and to budget). You should set out any discretions the administrator has. You should also set out how, to whom and when the administrator will report on progress. This should include reporting to trustees or the scheme manager but also other relevant parties, for example pension boards, employers or members. Depending on the complexity of work you may wish to have a range of other formal controls in place, for example a decisions/action log or a change control log. Ongoing data improvement Data improvement is a continuous process not a one-off exercise. Your engagement with data does not end when the improvement plan is delivered. You should regularly check the data you need to run an efficient and effective scheme, and make sure data is managed well on a day to day basis. You can find out more in our record-keeping quick guide. A quick guide to improving your data 5

26 Flowchart: designing your improvement plan Activity Who does this? Set objectives you want to achieve Trustees or scheme managers (supported by pension boards) Define outcomes and scope of plan Define activities, dependencies, timeline, resources and governance Typically administrators, working with trustees or scheme managers (supported by pension boards) Deliver Report Typically administrators Where can I find out more? Record-keeping quick guide at DB and DC schemes Record-keeping guidance at DC code of practice at DC guide to administration at Public service schemes Public service code of practice at The Pensions Regulator September 2017 You can reproduce the text in this publication as long as you quote The Pensions Regulator s name and title of the publication. Please contact us if you have any questions about this publication. This document aims to be fully compliant with WCAG 2.0 accessibility standards and we can produce it in Braille, large print or in audio format. We can also produce it in other languages.

27 Cheshire Pension Fund Local Pension Board Annual Report INTRODUCTION Welcome to the second annual report for the Local Pension Board (LPB) for the year ending 31 March The Board has continued in its important role of assisting the Administering Authority with the efficient management of the Fund and ensuring its compliance with regulations and best practice. This has been another challenging year for the Fund itself with increasing membership, increased scheme complexity and increasing scrutiny from the Pensions Regulator and the Scheme Advisory Board. The Fund undertook an in depth review of how its delivers its service and from the results of the review have commenced an ambitious programme of change for 2018/19 and beyond. The Board have assisted the Fund in developing key work programmes to meet the challenges outlined above and have received regular updates on key pieces of work such as the Fund s approach to improving data quality and meeting the requirements of the General Data Protection Regulation. The Board have also been monitoring the Fund s progress on developing the way that is delivers its service, including the development of the administration database in order to maximise automation of the casework. The Board receives a comprehensive set of standard performance information from across pensions which allow the Board to monitor the Fund s performance and make recommendations to the Committee about any necessary actions. The Board has met five times in the last year and members have attended joint training sessions with the Committee in order to maintain and develop knowledge and understanding in key areas which has allowed the Board to satisfy itself that the Fund has managed these key areas compliantly and effectively. Members of the Board also attend regular external events run by experts on the pensions industry both to help to maintain expertise but also to keep up to date with current issues facing the industry. The Board also maintain an overview of the work of the Scheme Advisory Board and its Sub- Committees so that it can ensure that the Fund is dealing effectively with the relevant issues at local level. The Board took part in the Scheme Advisory Board s survey of Local Pension Boards in the autumn of 2017 and was able to provide positive feedback to the SAB on the Board s own performance. Page 1 of 7

28 The Board places a great importance on being open and transparent. A wealth of information relating to the Board, including minutes of meetings, can be found on the fund s website using the link below. There is also a facility for members to contact the Board should you have any questions/issues they would like to raise: A summary of the work undertaken by the Board, along with information about the work plan for the year ahead can be found below. Peter Raynes Local Pension Board Chairman Details of Membership The Board consists of 5 members, 2 member representatives and 2 employer representatives as well as an Independent Chair. All members are unpaid volunteers. Further information, including biographies of each member is available on the website. Type Name Organisation Employer Adrienne Laing Bridgewater High School Employer Cllr Robert Bisset Cheshire West and Chester Council Member Geoff Wright UNISON Member Neil Harvey GMB Chairperson Peter Raynes Independent (non-voting) Summary of 2017/18 and plans for 2018/19 Below is a summary of key achievements during the year and the Board s plans for the year ahead. Performance Management Framework At each meeting the Board receives a Performance Management Framework (PMF). The PMF captures key performance information from across the Fund, including administration, finance, HR, complaints, debt recovery and feedback from external sources. The framework is updated on a quarterly basis and provides comparator information from prior quarters to allow the Board to determine the extent of any changes between the periods. The framework will satisfy a number of purposes: It allows the Board to monitor performance against the outcomes identified in the Fund s Business Plan. It provides supporting evidence to demonstrate compliance with regulations and best practice, and; It provides a focus for further improvements. Page 2 of 7

29 During the year the Board reviewed the structure of the framework and determine that it remained fit for purpose. Board members did request that an additional section be included within the framework to highlight the processes which will be followed once the Fund transfers assets to the LGPS Central Pool. The Board will review the framework on a quarterly basis and will make any necessary recommendations to the Pension Fund Committee as necessary in order to improve the performance of the Fund. Breaches Policy/Log The Board continues to have a critical role in the Breaches process. The Breaches Log is updated on a monthly basis with any new breaches identified. In the first instance Officers investigate the breach (seeking expert opinion as and when required) and make a recommendation to the Board advising them whether Officers consider that the breach should be reported to the Pensions Regulator. The Board then provide their own opinion within 3 days and the log is then sent to the Director of Governance who is the responsible person as set out in the breaches policy for a final decision. In addition to reviewing the breaches log on a monthly basis the Board also review the entire breaches log on a quarterly basis in order to identify any trends which require further investigation. The Breaches policy and Breaches Log are available on the Fund s website. There have been xx new breaches identified during 2017/18, the majority of which relate to late payment of contributions. The Fund have also amended processes within the administration database during the year which have allowed it to capture breaches relating to casework. Scheme Advisory Board The Board monitors the work of the Scheme Advisory Board and its Sub-Committees, to ensure that the Fund is dealing with the relevant issues as part of day to day business. During 2018 the SAB issued a survey for completion by both the Board and the Pension Fund Committee Chair independently. Both the Board and the Committee completed the questionnaire and were able to demonstrate the Board was well run and was adhering to the requirements expected by the SAB. As a result of undertaking this exercise the Board recognised that it did not have its own Risk register and immediately set about producing one. A draft Risk Register was presented to the Board at its meeting on 6 February The Pensions Regulator Code of Practice Page 3 of 7

30 The Board continue to monitor the Fund s progress in complying with the requirements of the Pensions Regulator and have received detailed feedback on specific areas as outlined below: Area Requirement Fund Approach Data Quality The TPR will be including specific questions about Data Quality in the 2018 scheme return The Fund has commenced a comprehensive programme of work in order to benchmark and cleanse the data it holds. The Fund is also transforming the way it received information from Employers, moving to a monthly system of obtaining information from the current annual process, which will allow queries to be resolved more quickly and will allow the fund to prevent non-compliant information from being received from employers. In addition, the Fund have commenced a development programme with its database provider in order to maximise the level of automation in the processing of casework. General Data Protection Regulation GDPR is applicable in the UK from 25 May 2018 The Fund has a comprehensive programme of work in progress in order to meet the GDPR requirements. The Local Government Association are developing key template documents for Fund and the administration database will receive an upgrade to ensure compliance. The Board received regular reports on both of the issues above throughout the year and will continue to monitor progress into 2018/19 and beyond. Ethical and Responsible Investing Each year the Pension Fund reviews its Investment Strategy Statement, which includes a specific Policy document on Responsible Investing. The Fund continued with its existing Responsible Investing training programme and during the year a number of sessions and meetings with both the Board and the Committee took place to ensure that all relevant investment issues and considerations were discussed and the views of members recorded. An assessment of the Fund s equity portfolio and its associated carbon footprint was considered during the year and steps were taken to allow Pension Fund members to actively engage with the Fund via the website on ethical and responsible investing issues. To improve transparency and openness, details of all investments held by the Fund are now published on the website every quarter. Early discussions have taken place with LGPS Central pooling partners to agree a common Responsible Investment and Voting policy in advance of assets transferring to the custody of the pool. Joint Chairs Meetings The Chairman of the Board and the Pension Fund Committee continue to meet on a quarterly basis to discuss common issues. This allows the Chairs to agree how issues should be taken forward thereby ensuring that the work of the Board complements and assists the Administering Authority, and avoids duplication of effort. Pensions Consultative Forum Page 4 of 7

31 The Pensions Consultative Forum work with the Fund to ensure that is delivers an efficient service for all stakeholders, with particular emphasis on administration and communication. The Forum s membership is made up of representatives from the main employers and employer groups within the Fund. As well as acting at the Chair of the Board, Peter Raynes is also the Chair of the PCF providing an important link between the Board and the Forum. The Forum will be key to assisting the Fund in developing new ways of working which will improve efficiency for both the Fund and Employers. Attendance at Committee Meetings Given that the role of the Board is to assist the Fund in ensuring compliance with laws and regulations, which extends to include assurance that the Committee is carrying out its functions effectively, Board members will attend Committee meetings in an observer capacity as required. Member Engagement The Board has a facility on the Fund s website to allow members to contact them with any questions. The Board received 3 questions from a pensioner member via this facility during the year on a variety of topics and provided a response to each one. 2018/19 Work Plan The Board will continue to monitor the Fund s progress in improving the data quality of the Fund and in meeting the requirements of GDPR. In addition, the Board will monitor progress on the various work strands designed to ensure that the Fund improves the efficiency of how it delivers the service going forward which includes critical developments to the administration database, changes to the way the team is structured and how the Fund interacts with its stakeholders. The Board will continue with its compliance role in ensuring that Fund documents are produced and updated in line with statutory and best practice guidance. Examples of such documents are the Statement of Accounts, the Funding Strategy Statement, Investment Strategy Statement, Breaches Policy, Administration Strategy and Communications Policy. The Board also undertake annual reviews of their own policies, such as the Terms of Reference and Code of Conduct Policy, to ensure that they remain fit for purpose. This will allow the Pension Fund Committee to concentrate on making decisions safe in the knowledge that the fund is compliant with statutory and best practice and that any areas for development will be highlighted to them by the Board. Attendance at Meetings The terms of reference for the Board state that there should a minimum of 2 meetings per year. However, at its first meeting members of the Board elected to meet a minimum of 4 times per year. There were xx meetings held during Page 5 of 7

32 The table below summarises the meetings which have taken place including attendance by members of the Board. 25-Apr Jun Jul Nov Feb-18 Members Peter Raynes Cllr Rob Bisset x Adrienne Laing Geoff Wright x Neil Harvey The meeting on the 6 June was dedicated to the review of draft Statement of Accounts for 2016/17 to ensure that they had been produced in accordance with statutory requirements and best practice. This is an important part of the Fund s governance process for the production of the Statement of Accounts. The meeting took place ahead of the Pension Fund Committee s own review of the draft accounts and provided assurance to the Committee that they could recommend the draft accounts to be presented to the Audit and Governance Committee. Skills and Development Activities The Board and Committee have again attended several joint training sessions during the year which, aa well as developing Board members knowledge, have also helped the Board to gain assurance that the Committee decision making processes are robust and properly informed, and are in accordance with regulations and best practice. Board members also attended a Stakeholder event which was delivered by the LGPS Central Pool and included an update on the pooling process, both locally and nationally, as well as setting out the vision for the new company. A summary of the training provided for the Board, including attendance, during is shown below. Date Topic Delivered by Attendees 7 July 2017 Investment Portfolio Review / De-risking Hymans Robertson Peter Raynes Neil Harvey Geoff Wright 22 September November LGPS Central Pool De-risking / Potential Investment Strategies Hymans Robertson Mercer Aon Hewitt Investment Consulting DCLG Programme Board members Hymans Robertson / Mercer Peter Raynes Neil Harvey Peter Raynes Neil Harvey Page 6 of 7

33 March 2018 Residential Opportunities De-risking and Future Investment Strategy M and G Mercer Geoff Wright tbc Review of the Absolute Return Portfolio Board members will also attend external conferences and seminars in order to maintain knowledge and also to keep up to date with current issues facing the LGPS. The events which Board members have attended include: CIPFA / Barnett Waddingham Local Pension Boards 2 year s On 28 June 2017 LGA Trustees Conference June 2017 PLSA LPB Seminar 11 July and 19 September 2017 LGC Investment Summit 6-8 September 2017 LGA Trustee Fundamentals Course 1 day in October, November and December 2017 LPB Autumn Seminar CIPFA/Barnet Waddingham 6 November 2017 Annual Pensions Conference CIPFA 22 November 2017 Budget The Board agreed a notional budget of 10k for to assist with its operation. This included costs for training, external advice, expenses and travel costs. In its third year of operation the Board incurred costs of XXk with XXk spent on training, XXk on travel and subsistence costs. If you would like to further information regarding the Cheshire Pension Fund Local Pension Board or have any questions please visit our website: Page 7 of 7

34 Local Pension Board 6 February 2018 Item 8 THE BREACHES LOG AND DEFERRED BACKLOG UPDATE Introduction 1. This paper provides the Board with a cumulative summary of the Breaches log for the period 1 April 2015 to 30 September 2017, including any identified trends. Breaches Log 2. In accordance with the Breaches Policy the Board, and the Pension Fund Committee (PFC), are required to review the Breaches Log on a quarterly basis in order to identify whether there are any trends that may indicate any serious failings or fraudulent behaviour. 3. As requested Board members are presented with a summary of the breaches log on a quarterly basis, rather than the detailed log itself. The summary will highlight any identified trends. The full Breaches Log (anonymised version) is available upon request, and is published in full on the LPB area of the Fund s website and so is publicly available. 4. A summary of the 134 breaches which were captured on the breaches log between 1 April 2015 and 30 September 2017 are set out in Appendix A. The appendix also provides a comparison of the breaches for the two 12 month periods of 1 April 2015 to 31 March 16 and 1 April 2016 to 31 March 2017, along with the 6 month period of 1 April to 30 September The Fund has not had to issue any Red (formal) reports to the Regulator as a result of the breaches identified. The three Amber (informal) breaches, which the Board have previously been informed of, remain the only reports that the Fund has issued to the Regulator. 6. In terms of repeat breaches there were thirty four employers who each paid their contributions late on more than one occasion. Although they are technical breaches, in that the funds were not received into the pension fund bank account by the 22 nd of the month, they do not require reporting to the Regulator as the contributions income have since been received by the fund, or is in the process of being received. 7. The majority of breaches included on the log relate to the late payment of contributions. This is due to the fact that late contributions are easy to measure and the Fund has robust and embedded systems for identifying them. 8. As the Board are aware, what has not been included on the Log up to this point are breaches relating to administration casework. Pension regulations dictate that pension funds are required to notify members of their rights and options when their circumstances change typically within 2 or sometimes 3 months from when the Fund was notified of the change. 9. For instance, where an employee leaves an Employer who is a member of the Fund they have the option to transfer their pension to their new provider, receive a refund or defer their pension. The Fund is required to notify the member of these rights within 2 months of being notified that they have left. 10. Members of the Board will recall that the Fund undertook a self-assessment against the Pension Regulators Code of Practice No. 14 Governance and Administration in Public Item 8, Page 1 of 2

35 Local Pension Board 6 February 2018 Item 8 Service Pension Schemes in Following on from this a Further Improvement Plan was developed in order to address areas where the Fund was not fully compliant. 11. This included a full review of Scheme Record Keeping and Disclosure Regulations, which was carried out during The output from these exercises was then used as the basis to review the key administration casework processes to ensure that they were compliant. The processes were also designed so that they included milestones which would allow the Fund to automate the reporting of breaches relating to administration casework. 12. Many of the reviews have now been incorporated into the live administration database and the Fund has been able to report on administration breaches relating to Leaver processes from July A small number of administration casework breaches have been identified for July (1), August (2) and September (5). The breaches relate to older casework which has been caught up in the Fund s casework backlogs. Such cases can currently only be identified once the case has been completed, providing two points from which the Fund can measure the performance. 14. The Fund would usually wait to receive full details of a case before completing the process and sending the notification letter containing all the necessary information for the member. However, as the Fund often receives incomplete information from Employers in order to complete casework this has led to a number of breaches. 15. The Fund is continuing to work with employers to address the issues arising from late notification of member changes, which is the key area of concern in terms of breach reporting, and overall operational efficiency. Whilst steps have been taken to mitigate the potential impact on individual scheme members, substantial improvements in the timeliness and accuracy of information flows between employers and the Fund are required if efficiency and service standards are to be improved and sustained., and the risk of serious regulatory breaches reduced. This is the focus of on-going investment in systems and technology and also engagement with employers through the Pensions Consultative Forum. 16. The Board are asked to note and comment on the summary of the Breaches Log. Recommendation The Board are requested to: Note and comment on the cumulative summary of the Breaches Log for 1 April 2015 to 30 September Item 8, Page 2 of 2

36 Comparison of Fund Breaches - 12 months ending 31 March 2016 to 12 months ending 31 March 2017 and the 6 months ending 30 September 2017 Local Pension Board 06-Feb-18 Item 8 Appendix A Number of Breaches Per Category: Number of Breaches Per Category: Number of Breaches Per Category: Contributions Year End Return Overpayment ABS Administration Total Contributions Administration ABS Pension Benefits Data Protection Total Contributions Administration ABS Pension Benefits Data Protection Total Breaches per month and per Category: Breaches per month and per Category: Breaches per month and per Category: