Agenda item

This report (LPB6) is the latest in the series of reports to the Pension Fund Committee and this Board on the Fund’s approach to employer management. It sets out the key issues discussed with the Pension Regulator from the meeting held in London during December and includes a copy of the latest improvement plan which looks to ensure we can meet our regulatory requirement to issue annual benefit statements to all active and deferred scheme members by 31 August 2018.

The Board is invited to note the latest position on employer management and the current improvement plan and to offer any comments to the Pension Fund Committee.

The Board considered the latest in a series of reports to the Pension Fund Committee and this Board on the Fund’s approach to employer management (LPB6). The report set out the key issues discussed with the Pension Regulator at the meeting held in December and included a copy of the latest improvement plan which looked to meet the regulatory requirement to issue annual benefit statements (ABS) to all active and deferred scheme members by 31 August 2018. The Board was invited to note the latest position on employer management and the current improvement plan and to offer any comments to the Pension Fund Committee on 9 March 2018.

The Board established the following:

-       That it was for the Pension Fund Committee to decide if there had been a material breach of the pension regulations or not and if it was the former, to report the Authority to the Pension Regulator. It was also within the powers of Local Pension Boards to do the same;

-       In response to concerns about the safety and security of the iconnect system, the Board learned that the Chairman of Pension Fund Committee shared its concerns and was keen to explore it further. Moreover, he was keen to use the Board’s expertise in order that more detailed questions could be asked, thereby establishing the relevant risks. If required, the Committee could then instigate a proper mitigation plan. The Board therefore AGREED that a report raising the Board’s concerns regarding cyber security be circulated to the members of Pension Fund Committee prior to the next meeting of the Committee on 9 March 2018, with a view to the possibility of this issue being added as a risk on the Committee’s Risk Register;

-       If a decision was made to embark on iconnect as a solution, a 12 – 18 month lead time would be required before iconnect became mandatory, to ensure sufficient planning and implementation time for the employers and OCC. Sean Collins accepted that greater two-way conversations were needed with the employers than in the past to facilitate change and reduce issues with data submissions. Sally Fox reported that currently there had been little response from the majority of employers to communications from the Pension Team. The Employers Side acknowledged this point but highlighted the pressures facing all employers, and the capacity challenges facing all, but in particular facing some of the smaller employers. Sally Fox stated that some employers had already decided that they would not wish to utilise the iconnect system and this had been accepted for the time being on the proviso that they submit the correct data information;

-       It was established that the law required a target of 100% for Annual Benefit Statements to be sent by 31 August. The Board suggested that the Committee, in determining the materiality of any breach, should consider the issuance of 95% or over as a benchmark. This would be accompanied with a caveat of a communications plan for those individuals who did not receive their statement, as well as a letter to those employers where material numbers of staff did not receive their statement to inform them of the situation, and action being taken to resolve it.