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ITEM PF11

PENSION FUND COMMITTEE – 27 MAY 2005

BEST VALUE & AUDIT COMMITTEE – 9 MARCH 2005

BEST VALUE REVIEW OF OXFORDSHIRE PENSION FUND ADMINISTRATION – IMPLEMENTATION

Report by Head of Finance & Procurement

1. We have previously reported to this Committee on 15 January 2003 and 14 January 2004. These reports detailed the areas reviewed as part of Best Value and the ten specific actions arising from these. These are shown at Annex 1.
2. One of the ten specific actions was to agree and implement a development plan over a two-year period from April 2002. The plan was agreed but implementation of the proposed developments did not start until just prior to the cessation of the contract with Liberata and the relocation of the Pensions Services team into County Hall. An updated version of the development plan is shown at Annex 2.

The Past Year

3. The report submitted last year identified action points for 2004 as:
4. Improving the level of communication and quality of our information to scheme members

• Work has started on this in that we are reviewing paperwork in line with changing regulations and / or procedures.
• We have issued a bulletin to members on proposed scheme changes.
• An email box has been setup for members to contact pensions and another has been setup in conjunction with HR specifically for comments to be made about the proposals for the new scheme in 2008.

5. Improving the timeliness of lump sum payments to all recently retired scheme members

• Payments are made promptly. The issue which would prevent timely payment is late receipt of information from the employer and during this year particular emphasis has been placed working with employers to ensure timely submission of information.

6. To extend training for employing body HR staff

• A monthly newsletter has been set up to cover both topical pension issues and particular administration / training issues.
• There has been little response from employers to suggestions of formalised training but, particularly with current and proposed changes to the scheme, there are more requests for ad hoc training sessions.

7. To review charges for administration of teachers’ pension administration

• Current charges have been reviewed and found to be reasonable.

8. Production of Annual Benefit Statements

• These are currently being issued and distributed.

9. The work of the past year has been concentrated within the specific areas of:

Work on the valuation took over particularly as we found that there was a huge amount of information not previously passed to pensions which needed to be processed before sending the data to the actuaries. This was as a result of changes in working practices with the introduction of SAP.

10. This did result in our taking the decision to delay the implementation of task management.

The Coming Year

11. Our focus for 2005 is geared around processes, standards and monitoring of work. The benchmarking carried out to date has been useful but this year we will be taking part in a new benchmarking initiative to look at processes and how they compare to best practice. This will lead to improvements within our service specification.
12. Work is to continue in improving our communications with stakeholders and our communication strategy will be submitted the Pension Fund Committee in May. We aim to provide more regular bulletins to scheme members particularly to cover issues raised by current and proposed changes to the scheme.
13. Now that SAP interfaces are up and running we can develop interfaces with other scheme employers.

Budget

14. Operating costs for 2003/2004 were £632,000, which was a reduction on the previous charge (from Liberata) of £871,000. However this saving was difficult to sustain since vacancies had to be carried and did not allow us fund necessary changes. Therefore the administration budget for 2004/2005 was £740,000, which included some one off additional resources to deal with the valuation work. This has allowed more flexibility and still keeps Oxfordshire Pension Fund within the median range for benchmarked costs.

Conclusion

15. With the exception of task management which will formalise our service standards and provide more management information we have now reviewed all areas specified under the best value review.
16. As a whole the section is less insular and more aware of best practice in other organisations, more focussed on service improvement and the resulting cost implications. All of which are the foundation to now undertake a full process review.
17. Pensions administration submits a business plan and budget annually to the Pension Fund Committee for approval.

RECOMMENDATIONS

18. The Best Value & Audit Committee is RECOMMENDED to:

1. agree if and when there is a need to report back to the Committee on further progress;
2. identify whether there are any matters in the report which should be drawn to the attention of the Executive Member; and
3. refer the report to the Pension Fund Committee.
   
   

SUE SCANE
Head of Finance & Procurement

Background papers: Nil

Contact Officer: Sally Fox, Pensions Services Manager 01865 816080

February 2005

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