Agenda item

Pensions Administration Update to 31 December 2022

Report of the Director of Finance and Assurance.


The Board received a report, outlining the Pension Administration Team’s performance for the quarter ending 31 December 2022 and updating Members on a number of other items.

During the discussion which ensued, the following points were highlighted:

1)              After a slight drop in the pension administration team’s performance in the previous quarter due to challenges with the new payroll arrangements and work around the triennial valuation, the performance was starting to improve, and backlogs had been reduced to manageable levels.


2)              Work was under way on the automation of some processes such as the Members Self-Service, which was currently being tested as well as i-connect arrangements, which would seek to improve the quality and timeliness of data submitted by non-Harrow employers.


3)              Active membership had seen a slight growth – it is likely that this was due to the auto-enrolment exercise carried out in the 2022.  The total number of members had also increased to 19,155.


4)              Preparations were underway for the implementation of 10.1% pensions increase from 12 April 2023.


5)              A technical consultation on the alignment of indexation of career average scheme benefits with the tax system, the aim of which was to avoid higher earners in public sector pension scheme receiving unintended tax bills was likely to go through as published.  A further technical consultation on the cost management process and implementation of McCloud was also under way although it did not include the Local Government Pension Scheme.


6)              There had been no progress on the major consultations including investment pooling which was likely due to capacity issues at Department for Levelling Up, Housing and Communities.


The Board welcomed the report and raised a number of comments and questions which were addressed as follows:

7)              Referencing paragraph 10 of the officer report on one of the ill-health retirement cases from October 2021, the Interim Pensions Manager explained that the Ombudsman had decided that some aspects of the process by which the Council reached a decision did not fully comply with the scheme regulations.  As a result, the Council had to pay a small compensation to the individual member and reconsider the application.  The case was currently with the independent registered medical practitioner and a report was being awaited in due course.  No further updates had been received on the other two ill-health retirement cases.  The Board was informed that as part of the Council’s complaints procedure, the compensation was paid from the Council’s main budget rather than the Pension Scheme funds.  Members welcomed the update and requested that an outline of all Ombudsman decisions along with any lessons learned from the resolved case be included in the next performance report.


8)              Previous payslip issues which had been caused by the change of payroll software were considered resolved and no repercussions had resulted from the Council’s self-reporting the incident to the Information Commissioner.


9)              Although no specific figures on the number of re-enrolment cases could be provided, the Board was informed of a recent Freedom of Information request on the number of people who had opted for the 50/50 scheme because of the cost-of-living crisis, which revealed there were none.


10)          Issues arising from the pensions payroll had arisen following the recent upgrade of the Council’s system from SAP to Microsoft D365 which had resulted in a number of practical problems that were taking longer than expected to resolve.


11)          Referencing the performance monitoring statistics in Appendix 1 to the officer report in relation to the issue of statutory notification on receipt of transfer funds, the Board was informed that whilst these were considered a lower priority as they did not have an immediate impact on a member’s pension situation, work would be undertaken to ensure the performance on these moves closer to the 100% target.


RESOLVED:  That the report be noted.

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