THE ROLE OF THE SCHEME EMPLOYER

THE ROLE OF THE SCHEME EMPLOYER

RESPONSIBLE AUTHORITY DCLG ADMINISTERING AUTHORITY RBWM SCHEME ADVISORY BOARD NATIONAL THE PENSIONS REGULATOR SCHEME MANAGER PENSION FUND PANEL PENSION BOARD PENSION FUND OFFICERS AUDIT AND SCRUTINY RBWM COUNCILLORS ASSISTS SCHEME MANAGER FINANCE AND ADMIN PENSION FUND ADVISORY PANEL OTHER EMPLOYERS SCHEME EMPLOYERS MULTIPLE NUMBERS A1

The LGPS Regulations 2013 (as amended) The LGPS (Transitional Provisions, Savings and Amendment) Regulations 2014 (as amended) The LGPS (Management and Investment of Funds) Regulations 2009 (as amended) Defined Benefit versus Defined Contributions Funded versus Unfunded Contracted-Out A2

The Public Service Pensions Act 2013 The Public Service Pensions (Record Keeping and Miscellaneous Amendments Regulations 2014 The Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013 The Occupational Pension Schemes (Miscellaneous Amendments) Regulations 2000 The Finance Act 2004 Part 4 A3

Established under Part 1 of the Pensions Act 2004 Educate, Enable, Enforce Codes of Practice Governance and Administration of Public Sector Pension Schemes Code 14 Compliance and Enforcement Policy A4

32 occasions in the LGPS regulations where a scheme employer has a statutory obligation Statutory policy, recommended policy, employer decision Current and former regulations Local Discretion National Scheme See table on pages 10 to 12 B1

Template provided Guide to completing a policy statement available Compulsory policies (1 5) Regulation 60 Recommended policies (6 10) consistency of approach Do you have a policy? Have you published it? Have often do you review it? B2

Scheduled bodies County Councils/Unitary Authorities District/Borough Council Fire & Rescue Authority FE & HE Corporations Academies/Free Schools/UTCs Housing Associations Designation bodies Town/Parish/Community Councils Admission bodies Admitted via admission agreement Other Educational Institutions Voluntary/Foundation/Foundation Special and Federated Schools and other Technical Institutes B3

Pensions not part of TUPE Outsource service contract Admission agreement or broadly comparable pension scheme Include Pension Fund at initial decision Confirm service to be outsourced Proposed contract start date Proposed length of contract Details of all LGPS eligible staff involved in transfer Obtain actuary s report employer contribution rate/bond/guarantor Decide on an open or closed agreement Provide all pension details at tender stage include pension costs to be met by contractor B4

Select successful bidder Confirm contract arrangements with Pension Fund Template admission agreement document circulated to all parties Scheme employer Successful bidder Administering Authority Admission agreement signed off ahead of contract start date Must include employer policy statement, pension administration SLA and bond details where required 1 copy to be retained by each party to the agreement B4

Last active member leaves the Scheme Cessation valuation undertaken Exiting payment Bond/indemnity/guarantor On-going or cessation basis Related employer Extended repayment period Suspension for up to 3 years if likely to reemploy active members again B5

Ill health retirement Employer decision The role of the IRMP Tiers 1 and 2 Tier 3 Review of decision Determine if gainful employment now held (decision 17) Decide whether to recover any overpayment (decision 16) Decide whether a suspended tier-3 member is unable to obtain gainful employment (decision 19) Release of deferred benefits (decision 18) B6

Early retirements Redundancy Efficiency Flexible Voluntary Compassionate Capital costs (aka strain costs) Waiving of actuarial reduction on compassionate grounds (decision 28) B7

Dealing with complaints Internal Dispute Resolution Procedure (IDRP) Formal 3-stage process Appoint an adjudicator at stage 1 Decide procedure to be followed by adjudicator (decision 21) Decide whether to extend 6 month period for lodging an appeal (decision 20) B8

Forfeiture of benefits Whether to apply to the Secretary of State for a forfeiture certificate (decision 22) Whether to direct that benefits are to be forfeited (decision 23) Whether to direct interim payments out of pension fund pending final decision (decision 24) Whether to direct payment or partial payment of a refund to a relative/dependant (decision 14) Whether to recover from pension fund any monetary obligation (decision 25) Treason and imprisonment and the GMP (decision 26) B9

And finally Bulk transfer payments (decision 27) Whether to allow a member to select final pay period for fees to be any 3 consecutive years in last 10 (decision 29) Whether to allow late application to convert scheme AVCs into a membership credit (decision 31) Shared Cost AVCs (decision 32) B10

Regulation 59 of the LGPS Regulations 2013 Administering Authority and Scheme employers to have regard to strategy when carrying out Scheme functions Matters to be considered: Procedures for liaison and communication Establish levels of performance Compliance with statutory requirements Procedures for improving flow of communication Circumstances for issuing notices of unsatisfactory performance Procedures for producing performance statistics C1

Circumstances for issuing notices 1 Additional costs incurred as a result of a Scheme employer s underperformance 2 Failure by a Scheme member to make payment of contributions within the statutory deadline 3 Failure by a Scheme employer to submit monthly contribution return within statutory deadline 4 Failure to settle invoices relating to capital costs within prescribed deadline 5 Failure by a Scheme member to notify the Pension Fund of a member s retirement resulting in late payment of retirement grant 6 Persistent failure by a Scheme employer to meet deadlines set out in pension administration SLA C2

Agreement between Administering Authority and Scheme employers Duties general Duties specific Key Performance Indicators (KPIs) Notification of new starters Notification of contract changes Notification of leavers (inc. retirements) Submission of year end data Monitoring and reporting: Stewardship Report Third party contracts C3

Under 75 years of age Contract of at least 3 months duration Scheduled bodies Membership compulsory from day 1 (opt-out) Designation bodies and Admission bodies where employer has designated employee, or a class of employees to which they belong, as being eligible for membership of the Scheme (decision 11 or 12) Other bodies deemed, for the purposes of the LGPS, to be in the employment of a Scheduled, Admission or Designation Body. C4

Contractual enrolment comes before Automatic enrolment All eligible employees must be contractually enrolled to the LGPS from day 1 LGPS is a qualifying scheme for AE purposes Designation bodies not offering LGPS for all employees will need to provide an alternative Keep monitoring the workforce Notify the Pension Fund of opt-outs especially when opt-out occurs in first 3 months of membership C5

9 salary bands Employer determines rate (decision 13) Actual pay Reductions in pay Each job assessed separately MAIN and 50/50 Reasonable and consistent Re-assess during the year C6

Rates & Adjustment Certificate Triennial Valuation Variable Deficit recovery payments Set a rate to meet the funding balance 1/3 rd employee 2/3 rd employer Pooling of employers C7

Statutory 19 day deadline Completion of prescribed contribution return Guide to completing return is available Complete all relevant fields Submit to lgps@rbwm.gov.uk Third party payrolls Contribution reconciliation Late notices The Pensions Regulator C8

Regulation 20 defines the meaning of pensionable pay What is pensionable pay? What is excluded from pensionable pay? What else is specified by the employer in an employee s contract of employment as being pensionable? (decision 15) Regulation 21 defines the meaning of assumed pensionable pay C9

Still required to calculate pre 1 April 2014 benefits Based on definition within previous regulations Non-contractual overtime!! Last 365 days Best of the last 3 years Best 3 years average in 10 C10

What is year-end? Importance of a year-end reconciliation Timescales: 31 March 2016 The end of the Scheme year By 30 April 2016 All year-end files to have reached the Pension Fund During 1 April to 15 June 2016 Pension Fund to process year-end files During 1 April to 15 July 2016 Scheme employers to respond to year-end queries within 2 weeks During 1 April to 31 July 2016 Pension Fund to process responses from Scheme employers and issue data to Actuary During 1 August to 15 August 2016 Pension Fund to provide Valuation data to the Actuary and extract LGPS member data and send to print During 16 August to 31 August 2016 Annual Benefit Statements issued to LGPS members in line with statutory obligation C11

Encrypted data submitted in real time No more paper forms or spreadsheets No more year-end No data errors or miskeying of information No more monthly contribution spreadsheets Monitors and flags-up auto-enrolment issues Maintains data in line with statutory rules Reduces the risk of being fined by The Pensions Regulator C12

The Benefits of i- Connect?

Benefits of i-connect Time / Cost Reduced Payroll Admin Reduced Pension Admin Possible Reduction in Employer Contribution Rate Validation at point of submission Reminders sent Governance / Risk Secure Transfer of Data Fulfils AE Requirements TPR Requires Greater Data Transfer Reduced errors

What is I-Connect? O Web-based Secure Data Exchange Software O Sits between your payroll system and our pension system O Created by Heywood, provider of our pension admin system Altair O Employer and Pension Fund to pay annual licence

How does it work? The employer extracts monthly csv file from payroll system The csv file is uploaded to i-connect. i-connect will encrypt data and compare to previous months return You will need to provide an additional spread sheet sent to us for leavers. i-connect sends data direct to Altair. Highlights any work required

What currently happens? Data extraction usually mix between payroll reports and manual input Manual input is labour intensive. Post is a slow and insecure method of data transport. Data sent to pensions by post or email Received by pensions, we interpret each piece of post and set up relevant tasks

List of benefits No need to complete pension forms No year end return to complete Validation of data earlier in the process Reduce manual errors Reduced transit time Reduced number of queries from pensions Greater security of data Better quality data Reduced employer contribution rate Reduced risk of fines for noncompliance of statutory duties Fulfils Automatic Enrolment requirements Better member experience

How long to get started? O Minimum of 2 months O Set up payroll reports O Sign contracts O Data match O Sort out any issues O RBWM are looking at this at the moment O Not set up yet, issue with payroll reports O Jeanette Hambleton and Jacqui Warne

Designated pension liaison officer State of policy concerning communications Inscribe - Scheme employer bulletin Global emails Internet/Intranet Newsletters The Quill and The Scribe Member self-service Employer self-service What else would you like to see? D1

www.berkshirepensions.org.uk Dedicated scheme employer section: All standard forms Scheme guides FAQs General guidance Links to other information and sites Do you use the website? Set as a favourite Think website first ask questions second What else would you like to see? D2

The Pension Fund provides all of the following (and more) for its scheme employers: Admission bodies: A guide for employers Admission agreement template Employer s guide to completing a statement of policy with regard to discretions Statement of policy template Employer training guide to administering the LGPS Inscribe : A scheme employer newsletter Completing contribution returns: An employer s guide Year end procedures: Scheme employer guidance notes Trade dispute absences: A scheme employer guide Options to pay back contributions: Actions to be taken by scheme employers scheme member guide and letter templates A guide to early retirement costs Don t forget http://www.lgpsregs.org/ Payroll and HR guides D3

TRAINING NEEDS ANALYSIS SCHEME EMPLOYER STATUTORY OBLIGATIONS