Meeting documents

Pension Fund Committee
Friday, 24 February 2006

PF240206-15

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ITEM PF15

PENSION FUND COMMITTEE – 24 FEBRUARY 2006

LOCAL GOVERNMENT PENSION SCHEME (AMENDMENT) (No 2) REGULATIONS 2005

Report by the Head of Finance & Procurement

Introduction

  1. The Local Government Pension Scheme (Amendment) (No. 2) Regulations 2005 came into force on 14 December 2005. They require each administering authority to prepare, maintain and publish written policy statements on the fund’s governance and communication arrangements.

  2. Under the regulations, the first policies are to be published before 1 April 2006 and revised policies published whenever there is a material change to that policy. The Office of the Deputy Prime Minister (ODPM) expect Authorities to submit a copy of their policy after 1 April 2006.

  3. The responsibility to prepare and maintain the policies rests with the County Council, as administering authority, although their full success will need co-operation of all employers within the fund.

  4. This report sets out the key issues, and seeks the Committee’s approval of the initial policies, as set out in Appendix 1 (download as .doc file) and Appendix 2 (download as .doc file).

    (Annex 1 - download as .doc file)

    5. Governance

  5. The Governance Policy as set out in Appendix 1 (download as .doc file)) to this report is a reflection of the current governance arrangements. No changes are currently suggested to these arrangements.

  6. The main point to note in agreeing the Policy Statement as set out inAppendix 1 (download as .doc file) is the clarification of this Committee’s terms of reference, which have been expanded from the summary version contained within the Council’s constitution.

    7. Communications

  7. In preparing the Communications Policy Statement contained in Appendix 2 (download as .doc file), scheme employers and the Beneficiaries Observer have been consulted, and been given the opportunity to comment on current practices and to make suggestions for the future.

  8. One response to the communication consultation was to ask for the County Council to define more clearly its role within wider consultation matters on new regulations. The draft policy defines the Administering Authority’s role as ensuring that all scheme employers are fully informed of proposed changes to the LGPS, so that they themselves are in a position to undertake whatever consultation they wish with their own employees. It is not seen as the role of the Administering Authority to consult directly with all scheme employees.

  9. The two main development areas in the proposed communications policy are regular quarterly newsletters and the development of electronic information systems.

    10. Newsletters

  10. As a result of the consultation in drafting the communications policy, it is proposed to move to the production of a quarterly newsletter for all scheme members. At present, and in accordance with Disclosure Regulations, ad hoc bulletins about LGPS changes are sent to active members following issue of new regulations. The summary of accounts leaflet distributed annually, provides another opportunity to give some more information about administration and details about the fund’s investments. The plan to issue newsletters on a regular structured basis will ensure that any regulation changes continue to be passed to scheme members within the statutory 3 month deadline. However, having a regular timetable will help with the structure, planning and management of the work as a result of these newsletters.

  11. Prudential Assurance Company Limited, which is the County’s chosen partner for AVC top up arrangements, has offered assistance to the County Council in printing and distribution costs for the newsletters. In exchange, future newsletters would include a tear-off portion about AVC services supplied by Prudential (information about the Prudential ‘AVC ‘ is routinely sent out with LGPS information so this offer does not provide additional Prudential coverage).

    12. Electronic Information

  12. The Local Government Pension Scheme, with other main public sector pension schemes, is on the edge of significant change. Not just the imminent proposed changes as mentioned in the report at item 11 on today’s agenda, but more substantial change over the next two to three years. Effective communication during periods of change is essential.

  13. Distribution of information to scheme members needs to be in a variety of media to reach as many members and employers as possible. To aid this, Pension Services need to develop ‘Pension Pages’ for the external County Council web site and also for the County Council’s intranet. Having information accessible at times when members want to read about their pension supports the structures in the communication policy. Additionally it will mean information will be available for prospective scheme members and their employers.

  14. Initial development of pension pages will involve an investment of time within Pension Services and the cooperation from the County IT web support team. Thereafter these pages and any links established will need regular maintenance to ensure information is available and up to date.

  15. Over time, seeking information about pensions from the internet will become regular practice and as that expectation grows these pages will become a primary source. In the long term it is expected that there will be a reduction in the number of enquiries being handled in Pension Services.

    16. Other Issues

  16. The Communications policy also reflects the existing communication channels. These include the regular pensions user groups, the annual Employers forum, ad hoc sessions run for individual employers, and the sessions run by the Prudential.

  17. Areas not currently covered within the proposed policy format include information exchange, service level agreements, data protection and freedom of information and statement of the expected formal role of the authorities within the fund. Data protection and freedom of information are covered under different overriding legislation and as the policy has so far covered broad subject areas specific reference has not been made to those matters.

    18. RECOMMENDATIONS:

  18. The Committee is RECOMMEND to

          1. approve the draft Governance Policy Statement as set out in Appendix 1 (download as .doc file);

          2. approve the draft Communications Policy Statement as set out in Appendix 2 (download as .doc file);

          3. authorise officers to enter a negotiated arrangement with the Prudential Assurance Company Limited to produce the quarterly pensions newsletter at a subsidised cost to the Council.

SUE SCANE
Head of Finance & Procurement

Background Papers: Local Government Pension Scheme (Amendment) (No 2) Regulations 2005

Contact Officers:
Sean Collins, Assistant Head of Finance Tel: (01865) 815411
Sally Fox, Pensions Services Manager. Tel: 01865) 816080

February 2005

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