ANNEX 1

Areas identified in the Best Value Report:

•	Review the level & quality of the present CSL service and compare the current service against best practice service provision
•	Establish a specification that will meet the needs of all stakeholders 
•	Compare the cost of providing the specification
•	Consider, supported by evidence, how the specification should be provided after termination of current CSL contract on 31 March 2003
•	Carry out consultation exercise with stakeholders
•	Review the procedures used to handle complaints
•	Review process and cost of administering fire pensions and teachers’ compensation payments

There were 10 specific actions arising from these.

Action	Progress	
1.	Agree & Implement Pension Administration Development Programme, starting April 2003	Refer to Annex 2	
2.	Consult with Pensions Staff & Employing Bodies on the revised (draft) service specification for effective introduction from April 2003	Work is starting in January 2004 to set the specifications for Task Management   	
3.	Best Value Committee to confirm Option A strategy for in-house provision of service from 1 April 2003. Pension Fund Committee to approve at May 2002 meeting	Complete	
4.	Appoint Pension Fund Manager to strengthen management of pension function (including investment management). An appointment in Spring/Summer of 2002 is proposed subject to approval of the Pension Fund Committee at May 2002 meeting	Complete	
5.	Improve the levels of communication and quality of information given to all scheme members, and in particular: a. All scheme members who need information about transfers to the LGPS from other pension schemes and b. Members about to retire from the scheme.	Tied in with 2 above but we are looking to split out part of this for completion by 31 March 2004.	
6.	Improve the timeliness of the lump sum payment so that all recently retired members receive it within the time period specified in the new service specification. Improve the timeliness of the first pension instalment so that all recently retired members receive it within the time period specified in the new service specification.	This is dependent upon our receiving the information from the employer / department.  Currently paid within 10 days of receiving all documentation – review to confirm / change this in January 2004.	
7.	A formal complaints procedure and monitoring process should be incorporated into the service provision. This should be an item in the development programme.	Completion date, for showing complaints as a percentage of our total work moved from June 2003 to June 2004 since this is dependent upon Task Management. Internally we now have a complaints monitoring and review system.	

8.	Pension training for employing body HR staff should be introduced. This should be an item in the development programme.	On going –training has been delivered to some employers. We have also introduced a monthly newsletter to keep employers updated with changes to Local Government Pension Scheme.	
9.	Investigate the computerisation of the fire-fighters pension records as a matter of urgency and obtain appropriate funding from within the County in consultation with the Chief Fire Officer.	Completed.	
10.	Review the charges for Fire and Teachers pension administration and in consultation with the Chief Fire Officer and Director of Education revise charges for implementation with effect from 1 April 2003.	Charges for Fire Service have been renegotiated and will be implemented in April 2004.
Meeting scheduled January 2004 to discuss charges for teachers’ administration.	

Task	Current Status	Deadline	
PF16 - page 5

Status	
Review requirement for monthly payslip distribution		
	
Completed	
Review arrangements for fire pensions & teachers compensation administration incl. automation of fire pension records	Fire pension records are now loaded onto AXISe.

Discussion regarding administration of teachers’ compensation scheduled for January 2004.

	Completed

On going	
Determine and negotiate charges for fire & teachers admin to be implemented 1 April 2003 	New charges agreed for administration of fire pensions – effective April 2004.

Discussion about charges made for administration of teachers compensation scheduled for January 2004.

	Completed

On going	
Develop AXIS TASK for introduction from 1 April 2003	This target date has been pushed back because of the work arising from the development of the interfaces from SAP, document imaging and data cleansing prior to the 2004 valuation. We have rescheduled this to start in January with a completion date of March 2004.	
31.03.04
	
Scheduled for January 2004	
Actively manage frozen refunds & reduce numbers to national average	No longer applicable for the original reason, but we would want to treat this as a separate project at some future point.	
		
Develop automated interface from MIS and encourage development of interface from other large employers	The development of an automatic interface from the payroll records held in SAP to update the pension records has been much slower and more problematic than envisaged. Partly this was due to the delay in involving pensions staff in the process and the necessity to have ITNet programme more detailed requirements for the data transfer. We now have all the information back to November 2002 for all new entrants and the majority of starters for each month are loaded onto the pensions system. There are a number of errors and inconsistencies which need to be individually checked and validated. Errors in inputting information onto SAP have caused further problems, as some of the data received on the interface is inaccurate. Further work will be needed to get the amendment and hour changes interfaces working and, at present ITNet are developing a report to provide the information required for monthly leavers.
Oxford Brookes University have offered to be a test site, but no action has yet been taken.	

On going	

PF16 - page 6

Task	Current Status	Deadline	Status	
Introduce performance measurement and monitoring processes 	This function is dependent upon having AXIS task management system in place. Therefore the delay is in line with the delay in setting up of task management.	
30.06.04		
Develop performance indicators for medium term planning purposes	
As above.	
30.06.04		
Publish performance standards & indicators (to be included in annual report)	
Not yet started.	

30.06.04		
Introduce a formal complaints monitoring process	We have put a complaints monitoring system into place, however, until Task Management is introduced we will be unable to produce statistics showing number of complaints against work volumes. 
	
30.09.03	
On going	
Create staff training and professional development programme	To facilitate staff training we have reorganised the work to a functional basis this allows us to move team members between different functions. Responsibility for internal training has been given to a Senior Pensions Officer, who is spending time with each team member, producing guidance notes and checking work to ensure understanding and consistency.
Additionally 6 team members have started their qualification in pension administration at foundation level and 2 team members are undertaking their diploma in pension management.	
30.09.03	
On going	
Develop training programme for employing body HR staff	The focus of this training has been more towards HR staff at Oxfordshire County Council to pick up issues with the introduction of MIS. There has also been some training carried out in the Districts, but this needs to be formalised and extended. A monthly newsletter has also been introduced to keep staff updated of changes to Local Government Pension Scheme.	
30.09.03	
On going	
Cleanse and update AXIS data base liaising with scheme employers to ensure data is up-to-date	This is an, almost, continual process following the receipt of the annual returns from employers. The quality of information received is sometimes extremely poor, and this combined with employers treating pensions as low priority make resolving of these queries a slow and frustrating process.		
On going	
Develop annual benefit statements for active scheme members 	Not yet started, although we have identified an employer who would be willing to act as a test site.	
31.12.04		
Develop document image processing (DIP) and implement on a phased basis	Over 30,000 files have now been imaged and are loaded onto the pension system. These can now be viewed from the desktop. There are just over 1,000 still needing to be scanned. 
Completed files are now being scanned and indexed within the office.

31.03.04	

On-going	

BEST VALUE COMMITTEE

14 JANUARY 2004

ADDENDA

Item

9.	Oxfordshire Pension Fund Administration Best Value Review

Information by the Head of Finance requested at the pre-meeting briefing about the revenue savings arising from the implementation of the report recommendations:

1.	The claimed saving of £130k was based on an estimated budget of £578k for in-house operation in 2003/04 as against the cost of the external service at £708k. These figures need to be re-based to a Jan 2003 price-base. 

2.	The external service cost of  £708k was the pensions administration budget for 2001/02 (incl. £586k for the CSL charge). It is difficult to estimate what would have been needed for 2003/04 but, allowing for re-basing to Jan 2003 (two years), the figure would be £744k. This is not out of step with the review’s prediction of £770k for continued external provision.

3.	The revised estimated spend on pensions administration within the 2003/04 Financial Service budget is £623k (see attached). The estimated saving is therefore in the region of £121k. (£744k less £623k). 

4.	The saving is slightly less than the original estimate of £130k. However, it should be noted that we had to make certain spend assumptions, particularly on the non-staff budgets, in the absence of firm estimates that only CSL could have provided. Our assumptions tended to under-estimate the non-staff costs, for example, we have needed to supplement the staff training, postage and printing estimates produced at the time of the review.  Software licensing costs have also turned out to be higher than expected. Nevertheless, most of the claimed saving has materialised and this will be reflected in next years inter-authority cost comparisons.

Revised officer recommendation (c):

(to) refer the report to the Pension Fund Committee.