ITEM PF17
PENSION FUND COMMITTEE – 14 SEPTEMBER 2007
AMENDMENT (No 3) REGULATIONS
Report by Head Of Finance & Procurement
Introduction
1. In May 2007 this Committee received a report (Communication Policy), which referred to Draft (Amendment) (No 2) Regulations 2007. These Regulations proposed an administration strategy covering both communication and service levels between the administering authority and fund employers.
2. Statutory Instrument (SI) No 1561, which came into force on 30 June 2007, has clarified that the Regulation covering the Communication Policy will remain separate from the Regulation setting out the issues for inclusion within any pension administration strategy.
Communication Policy
3. Due to the possibility of the communication policy being incorporated into the administration strategy, the annual review of the communication policy was delayed. The above Regulations have now clarified that the communication policy will remain a separate document from the administration strategy.
4. The policy review has now been carried out and no changes to the communication policy are proposed. The current arrangements will, with the exception of additional meetings, incorporate distributions of information about the new look scheme.
5. A copy of the policy is attached at Annex (download as .doc file).
Administration Strategy
6. The regulations detailed in the introduction to this report allow administering authorities to put in place an administration strategy to contain such matters as:
· Procedures for liaison and communication with employing authorities. · The establishment of levels of performance which the administering authority and fund employers are expected to achieve in carrying out their functions under these regulations by: · The setting of performance targets · Agreements about levels of performance, or · Such other means as the administering authority considers appropriate. · Procedures, which aim to ensure that the administering authority and fund employers comply with statutory requirements and any agreement about levels of performance. · Procedures for improving the communication by the administering authority and the relevant employing authorities to each other of information relating to those functions. · Circumstances whereby the administering authority, in its opinion, has incurred additional costs which should be recovered from a fund employer because of that employer’s level of performance in carry out its functions under the Regulation.
7. The Regulations state that when an administration strategy is first published, and when any subsequent change is made, a copy must be sent to each relevant employing authority and to the Secretary of State.
Charges Arising from the Administration Strategy
8. The Regulations allow the administering authority to levy a charge, on employing authorities, in instances where, in their opinion, additional costs have been incurred because of that employing authority’s level of performance.
9. Any written notice to the employing authority (including Oxfordshire County Council as a scheme employer) will have to include the reasons for forming this opinion; the amount of additional costs attributable to that authority’s level of performance and the base on which it is calculated.
10. Where an administration strategy is in place any charges reference should also be made to the relevant provisions within that strategy.
11. In cases where the administering authority requires payment from an employing authority, the administering authority will also be required to pay its fair share towards the cost.
12. Additionally, the administering authority will be required to pay any costs due to the fund which are incurred because of its level of performance in carrying out its functions under these Regulations.
Issues for Oxfordshire Pension Fund
13. A service level agreement was put in place prior to the move to Shared Services. This existing document gives a basic outline of the document needing to be prepared for the administration strategy.
14. Fund employers were told about the introduction of the document at the last pension fund forum and copies were circulated to each fund employer. Comments about the service level agreement and performance have been invited from employer representatives at the pension user group, although nothing has yet been raised.
15. However, these arrangements have, to date, been fairly informal given the problems in both altering reporting processes and producing statistics following the move to Shared Services. Loss of experienced staff has also had a major impact upon the team’s ability to improve performance and reduce the backlog of work.
16. Employer engagement with the introduction of a service level agreement has been disappointing. However, given the challenges that the team have dealt with over the past months, this service level agreement has not been actively promoted.
17. Putting new arrangements in place will be more challenging for the team when taking the above issues into consideration. However, in the long term, this will provide a better structure and focus for the delivery of services.
Timetable for Implementation
18. The provision within the Regulations requiring administrative authorities to record their intention to introduce an administration strategy, by December 2007, has been removed.
19. Therefore the proposed timetable is:
September 2007 – November 2007 – draft strategy and distribute to fund employers for comment.
November 2007 – January 2008 – finalise strategy
February 2008 – report to Committee
April 2008 – introduce strategy
RECOMMENDATION
20. The Committee is RECOMMENDED to
(a) endorse the review and continuation of the current communication policy; and
(b) endorse the introduction of the administration strategy.
SUE SCANE Head of Finance & Procurement
Background papers: Draft Local Government Pension Scheme (Amendment) (No 2) Regulations 2007 The Local Government Pension Scheme (Amendment) (No 3) Regulations 2007 Contact Officer: Sally Fox, Pensions Services Manager Tel: 01865 797111
September 2007
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