Report of the Director of Finance and Assurance.
The Board received a report on Pensions Administration Update for the quarter ending on 31 March 2022, which provided a summary of the Pension Administration Team’s performance and updated Members on a number of other items.
During the discussion that ensued, the following points were highlighted:
1) The Pension Fund membership had increased further to 19,003 although a significant number of members had also retired during the last quarter.
2) The three yearly re-enrolment exercise for members who had previously opted out of the Local Government Pension Scheme (LGPS) was coming to an end and was due to be completed by 31 July 2022. Given the current economic climate, no significant increase in the number of members was expected.
3) No known breaches of law were reported in the 2021/22 financial year. However, in April 2022, there were challenges with the printing and distribution of payslips following a change of Harrow’s payroll arrangements, resulting in a small number of overseas members’ payslips being printed on the back of other members payslips. In line with the Council’s procedures a breach of data protection requirements was reported, and action taken to rectify the situation and prevent it from re-occurring.
4) One internal dispute, relating to ill-health retirement, had been dealt with and resolved under the Internal Dispute Resolution Procedure, with the member deciding to take early payment of their deferred pension at a reduced rate.
5) No further updates had been received on the three complaints to the Pension Ombudsman since the last Pension Board meeting and minimal progress appeared to have been made by the Ombudsman.
6) Consultation on the updated LGPS Regulations was still being awaited and unlikely to take place until after the summer recess at the earliest although further delays were still possible.
7) Data on the triennial evaluation was currently being processed with initial whole fund results, the proposed London Borough of Harrow contribution rate for the period 01/04/2023 to 31/03/2026 and a draft funding strategy statement by the Actuary expected to be reported to the Pension Fund Committee in September and the Pension Board in October as part of the consultation process. Further reports would be submitted to the Pension Fund Committee and to the Board as the valuation work progressed.
8) The pensions administration performance statistics were measured against the national benchmarks for the Quarter to 31 March 2022 and were set out in Appendix 1 to the officer report. Service performance remained good and case numbers were added to the performance monitoring statistics set out in Appendix 1 for completeness.
In the discussion which followed, the Board raised a number of points, which were answered as follows:
9) With regards to the status of the Local Ombudsman complaints the Board was advised that in all three cases, the independent medical practitioner’s reports had indicated that the individuals were not permanently unfit to work and therefore ill-health retirements were not awarded, resulting in the individuals referring their cases to the Ombudsman. The cases had been with the Ombudsman for over 12 months and, whilst unfortunate for the individuals, the delay in processing the complaints was not of Harrow’s making and the Council had followed the correct procedure. It was also noted that whilst the Ombudsman service imposed strict deadlines on local authorities for providing information in response to requests, the reciprocal did not apply making it difficult to obtain updates on individual cases. The Board felt the delay in responding to the complaints was unfair and wished to express its dissatisfaction with the situation.
10) Acknowledging the significance of the awaited LGPS consultation, the Board noted that based on the government’s track record for responding to other similar consultations, it was unlikely that the results would be available soon.
11) In regard to the Scheme Advisory Board’s annual report on the LGPS to March 2021, the increase in investment management charges (referenced on page 14, paragraph 19 to the officer report) was mainly due to impact of funds’ recovery and investment valuations. The charges were proportionate to the asset valuations – the higher the value of the investments being managed the higher the charges. The charges were lower than they would have been had investment pooling of LGPS Funds’ assets not been implemented.
12) The Board was assured that work on the annual benefit statements was on course to meet the 31 August 2022 deadline and would not be a cause for default.
The Board welcomed the updates and commended Harrow’s Administration Team for their consistent performance and high standards as demonstrated by the report.
(1) the report be noted; and
(2) officers undertake to write to the Pension Ombudsman and express the Board’s concern over the delay in the responding to the three complaints set out in the report.