Inscribe Inside this issue ensions and rocurement 1 2017 Year End Guidance 3 i-connect Update 4 Shared Cost AVCs / Salary 5 Sacrifice ension Checklist 6 2017/2018 Annual Meeting Slides and 7 Diary Date my pension ONLINE 8 re-launch Coming Soon... Employer 9 Self Service (ESS) The newsletter for employers within the Royal County of Berkshire ension Fund Winter 2016/17 Welcome Welcome to Inscribe the quarterly newsletter for employers within the Royal County of Berkshire ension Fund. Each edition of Inscribe contains the latest news and updates surrounding the Local Government ension Scheme. ensions and rocurement Any LGS employer that considers letting a service (commercial) contract to an independent service provider is likely to transfer its employees under a TUE arrangement. Whilst pensions are not covered by TUE regulations, the transferring scheme employer will need to consider the pension arrangements that will be available to their staff following the transfer of their employment to the scheme employer s preferred independent service provider. It is therefore vitally important that officers who have responsibility for or have involvement in best value procurement or other forms of potential outsourcing discuss with the Berkshire ension Fund the pension implications of outsourcing staff. Focus on...flexible 10 Retirement Awards News 12 Contact Us 13 We would like to wish our employers a very Happy New Year 2017 Local Local Government Government ension ension Scheme Scheme
Failure to consult with the administering authority at an early stage will create problems and delays during later stages of the process. At different stages in the procurement process pension issues will need to be considered. An information sheet concerning pensions and procurement and the risk of pension costs can be downloaded by following the link below: http://www.berkshirepensions.org.uk/downloads/file/249/pensions_and_procurement_ information_sheet Transferring staff - information sheet for Schools and Academies As a school or an academy you may consider ways in which you might deliver certain services differently e.g. cleaning, catering etc. This may involve transferring some of your employees to an independent service provider who operates in the private sector. It is highly likely that your non-teaching staff will be members of the LGS and so you will need to consider the pension implications of transferring LGS members to a private company. We have produced a briefing note containing further information about the actions you will need to take with regard to your employees pension rights prior to any transfer of their employment. This briefing note can be downloaded by following the link below: http://www.berkshirepensions.org.uk/downloads/file/254/briefing_note_for_schools_ academies_free_schools_and_university_technical_colleges_considering_service_ outsourcing 2
2017 Year-end Guidance In preparation for the 2017 year-end process we have provided revised Year-end 2017 Scheme Employer Guidance Notes. The guidance notes can be accessed through the link below: https://www3.rbwm.gov.uk/bpf/downloads/file/204/2016_year-end_guidance A copy of the accompanying year-end Excel spreadsheet is also attached: https://www3.rbwm.gov.uk/bpf/downloads/file/236/year-end_file_template_2017 The guidance notes have been designed to assist you as a scheme employer to meet your obligations under the Local Government ension Scheme (LGS) Regulations 2013 (as amended) when preparing to provide your year end data to the Royal County of Berkshire ension Fund for the scheme year ending 31 March 2017. The deadline for submission of your 2016/2017 year-end file will be 30 April 2017. Year-end Timetable 2017 31 March 2017 End of the Scheme Year By 30 April 2017 During 1 April 2017 to 15 June 2017 During 1 April 2017 to 15 July 2017 During 1 August 2017 to 15 August 2017 During 16 August 2017 to 31 August 2017 All year end files to have reached the ension Fund. The ension Fund to process year end files The ension Fund to process responses from scheme employers. The ension Fund to extract LGS member data to send to printers. Annual Benefit Statements issued to LGS members in line with statutory obligation. Each employer will be contacted in due course outlining the year-end process in full. In the meantime if you have any questions regarding year-end please contact hilip Boyton on 01628 796752 or e-mail philip.boyton@rbwm.gov.uk 3
i-connect Update i-connect is a secure data transfer service, provided by pension software providers Heywood. This service is in the form of a secure website that collects the data from an employer s payroll system via a csv file submission and, quickly and securely, transfers this data straight into our pension fund administration system, Altair, which is also provided by Heywood. The Royal Borough of Windsor and Maidenhead have been using i-connect since February 2016 and recently Reading Borough Council have also started to use i-connect from November 2016. As of the 31 December 2016 it has processed 1,436 starters, 814 leavers, 4,599 hours changes and 7,605 changes of address. We estimate this has collectively saved The Royal Borough of Windsor and Maidenhead and Reading Borough Council over 500 hours of administration. i-connect has also recently released two new features: 1. A Multi-ayroll rovider functionality that will allow payroll providers who deal with multiple employers of the scheme the ability to upload just one combined submission instead of one per employer 2. An on-line return, designed specifically for smaller employers, to allow the employer to input the data manually on the website rather than submitting a csv file. Some of the benefits of using i-connect include: No year-end return to complete Reduced need to complete pension forms Reduction in errors, therefore a reduced number of queries from the ension Team. Reduced transfer time Greater security of data Better quality data real time Could result in a reduction in your employer contribution rate Reduced risk of fines for non-compliance of statutory duties Better member experience If you are interested in finding out more information, please contact Steve Lyon, Technical Analyst, on 01628 796793 or e-mail steve.lyon@rbwm.gov.uk 4
Shared Cost AVCs / Salary Sacrifice A number of employers have recently expressed an interest in setting up a Shared Cost AVC (SCAVC) arrangement for their staff so that they can offer AVCs on a salary sacrifice basis. Robert Stormonth, ublic sector National Account Manager, rudential, has requested that we circulate the letter below to all of our employers to confirm their position on SCAVCs as a salary sacrifice arrangement. Dear all A number of employers have expressed an interest in setting up a Shared Cost AVC arrangement for their staff so that they can offer AVCs on a salary sacrifice basis. Whilst rudential is supportive of employers wishes to offer AVC contributions through salary sacrifice schemes, implementing this as a Shared Cost arrangement under The Local Government ension Scheme Regulations 2013, means that any such arrangement is not solely a matter to be agreed under the individual s Contract of Employment. It must also comply with Scheme Regulations and applicable pensions legislation. rudential does not currently facilitate such salary sacrifice arrangements in respect of AVC contributions but we are reviewing this and will update you with further information in this regard as soon as we have determined whether and how we can support such arrangements. These Scheme Regulations and pensions law requirements affect both the employer and the AVC provider. Before any such new salary sacrifice arrangements can be implemented in respect of AVC contributions, rudential must agree to the new arrangements as the AVC provider. To the extent that rudential discharges regulatory duties on behalf of LGS pension funds, it is also essential that we are appropriately notified of and agree to any salary sacrifice arrangements so that we do not inadvertently cause them to be non-compliant with their legal duties. We regret that rudential cannot be held responsible for any breaches, liabilities, errors, tax consequences or complaints if salary sacrifice arrangements have been implemented without our agreement. If, as an employer you have already implemented a shared cost salary sacrifice AVC arrangement which we may be unaware of, please email corporate.pension.enquiries@prudential.co.uk who will ensure that your arrangement is brought in scope of the changes currently being considered. Thank you for your patience and co-operation. Robert Stormonth ublic Sector National Account Manager, rudential Tel 01236 763486 / 07711 043672 robert.stormonth@prudential.co.uk 5
ension Checklist 2017/2018 As we are approaching a new financial year there will be some updates to our standard forms and factsheets. These will be communicated to you in due course however for ease of reference the updates will include: Updated employee contribution table for 2017/2018 Revised employer contribution rates for 2017/2018 50/50 Section factsheet Revision to Berkshire ension Fund forms and factsheets: LGS1B - Brief Guide to the LGS LGS10 - Election to opt-in to the LGS LGS10B - Election to re-join the MAIN Section LGS15A - Admission to the LGS LGS15C - Withdrawal from the LGS LGS5050 - Application for entry into the 50/50 Section of the LGS EST3 - Estimate request for an Active member EST4 - Estimate request for a Former member Other changes to be aware of: otential increase to the maximum amount of Annual ension which can be purchased through payment of Additional ension Contributions (ACs) Revision of Employee Contribution Rates - Template Letter Each year it is the responsibility of the employer to apply the appropriate contribution rate for each of their employees based on the contribution table for 2017/2018. The employer must then notify their employees of any revision in their contribution rate for the year ahead. To assist employers with this task we have provided a template letter which can be used for this purpose and is attached via the link below: http://www.berkshirepensions.org.uk/downloads/download/54/template_letter_for_ revision_of_employee_contribution_rate 6
Berkshire ension Fund Annual Meeting 2016 The Royal County of Berkshire ension Fund s Annual Meeting was held on Thursday 10 November at Maidenhead Town Hall. The meeting was chaired by Councillor John Lenton, Chairman of the Berkshire ension Fund anel, and Advisory anels. A copy of the slides from the meeting can be found on our website via the link below: http://www.berkshirepensions.org.uk/downloads/download/57/royal_county_of_berkshire_ pension_fund_annual_meeting_2016_presentation_slides Also in attendance were: Nick Greenwood, ension Fund Manager Kevin Taylor, Deputy ension Fund Manager hilip Boyton, ension Administration Manager Mark Norquay, Barnett Waddingham LL Annual Employer Meeting 2017...date for your diary Our 2017 Annual Employer Meeting will be held on Friday 17 March in the Council Chamber, Town Hall, Maidenhead. The meeting is open to all employers within the Royal County of Berkshire ension Fund. A full agenda will be made available nearer the time but will include; Review of Scheme Year 2017 Year-end rocessing Update from the Actuary An invitation to this event will be issued under separate cover to all employers shortly. 7
New Year, New Look - my pension ONLINE re-launch Our new look member self service facility - my pension ONLINE will be launched on 1 March 2017. my pension ONLINE is an internet based application which enables scheme members to securely access and update their own pension details online via the Royal County of Berkshire ension Fund website. The new-look my pension ONLINE will feature a new logo and new functions. What can members use my pension ONLINE for? erform benefit calculations; View / update personal details; View financial details; erform benefit calculations; Access all relevant forms; Access all publications, such as your Annual Benefit Statements, Scheme Guides, Newsletters and Factsheets. Once the new look my pension ONLINE service goes live this will be communicated to all employers. Special edition newsletters will be issued to all active and retired scheme members in April 2017 to advertise the relaunch of our online service. 8
Coming soon... ESS In an effort to improve efficiency for both the ension Fund and scheme employers the Administration Team aspires to introduce Employer Self Service (ESS) from April 2017 that is free of charge and for all to use. ESS will enable scheme employers to view and amend where permitted their employees data remotely and securely, using internet based technology. Users, subject to appropriate permissions granted by the Administration Team, will access the following facilities: New employment creation Update of general information (for example change of address, update of marital status) Update of part-time hours and weeks Notification of leavers Benefit projector Documentation Reporting Submission of interface files 9
Focus on... Flexible Retirement In each issue of inscribe we will focus on a particular area of the LGS regulations in more detail. In this issue we focus on Flexible Retirement. Q: What is Flexible Retirement? A: Flexible Retirement allows a scheme member who has attained the age of 55 to draw all or part of their retirement benefits whilst continuing in their employment on reduced hours or salary grade. Q: What do the Regulations say? A: Regulation 30(6) An active member who has attained the age of 55 or over who reduces working hours or grade of an employment may, with the Scheme employer s consent, elect to receive immediate payment of all or part of the retirement pension to which that member would be entitled in respect of that employment if that member were not an employee in local government service on the date of the reduction in hours or grade, adjusted by the amount shown as appropriate in actuarial guidance issued by the Secretary of State. Q: What is the Criteria for Flexible Retirement? A: For a member to be able to retire on flexible retirement grounds all of the following criteria must be met: i. The employer consents; ii. There has been a reduction in hours, or there has been a reduction in grade. Q: Will the benefits be reduced? A: Benefits taken under the flexible retirement provisions will be subject to reduction if drawn earlier than the member s Normal ension Age. However, the employer can choose to waive all or part of the reduction. Q: Will there be a cost to the Employer? A: In some cases there may be a cost to the employer as a result of flexible retirement. If the member is retiring earlier than their Normal ension Age there is a strain on the Fund for releasing the pension benefits early (this is known as a strain cost). In a lot of cases this strain cost is covered as a result of the early retirement reduction that is applied to the member s pension benefits if they are released early. The employer can choose to waive all or part of the reduction providing they pay the extra strain costs arising to the ension Fund. When dealing with a flexible retirement request it is advisable to contact the ension Team in the first instance to request an estimate. We can then calculate in advance the value of the member s pension benefits and the cost (if any) to the employer. You can request an estimate by completing form EST3 (attached below) and forwarding this to info@berkshirepensions.org.uk https://www3.rbwm.gov.uk/bpf/downloads/file/39/est3_request_a_pension_ estimate 10
Q: What paperwork do we require from the employer? A: If a member is granted flexible retirement we will require the relevant paperwork to be forwarded to the pension team. We require completion of form LGS15C - Leaving the LGS with details provided up to the day before the reduction in the member s hours or grade occurs. For example if the member s flexible retirement took effect from 1 April 2017 the date of leaving for pension purposes would be 31 March 2017. We also require completion of form LGS15A - Admission to the Scheme. In this scenario the members start date for pension purposes would be from 1 April 2017 (the effective date of the hour change or reduction in salary). Both of these forms must be submitted to the ension Team directly. Q: Is there a limit to the amount of reduction in hours or grade? A: Under the LGS Regulations there is no specific limit to the amount of hours or the pay grade that the member has to reduce by. This would be at the employer s discretion. Q: Does the member have to draw their pension under Flexible Retirement? A: Yes, under flexible retirement the member draws the pension they have built up to the day before their hours or grade reduce. They do not have the option to defer their pension to a later date. 11
Berkshire ension Fund Wins European Award The Royal County of Berkshire ension Fund has won the prestigious Investment and ensions Europe award for Emerging Market Investment for the fourth time in seven years. The award was announced by Investment and ensions Europe at its annual awards ceremony on Thursday 1 December. The Berkshire Fund also reached the finals in the Best ublic Sector ension Fund and the Alternative Investments categories. Deputy Mayor Councillor John Lenton, who chairs the Fund, said he was proud the Fund had received at least one national or international award in each of the last nine-and-a-half years. edro ardo, Investments Manager - Royal County of Berkshire ension Fund, accepts the award for Emerging Market Investment from Nacho Font, CFA Director, EMEA Business Development American Century Investments He said: I congratulate Nick Greenwood, our ension Fund Manager, and all of our team on this latest award, adding to the many the Fund has received in the last nine-and-a-half years. The Investment and ensions Europe awards are considered to be among the most prestigious as they are open to all ension Funds in Europe. The Royal County of Berkshire ension Fund has more than 60,000 members and provides retirement services for the employees of the Berkshire unitary authorities and nearly 300 other public bodies in the county. It is managed by the Royal Borough of Windsor & Maidenhead on their behalf. ensions Age Awards 2017 The Fund has also been short-listed for three awards by ensions Age magazine in the following categories: ension Scheme Communication Award ensions Administration Award Best Investment Strategy Award The ensions Age Awards, which are now in their fourth year, are open to ension Schemes and ension roviders across the UK. The awards are independently judged and the winners will be announced at the ensions Age Awards on Thursday 23 February 2017 12
Contact Us If you would like to discuss any items contained in this newsletter please do not hesitate to contact us on the numbers below: Kevin Taylor Deputy ension Fund Manager 01628 796715 kevin.taylor@rbwm.gov.uk hilip Boyton ension Administration Manager 01628 796752 philip.boyton@rbwm.gov.uk Sandra Rice Deputy ension Manager 01628 796743 sandra.rice@rbwm.gov.uk Joanne Brazier Assistant ension Manager 01628 796754 joanne.brazier@rbwm.gov.uk Steve Lyon Technical Analyst 01628 796793 steve.lyon@rbwm.gov.uk Royal County of Berkshire ension Fund Minster Court, 22-30 York Road, Maidenhead, Berkshire, SL6 1SF Helpdesk: 0845 602 7237 (lines are open Monday to Thursday 8:30am to 5:00pm and Friday 8:30am to 4:30pm) Email: info@berkshirepensions.org.uk www.berkshirepensions.org.uk 13