LPFA Practitioner’s • Significant backlog –now 100% cleared • SLA missed April –October...

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LPFA Practitioner’s Conference

Monday 11th February 2019

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Pensions Administration Update

James Wilday

February 2019

LPP at a glance

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employees

pension fund members across LGPS, Police and Firefighter schemes

assets under management via LPPI, a fully-owned subsidiary authorised and regulated by the Financial Conduct Authority

Our vision is to be ‘a leading pension services business’ operating on a ‘not-for-profit’ philosophy and working in partnership with our clients and other customers.

Pension Administration – key topics

• Changes in the Operating Model

• Future service plans

• Engaging with the membership and dealing with member queries

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Pension Administration

Changes in pensions delivery

• New target operating model – April 2018 • Systems & technology implementation successful• Contact centre expansion for calls and emails• Anticipated benefits – improved member and employer

experience, greater resilience and a lower cost

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Member and Employer

Engagement

Member services including contact

centre

Business Development

Pension Administration Staff:Preston 91 Romford 31Hertford 29


Challenges faced to date

• Scale of change was significant – additional testing required

• Big bang approach was unwise in hindsight• Distinction in service requirements between partners• Underestimated staff training requirements• Lacked contact centre management experience • Timing• Structure

Implications:

• Significant backlog – now 100% cleared• SLA missed April – October for clients but now back on

track• Customer experience unacceptable

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Update – where are we now?

• Stabilisation achieved – SLAs achieved, service levels improved, staffing levels stable

• Training Manager recruited

• Service levels achieved

• Contact Centre customer experience improved – average 2 min wait time, 95% calls answered and new emails responded to within max 5 days

• 35% of Contact Centre callers surveyed and 90% satisfied – expanding to retirement survey and employer survey

• Annual Benefit Statements and Annual Allowance letters issued on time

• Service Improvement Plan in place

• Review of model and lessons learned underway. Next stage is to confirm how we can use our scale to drive improvements in the member and employer experience.

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Service Improvement Plan

Our plan aims to deliver the following during 2019

✓ Case ownership✓ Keeping members better informed✓ Dedicated complaints handlers✓ Improve the quality of written material✓ Collate regular feedback via a satisfaction survey✓ Explain how our SLAs work ✓ Reduce end to end processing time✓ Review all our processes and make small changes✓ Improve data quality in valuation year✓ Reduce data breaches (currently less than 0.01%)

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Engaging with employers and members

• We aim to respond to all member email queries within 5 working days. Currently running at around 48 hours.

• When calling our contact centre - we will aim to resolve the query over the phone and can give information on such things as:

✓ Scheme regulations ✓ Change of personal information✓ Help navigating the website✓ Talk through any of our processes✓ Help complete documents over the phone

• Part of our service plan is to ensure more consistency in responding to emails from employers

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• If we’re unable to resolve the query over the phone or email, we will pass this onto the caseworker who manage the more complex queries.

• Caseworkers will keep the member informed throughout the process and ensure timeframes are made clear.

• To ensure the member gets the information needed, securely and efficiently, we suggest encouraging all members signing up online.

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• Customer Service Accreditation• Data Management Accreditation & GDPR• Annual employer visits• Surgeries• Website review planned for 2018-19• Roll out of new member self service functionality (40%

active members using self service)• Valuation 2019• Customer Satisfaction Survey

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Engagement

Julie WiggEngagement Manager

February 2019

Engagement

“Occupy or attract (Someone's interest or attention)”

“Participate or become involved in”

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Involve

Participate

Engross

Absorb

Occupy

Employer Engagement

Activity

• Practitioners conference

• Employer Visits

• Training • HR• Payroll• Yourfund

• Dedicated Mailbox

• Newsletters/Alerts

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Member Engagement

Activity

• Pension Surgeries

• Presentations• LGPS Scheme Basics• Pre retirements

• Contact Centre • Emails• Calls

• Website

• Member Self Service facility

• Newsletters

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Engagement

“ Helping you to help us”

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Engagement

Practitioners Conference (February)

Employer Visit(March 2019-February 2020)

Member Surgeries (ABS/annual newsletter)

Quarterly Newsletters

Training

Customer Service Excellence Accreditation Surveillance(July)

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Engagement

What's on the Horizon………

• My Pension Online – Member Self Service Refresh

• New website

• Website videos

• Your Fund Portal

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Optimising the

Employer Portal

Allie Gilbert

February 2019

Your Fund Overview

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Online Forms

• New joiner

• Change of hours

• Absence notification

• Leavers

• Employer estimate requests

• Ill health, redundancy, flexible retirement

• View status of previously submitted forms

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Contacts

Employer contacts:

• Ensure that key contacts are up-to-date

• Check current status on Your Fund contact page

• Specify specialty areas/expertise

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Member contacts:

• Submit member email addresses through Year End data

• Can access ABS instantly

Questions

Q. If year end for previous years has already been submitted, why do you still require information for the past three years?

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A. This is an opportunity to check whether the ‘best of the last 3 years’ rule is applicable. Required if member has had any reduction in pay.

Questions

Q. Is it possible to mass upload leaver/starter information? This would save us a great deal of time.

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A. You can bulk upload joiners to the system, but unfortunately this is not currently possible for leavers.

Questions

Q. Why is there still a contracted out earnings section of the form when it is no longer applicable…can this be removed?

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A. This suggestion has been taken on is under review. Likely to be removed shortly.

Questions

Q. Can there be a function to ‘save’ a leaver form and return to it later?

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A. This has been raised with IT, we will let you know

Questions

Q. Currently there is no clearly defined process to deal with employees whom are yet to receive an NI number. Could names and dates of birth be a secondary reference to create a record?

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A. The Pension Regulator states that we must hold 100% common data. The members NI number is considered common data however names and date of birth are not.

Questions

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Q. Is the 30 days for employees to elect to buy back lost pension discretionary?

A. Employers have the discretion to extend the 30 day deadline. However they must notify the member that they have lost pension and provide them with an opportunity to buy back at a shared cost within 30 days of returning to work.

Questions

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Q. Where can we find guidance on how to draft a discretionary policy?

A. We are currently arranging some updates to the website that will cover this information. In the meantime, we have a document that we can share upon request.

Questions

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Q. Do you have any sample letters for eligible job holders/entitled workers/non-eligible job holders/postponement and re-enrolment?

A. We do not, however our advice would be to contact The Pensions Regulator who have a variety of templates on their website.

Questions

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Q. Is it mandatory that we notify the employee of any contribution rate change and provide them with the appeals process?

A. Yes it is mandatory to notify the employee of the new deduction rate.

Q. How do we inform LPFA of any change to contribution rate?

A. This is done through year-end submissions.

Questions

Q. How do we notify you of a change of name? There is no form for this purpose.

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A. You can email these directly to the Ask Pensions account, along with relevant supporting documentation.

Feedback

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LGPS Update

Neil Lewins

Lead Technical Specialist

Contents

1. Local Government Pension Scheme (amendment) Regulations 2018 X 2 (DB into payment and walker)

2. FAIR Deal

3. 4 year Valuations

4. Cost cap amendments

5. GAD factors

6. Discretions

7. IDRP

8. Bits and bobs

9. Questions

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Amendment regs (May 2018)

Headlines

1. DB into payment 55 for pre 2014 members2. Use of AVC’s3. APP4. Minor amendments/corrections

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Consultation ran: 27 May 2016 to 19 August 2016Laid: 19 April 2018Effective: 14 May 2018

Amendment regs (January 2019)

Headlines

1. Walker v InnospecCommon law or civil partners as if deceased member was male

2. Allows MHCLG to produce guidance for funds3. Corrects 55-60 for pre 1998 leavers

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Consultation ran: Laid: 18 December2018Effective: 10 January 2019

Fair deal

Headlines

Where an LGPS member is compulsory transferred, a new provider will be required to provide LGPS.And on subsequent merger or takeover with transfer of assets and liabilities.

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Consultation ran: 10 January 2019 to 4 April 2019Laid:Effective:

4 year valuations

Headlines

Awaited

2019-2020-2024 (1-1-4)2019-2022-2024 (1-3-2)2019-2021-2024 (1-2-3)

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Consultation ran: Laid:Effective:

Cost cap

Why

Hutton arrangement

Unfunded schemes- Funded different approach

Amendments to bring costs within 2% not back to start position

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Cost cap amendments

Cost cap broken (cheaper than expected)

Scheme Advisory board planned changes

But legal challenge by Firefighters and Judges Government have placed the changes on hold until clarity

Cost cap amendments

Expected Headlines

• Lower contributions for those under £22,500

• Minimum death grant £75,000

• Removal of tier 3 ill health

• Better early retirement factors

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Consultation ran: Laid:Effective: 1 April 2019

Possible 2019/20 banding table

Band Range Member contribution rate

50:50 rate

1 Up to £14,400 5.5% 2.75%

2 £14,401 to £22,500 5.8% 2.9%

3 £22,501 to £36,500 6.5% 3.25%

4 £36,501 to £46,200 6.8% 3.4%

5 £46,201 to £64,600 8.5% 4.25%

6 £64,601 to £91,500 9.9% 4.95%

7 £91,501 to £107,700 10.5% 5.25%

8 £107,701 to £161,500 11.4% 5.7%

9 £161,501 or more 12.5% 6.5%

Expected 2019/20 banding table

Band Range Full 50/50

1 up to £12,850 2.75% 1.38%

2 £12,851 to £22,500 4.40% 2.20%

3 £22,501 to £36,500 6.50% 3.25%

4 £36,501 to £53,500 previously £45,200 6.80% 3.40%

5 £53,501 to £64,600 8.50% 4.25%

6 £64,601 to £91,500 9.90% 4.95%

7 £91,501 to £107,700 10.50% 5.25%

8 £107,701 to £161,500 11.40% 5.70%

9 £161,501 or more 12.50% 6.25%

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2018/19 contribution bands

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Band Range Full 50/50

1 Up to £14,100 5.50% 2.75%

2 £14,101 to £22,000 5.80% 2.90%

3 £22,001 to £35,700 6.50% 3.25%

4 £35,701 to £45,200 6.80% 3.40%

5 £45,201 to £63,100 8.50% 4.25%

6 £63,101 to £89,400 9.90% 4.95%

7 £89,401 to £105,200 10.50% 5.25%

8 £105,201 to £157,800 11.40% 5.70%

9 £157,801 or more 12.50% 6.25%

Improved death grant

• Part time employee on £20,000 actual pay

• Current death grant £60,000 (£20,000 x 3) payable to nominated beneficiary, next of kin

• Will be increased to £75,000

• Anyone on a salary in excess of £25,000 does not see any improvement

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Tier 3 ill health

From April 2019, if the IQMP agreed a member satisfies conditions for ill health retirement tier 2 would be awarded is the member did not fall into tier 1.

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Enhanced early retirement factors

More attractive Early retirement factors to be released, however already changed from January 2019:

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Years Early 2014-2018 Male

2014-2018 Female

January 2019

April 2019

1 5.6% 5.2% 5.1% ?

2 10.8% 10.1% 9.9% ?

3 15.5% 14.6% 14.3% ?

4 20% 18.8% 18.4% ?

5 24% 22.7% 22.2% ?

AVC changes - before

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Old AVC Rules

Retirement Options

1. Lump sum2. Top-up LGPS pension (not deferreds)3. Additional membership (subject to conditions)4. Annuity5. Defer

Pay upon which AVCs deducted

Pre April 14 definition

Limit 50%

Death grant Estate

Applicable to

AVCs entered into before 1 April 14 and councillors

New AVC Rules

Retirement Options

1. Lump sum2. Top-up LGPS pension4. Annuity5. Can’t defer (other than flex retirement)


Post March 14 definition

Limit No limit

Death grant Fund discretion

Applicable to

AVCs entered on or after 1 April 14

AVC changes - after

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Old AVC Rules

Ret. Options 1. Lump sum2. Top-up LGPS pension (not deferreds)3. Additional membership (subject to conditions)4. Annuity5. Defer


Not applicable

Limit Not applicable

Death grant Estate

Applicable to

Member left before 1 April 14 and councillors

New AVC Rules

Ret. Options

1. Lump sum2. Top-up LGPS pension3. Additional membership (subject to conditions)4. Annuity5. Can’t defer (other than flex ret)


Post March 14 definition

Limit No limit

Death grant Fund discretion

Applicable to

All others

Employer actions

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Review discretions

Amend APP process and review past

cases

Ensure that you are

deducting AVCs from

correct pensionable

pay

Discretions

What are discretions?

This covers decisions made within the scheme

• Secretary of State• Administration Authority• Employer• Fund Actuary

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Employer discretions

Employer discretions

Mandatory discretions

1. Whether to grant extra pension?2. Whether to share the cost of purchasing additional pension

(SCAPC)?3. Whether to permit flexible retirement?4. Whether to ‘switch on’ the 85 year rule upon the voluntary

early payment of deferred benefits5. Whether to waive upon voluntary early retirement any

actuarial reductions?

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Administration discretions

Admin discretions

1. Decide on who monies are paid to on death of member2. When to merge concurrent records within same fund3. When to charge employers for early retirement ‘up front’4. When to extend time limits on notice to draw benefits5. When to trivially commute a small pension

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Discretions default position

Default position

If an employer has not established their discretions the default position is the main fund.However Actuary likely to assume most expensive scenario

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Discretions

Need to review periodically

If an employer does have a discretions policy it is recommended that these are reviewed ‘periodically’ to avoid any discretion to be seen as live if any appeal lodged.

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IDRP member complaint route

Where a member challenges a decision made by the employer or the administration Authority in relation to the scheme they can request it is looked at again, this is under IDRP.

Time limits apply (6 months of decision)Must be made in writing2 stage processFurther appeal to Pension Ombudsman available

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IDRP

What is covered by potential appeals

Can be any decision but most likely areas are

Reason for leavingIll health tierPay treated as pensionableDelays in making paymentDiscretion used but employer or fund

Member can get assistance from Pension Wise/TPAS/The Money Advise Service

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Stage 1 (employer or other nominated party)

Review decisionInform parties of decisionAnd if unsuccessful next stage availableIf successful, make corrective actions

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Stage 2 (Admin Authority)

Within 6 months of decision under stage 1, member may lodge stage 2 appeal.

Cannot be handled by person involved in first stage decisionReview decision taken based on information available.Inform member of decision and options if unsuccessfulInstruct correction if upheldOption to offer compensation is considered appropriate

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Pension Ombudsman

The Ombudsman will review complaints on administration and management of personal and occupational pensions:

Type of complaints it considers:Auto EnrolmentBenefits (incorrect calculation/refusal/failure to pay)Fund switchesDeath benefitsFailure to provide information to membersIll healthInterpretation of scheme rulesPension Liberation

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How key groups link together

A. Pension Wise/The Pension Advisory Service/The money advisory now Single Financial Guidance Body (SFGB) (to assist members)

B. The Pension Regulator (to act as policeman)

C. Pension Ombudsman (ultimate arbiter)

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Bits and Bobs

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Bits and bobs

• Update on exit payment reforms.

£95,000 capExit payment recoveryExit payment review

• LTA (19/20) – expected to be £1,055,000

• Annual Allowance (19/20) – expected to be £40,000.

• 2019 PI/CARE revaluation – expected to be 2.4%.

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Lunch Break

Simplifying the customer

journey through collaboration

Mairi Spiby

Stakeholder Manager

Local Pensions Partnership

11 February LPP offices 169 Union Street London

Key facts

The Pensions Ombudsman

ImpartialUnique

powers

Unlimited

redress

Legally

binding

Funded from

Pensions levy

Casework Structure

Stage 1: First

contact

First contact

Potential complaint

enquiries

Make an application

enquiries

Stage 2: Pre

and Early

resolution

Early resolution Pathway

Informal and Early

resolutions

Includes volunteer

advisers

Casework flow,

jurisdiction

Stage 3:

Informal

resolution

Adjudication

3 x multi-disciplinary teams

Stage 4:

Determination

Ombudsman

Ombudsman and Deputy Ombudsman

Stakeholder

management

Customer

engagement

Casework function

The numbers: 2017/2018

• 72 staff

• handled 6,319 enquiries, up 5% from 2016/17

• plus approximately 6,000 phone enquiries

• accepted 1,676 new investigations, up 26% from

2016/2017

• completed 1,591 investigations, up 13% from

2016/2017

• 29% complaints determined by the Ombudsman were

upheld, at least in part in favour of the applicant

• 70% complaints now resolved informally

• Average time to close a case halved to 5 months on

average

Updated memorandum of understanding

between TPO and FOS, December 2017

• The Pensions Ombudsman (TPO) – matters

that predominately concern administration and/or

management of occupational and personal

pension schemes.

• Financial Ombudsman Service (FOS) –

matters that predominately concern advice in

respect of sales or marketing of individual

pension arrangements.

Clearer signposting for dispute

resolution, September 2018

• The Department for Work and Pensions and The

Pensions Regulator sign agreement clarifying

signposting.

• The Pensions Advisory Service (TPAS) deals

with guidance requests and The Pensions

Ombudsman (TPO) deals with all complaints and

disputes.

• Customers using TPO’s Early Resolution Service

will not be expected to have first used a scheme’s

internal dispute resolution procedure if the parties

are in agreement.

LGPS complaint typesClosed investigations in 2016/17

LGPS statistics Enquiries & investigations

Outcome ‘formal’ determined

investigations

2016/17 2017/2018

Upheld 13% (5) 38% (15)

Partially upheld 18% (7) 13% (5)

Not upheld 69% (27) 49% (19)

Total 39 (39) 39 (19)

Year 2014/15 2015/16 2016/17 2017/2018

Investigations

accepted

114 79 100 105

Investigations

closed

77 102 98 98

Outcome ‘informal’ resolutions 2016/17 2017/18

Opinion accepted 34.7% (34) 25% (26)

Resolution 25.5% (25) 30% (31)

Total 60.2% (59) 55% (57)

.

Distress and inconvenience

- non financial injustice

• ‘Distress’ is things like concern, anxiety, anger,

disappointment that an applicant experiences.

• ‘Inconvenience’ is the time and effort spent by

the applicant in relation to the maladministration

and in having to pursue their complaint.

Redress for non-financial injustice

No award Nominal non-financial injustice

£500 Significant non-financial injustice

£1,000 Serious non-financial injustice

£2,000 Severe non-financial injustice

Higher than

£2,000Exceptional non-financial injustice

Assisting the courts

• it affected the Ombudsman’s legal jurisdiction or our

office procedures

• the decision may have a wider impact on the

industry

• there are a large number of same-issue cases

accepted for investigation

• there is a real and significant concern over access to

justice.

Previous position – TPO only participated if:

Now – TPO may also participate if, for example:

Stakeholder connections

Regulators, Ombudsman,

Oversight Bodies

&Training

Public Sector Pension

Schemes

Public Sector Pension Boards

Private Sector Pension

Providers

Master Trusts & Trustee Providers

Consumer Groups & Unions

Stakeholder Relationships &

Legal Forum

Key achievements

The TPAS resolution function transferred to TPO. One

place for customers to go for all complaints about

occupational and personal pension schemes

Process change so cases are resolved at the earliest

point. Led to simpler and shorter customer journey,

with no loss of quality

Stakeholder engagement, increase in collaborative

working leading to better signposting, improved

networking and sharing of good practice

70% of cases resolved informally and time taken

halved to five months.

Backlog of 730 cases cleared

The role of the Local Pension Board

LPP Practitioners’ Conference for LPFA Fund employers,

Omolayo Sokoya – LPFA Local Pensions Board (LPB)

11 February 2019

80

What are the aims of the LPB?

• Established by Public Sector Pensions Act 2013

• Assist administering authority to:

− Secure compliance with Regulations, other legislation and

governance,

and Pension Regulator’s requirements

− Ensure effective and efficient governance of the Scheme

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Who is on the LPFA LPB?

• Independent Chair – William Bourne

• Four Employer representatives.

• Four Scheme Member Representatives

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Name Date appointed

Frank Smith 2015

Adrian Bloomfield 2017

Amy Selmon 2017

Sean Brosnan 2015

Name Date appointed

Omolayo Sokoya 2015

Peter Scales 2015

vacant Appointment in

progress

vacant Appointment in

progress

What does the LPB add?

• A voice for Scheme Members and Employers - As the body is made up of

member and employer representatives, it is able to bring useful and

different perspectives to bear, particularly in improving communication and

engagement.

• Expertise: e.g. pensions administration, risk management, auditing,

governance, good understanding of pension fund management, LGPS

knowledge and issues facing the LGPS.

• Extra leverage to help Pension Fund Committee to achieve its objectives

‘A second pair of eyes leads to better decisions’

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What have we been involved in?

Meetings

• Meetings take place on a quarterly basis in London and members of the LPB

attend induction/training sessions.

Topics that we have been involved in:

Creation of the LPP -

• The LPP, the entity created with Lancashire County Pension Fund to manage

assets, liabilities, and administration, we wanted reassurance that it is working

for your benefit.

• To that end we have encouraged an independent review of its cost-

effectiveness.

84

What have we been involved in?

Communications

• To improve the communications between the fund and its members and

employers. We have made recommendations to LPP’s engagement team, and

are providing feedback via a working party.

✓ Enhancing the member website

✓ Newsletter to members and employers

✓ Customer survey

✓ Pension surgeries

✓ Pre-retirement courses

✓ Employer meetings

✓ Member conferences

✓ Annual Benefit Statement - Members would have received a more user friendly

and descriptive ABS for their benefit. Issued in August 2018 a clearer

informative document with notes of guidance including a quick guide to your

benefit statement with links to how to improve your pension benefits

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How can employer assist further?

• Employers can assist further on this area by supplying the LPP their staff’s

email addresses so they can communicate directly with members

• Remind staff what a significant benefit being a member of the LGPS is by

communicating with staff directly and reminding them of the excellent pension

scheme that they are in at a cost of X% employer contribution.

• Employer can carry out some testing with their members. Key questions

thought to be:

➢ Do you understand how your pension works?

➢ Do you know where to access more information?

➢ Have you used LPFA website/ written information to understand more in the

last 12 months?

➢ If so how useful did you find it. Etc.

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Challenges the LPB faces

• Tension between oversight and assistance roles

• Limited powers

• No template for the role – we have had to forge our own

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Thank you

Omolayo SokoyaSenior Finance ManagerLondon Fire Brigade

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DM 6469907 v2A These slides remain the property of The Pensions Regulator and their content should not be altered on reproduction.

LPFA Practitioners Conference

169 Union Street, London

Rebecca Woodley

Industry liaison manager

11 February 2019

Public Service Pension

Employers

The information we provide is for guidance only and

should not be taken as a definitive interpretation of the law.

E


• Our role, responsibilities and powers

• Your role and responsibilities

• Our expectations

• Lessons from the 2017 survey - the importance of good data

• Lessons from casework

• Scheme returns

• Data related initiatives

• The need for cyber resilience

E

Agenda

DM 6034372 v4B These slides remain the property of The Pensions Regulator and their content should not be altered on reproduction.

• Our role is to protect workplace pensions

• We are being clearer, quicker and tougher

• We are changing in five key areas:

− clarifying our identity

− setting clear expectations

− improving our regulatory oversight

− using a wider range of regulatory interventions

− being more efficient and effective

The evolving Pensions Regulator

Efficient and effectiveInterventionRegulatory oversight

Clear expectationsIdentity and

engagement


• One-to-one supervision is part of our evolving approach to protecting

and regulating pensions

• In addition to the process for authorisation and supervision of

authorised master trusts, supervision is being introduced for other

workplace DB and DC schemes in both the public and private sectors

➢ www.tpr.gov.uk/en/about-us/how-we-regulate-and-enforce/one-to-one-

supervision

Driving compliance through supervision

http://www.tpr.gov.uk/en/about-us/how-we-regulate-and-enforce/one-to-one-supervision


Landscape

£1.5 trillion assets

6,050DB /

Hybrid

schemes

11m members

1.4m

active

member

16.7m members

447

Publicschemes

31,940Occupational

DC schemes

12.6m members

7.4m active

members

£48bn assets

£16bn

assets

9.9mmembers

6m

active member

Master Trusts

81MTs

9.9m employees

enrolled

AE 1.3m employers

Source: Corporate Plan 2018 - 2021 www.tpr.gov.uk/doc-library/corporate-plans.aspx

http://www.tpr.gov.uk/doc-library/corporate-plans.aspx


Participation in workplace pensions by sector


Balance of membership in

public service schemes

Source: www.tpr.gov.uk/-/media/thepensionsregulator/files/import/pdf/db-pensions-landscape-2018.ashx

http://www.tpr.gov.uk/-/media/thepensionsregulator/files/import/pdf/db-pensions-landscape-2018.ashx


• We regulate the governance and administration of public service pension

schemes, which provide pensions for civil servants, the judiciary, local

government, teachers, health service workers, members of fire and rescue

services, members of police forces and members of the armed forces

• Our Code of Practice 14 sets out the standards of conduct and practice we expect

Introduction


• We regulate compliance with the Governance and Administration requirements

introduced by the Public Service Pensions Act 2013:

– we engage mainly with scheme managers and pension boards

– investment: not the what (compliance with investment regulations) but the how

(investment governance) - LGPS only

➢www.tpr.gov.uk/guidance/db-investment.aspx

• To educate and enable:

– codes, toolkit, news-by-email

➢www.tpr.gov.uk/doc-library/codes.aspx

➢https://trusteetoolkit.thepensionsregulator.gov.uk/

➢https://forms.thepensionsregulator.gov.uk/news-by-email/subscribe

• To enforce:

– improvement and third party notices, fines etc

Our roles and responsibilities

http://www.tpr.gov.uk/guidance/db-investment.aspx

http://www.tpr.gov.uk/doc-library/codes.aspx

https://trusteetoolkit.thepensionsregulator.gov.uk/

https://forms.thepensionsregulator.gov.uk/news-by-email/subscribe


• Appoint a skilled person to assist the pension board

• Civil penalties – up to £5,000 to an individual or £50,000 to a corporate body

• Collect data through the scheme return

• Criminal prosecution

• Improvement notices and third party notices – require specific action to be

taken within a certain time

• Information – require any relevant person to produce any relevant document or

information

• Inspection – at own premises and/or premises of a third party

• Publish reports about a case (which might include naming those at fault)

• Recover unpaid contributions from employers on behalf of the scheme

manager

• Report misappropriation – notify the scheme manager about pension board

conflicts or misuse regarding assets

• Skilled person report – require scheme managers to provide a report made by

a skilled person nominated by the regulator

Our regulatory powers


• Ongoing risk assessment and intelligence gathering

➢ www.tpr.gov.uk/en/document-library/research-and-analysis

• 2018 survey issued at the end of last year:

– there are some additional questions (eg on the composition of pension

boards, reviewing administration services, dealing with employers not

providing data, cyber risk, common and scheme specific data, late

ABS and breach reporting)

– there is now a free-text box at the end of the survey which allows

schemes to add extra notes in response to particular questions

– it should be completed by scheme managers, or their representative,

wherever possible (and we recommend other people, such as the

pension board chair, are consulted)

– responses are anonymous by default, but answers can be shared with

us and/or the SAB if you wish

TPR focus 2018 - 2019

http://www.tpr.gov.uk/en/document-library/research-and-analysis


Regulation 80 of the LGPS (England and Wales) regulations 2013 states:

• A scheme employer ‘must give that authority such other information as it

requires for discharging its scheme functions’ and

• ‘Within three months of the end of each scheme year, each scheme

employer must give a statement to the appropriate administering authority

giving the following details in respect of each employee who has been an

active member during the scheme year’:

– the employee's name, gender, date of birth, NI number, unique reference

number relating to each employment

– the dates of active membership

– pensionable pay received and employee contribution deducted

– any employer contribution in relation to the employee’s pensionable pay

– any additional employee or employer contributions

➢ http://www.lgpsregs.org/schemeregs/lgpsregs2013/timeline.php#r80

Employer legal responsibilities –

England and Wales

http://www.lgpsregs.org/schemeregs/lgpsregs2013/timeline.php#r80


Two way engagement approach:

• Employers:

– required to provide information requested

– have awareness of terms of employer agreements

– abide by contract terms / obligations under regulations

– manage HR / payroll systems

– provide quality data (eg member joiner and leaver forms)

– report a material breach of law

• Scheme managers:

– follow scheme regulations, rules and requirements

– have awareness of terms of employer agreements

– have clear, robust, published processes / deadlines / communications

– designate a scheme contact point

– follow through on non compliance

– understand material breach of law reporting requirements

Our expectation - employer responsibilites

E


Pension boards are responsible for assisting the scheme manager in

securing compliance with:

– scheme regulations

– other governance and administration legislation

– any requirements of The Pensions Regulator

– additional matters, if specified by scheme regulations

– pension boards need to have an equal number of employer

representatives and member representatives (they may also have

other types of members, such as independent experts).

• For simple guides to pension boards:

➢ www.tpr.gov.uk/en/public-service-pension-schemes/further-

resources/pension-guides#s18403

Local pension boards


• Good record keeping is a key part to the successful running of a scheme and

allows schemes to meet their legal obligations

• We know from engagement that standards vary widely, and some schemes do

not prioritise this appropriately, so TPR expects:

– scheme managers to engage with administrators over service and security

– assess data and put in place a plan to address issues

• Guidance on producing an improvement plan (scroll down to further guidance

section):

➢ www.tpr.gov.uk/en/public-service-pension-schemes/understanding-your-

role/importance-of-good-governance

Record keeping

http://www.tpr.gov.uk/en/public-service-pension-schemes/understanding-your-role/importance-of-good-governance


• Scheme managers should undertake an annual data review and put in place

an improvement plan where they identify issues - data improvement is a

continuous process, not a one-off exercise

• Our quick guide (www.tpr.gov.uk/improve-data) can help you design a plan or

assess an existing one

• Poor data integrity has a real impact on members - accurate records are key

to ensuring:

– the right members get the right benefits at the right time,

– accurate valuations and calculation of the cost cap

• The data needed to run an efficient and effective scheme should be checked

regularly – both ‘common data’ (applicable to all schemes) and ‘conditional

data’ (dependent on scheme type, structure and system design)

(www.tpr.gov.uk/measure-data)

• Data should be well managed day to day to ensure it is accurate and complete

• Though administrators may look after records on a day to day basis, scheme

managers are still accountable

Improving your data

https://www.thepensionsregulator.gov.uk/en/document-library?res=/-/media/thepensionsregulator/files/import/pdf/improve-data-guide

http://www.tpr.gov.uk/measure-data


Identified issues

62% identified issues

25% no issues

identified

3% don’t know if

issues

10% not reviewed

(inc. DK)

Data improvement

plans

19% data improvement

plan

43% no data

improvement plan

28% no issues identified

(inc. DK)

10% not reviewed (inc.

DK)

Most schemes have

conducted a data

review in the last year

Almost two-thirds

identified issues in

their latest review

In most cases data

rectification is in progress

but not complete

Many schemes are doing an annual data review, but take up of data improvement plans

is low. Decrease in LGPS carrying out a data review and employer data is a bigger

concern than for other schemes.

Last data review

75% in last 12

months

15% longer ago

2% never

8% don’t know

Record keeping - survey results


In LGPS, the proportion of schemes that did NOT report that that at least 90% of their

employers provided timely data was 49%* - and 59%* did NOT report 90%+ accurate

and complete data (*includes 7% of LGPS schemes that didn’t know).

Record keeping - overview

• We consider 90% of employers providing good quality data to be an

important threshold

• 62% of all schemes reported that that at least 90% of their employers

provided timely data

• And 55% of all schemes reported that at least 90% of their employers

provided accurate and complete data

All respondents (Base, Don’t know, Did not answer question) - Schemes (191, 9-12%,

2%), Memberships (191, 2- 14%, 0%), Other (11, 0-18%, 0%), Fire (49, 20-22%, 2%),

LG (88, 6-7%, 0%), Police (43, 7-9%, 7%)


• From 2018 will be asked to report on:

– when scheme last measured common data

– common data score

– when scheme last measured scheme specific (conditional) data

– scheme specific data score

• This will help us understand and segment the landscape and target

interventions / track progress

• Common data = data used to identify members (eg DOB, NINO, name)

• Scheme specific data = other data needed to run the scheme:

– in public service schemes this includes data required by the regulations,

data needed for valuation, compliance with scheme regulations etc

• For more information on the scheme return www.tpr.gov.uk/public-service-

schemes/reporting-duties.aspx

Scheme return requirements 2018

http://www.tpr.gov.uk/public-service-schemes/reporting-duties.aspx


• Legal duty to report a breach of the law that is likely of material significance to

TPR for:

– scheme manager

– pension board member

– professional advisers

– employers

– administrators and others providing advice to the manager

• Reporters to determine if a breach has occurred based on reasonable cause and

not a mere suspicion

• TPR provides example scenarios and RAG system for assessing scale of

materiality by way of:

– cause

– effect

– reaction

– wider implications

➢ www.tpr.gov.uk/en/public-service-pension-schemes/scheme-

management/reporting-breaches-of-the-law

Reporting breaches of law

http://www.tpr.gov.uk/en/public-service-pension-schemes/scheme-management/reporting-breaches-of-the-law


• 2 breach of law reports were received in 2016 from an administrator

• 43 employers were failing to submit their End of Year Certificates (EOYCs) to

the scheme manager by the legal deadline

• The administrator had made multiple contacts with each employer

• Our engagement:

– we engaged with the non-compliant employers

– the engagement identified a lack of knowledge and understanding by

employers on EOYC submissions

– all but one employer is now compliant

– the scheme manager removed the final employer from the scheme (the

employer has now gone insolvent)

• For more detail:

➢ www.tpr.gov.uk/en/document-library/enforcement-activity/regulatory-

intervention-reports

Breaches of law - Teachers’ Pension Scheme

http://www.tpr.gov.uk/en/document-library/enforcement-activity/regulatory-intervention-reports


• Scheme managers have a legal obligation to maintain certain data

• Employers provide most of the data needed

• Both employers and scheme managers must ensure they are meeting their

legal obligations to the scheme:

– employers must ensure they understand their obligations to the scheme

– scheme managers must have robust processes to ensure accurate data

is provided on time

• TPR can, and has, intervened where these actions don’t resolve the issues:

– a range of powers at our disposal, including the issuing of an

improvement notice and / or third party compliance notice and associated

fines

Key issues


• We issued a £1,000 fine against the London Borough of Barnet scheme

manager for failing to submit its 2016 scheme return:

– we issued a scheme return notice to the scheme manager on 9 July

2016, requesting the scheme return be submitted by 12 August

– the return was not received and further communications from TPR not

replied to

– so the matter was referred to TPR’s Determinations Panel on 24

February 2017

– the penalty notice was issued to the scheme manager on 13 April and

paid on 9 June

Public service pension scheme fined £1000


• Outsourcing does not reduce or remove a scheme

manager’s responsibility or accountability.

• It is the legal responsibility of managers to submit a

scheme return by the specified deadline:

– failure to submit may signal further governance

and administration problems within the scheme

– good scheme governance is a key factor to

achieving positive outcomes for members

• The £1,000 fine against the scheme manager took

into account:

– size of scheme (23,000 members)

– governance and administration being a priority for

TPR

Key lessons


• In 2018, we used a number of different powers for the first time

• Production orders - require institutions to hand over evidentially admissible

financial information on individuals or organisations under the Proceeds of

Crime Act 2002, were used successfully as part of an investigation into

pension fraud:

– we required a bank to hand over statements and other details of the

accounts linked to the trustees of a pension scheme

• We fined a trustee that failed to complete a valuation on its DB pension scheme, using our power under section 10 of the Pensions Act 1995:

– the trustee was ordered to pay a £25,000 fine after it twice failed to have the scheme valuation completed (required every three years)

• And we prosecuted a recruitment company, its directors and a number of its

senior staff after they worked together to illegally opt-out workers who had

been automatically enrolled into a workplace pension scheme

– we criminally prosecuted under the Computer Misuse Act 1990

Different use of powers - update


• Enhanced requirements:

– increased reporting requirements

– pensions dashboard

– cyber security

What are the challenges facing

pension schemes?


• Scheme participation

expected to be mandatory

with some exceptions

• Public sector pension

schemes account for over

30% of total workplace

memberships

• Currently pensioner income

is 50% state and 50%

private pension (source

Pensions Policy Institute)

• DWP consultation paper:

https://www.gov.uk/government/

consultations/pensions-

dashboards-feasibility-report-

and-consultation

Pensions dashboard

https://www.gov.uk/government/consultations/pensions-dashboards-feasibility-report-and-consultation


Be ScamSmart

The FCA and TPR have launched

a joint TV advertising campaign to

raise awareness of pension

scams and the most common

tactics used by fraudsters.

New statistics show that pension

scam victims lose over £90,000

each on average.

A cold calling ban is in force

Print out and include the pension

scams guide in your user

documents (eg annual member

statements and transfer packs).

Find out more at: www.tpr.gov.uk/pension-scams

http://www.tpr.gov.uk/pension-scams


Be ScamSmart


• Pension schemes are potentially valuable targets for fraudsters as they

hold large amounts of personal information

• Scheme managers are responsible for putting in place controls to ensure

the security of data and assets

• TPR CEO has said that cyber security should be on risk registers

• Not just an administrator problem – (eg what controls are around the data

shared with the scheme actuary, legal advisors and pension board)

• Not just about cyber ‘defence’ but cyber resilience:

– look at systems, processes and people to reduce the risk

– prepare for when things go wrong

Cyber resilience in pension schemes


• Which, if any, of the following controls does your scheme have in place

to protect your data and assets from ‘cyber risk’*?

– roles and responsibilities in respect of cyber resilience are clearly defined

and documented

– cyber risk is on the risk register and regularly reviewed

– assessment of the vulnerability to a cyber incident of the key functions,

systems, assets and parties involved in the running of the scheme

– assessment of the likelihood of different types of breaches occurring in the

scheme

– access to specialist skills and expertise to understand and manage the risk

– system controls (eg firewalls, anti-virus and anti-malware products and

regular updates of software)

– controls restricting access to systems and data

– critical systems and data are regularly backed up

– an incident response plan to deal with any incidents which occur

Cyber security controls

*By ‘cyber risk’ we mean the risk of loss, disruption or damage to a scheme or

its members as a result of the failure of its information technology systems

and processes.


• Which, if any, of the following controls does your scheme have in

place to protect your data and assets from ‘cyber risk’?

– policies on the acceptable use of devices, passwords and other

authentication, and on home and mobile working

– policies on data access, protection, use and transmission which are in

line with data protection legislation and guidance

– the scheme manager and pension board receives regular updates on

cyber risks, incidents and controls

– the scheme manager has assured themselves of third party providers’

controls (including administrators)

Cyber security controls continued…


• Most cyber attacks exploit basic weaknesses in software and IT systems

• Our guidance to trustees and scheme managers on principles for

building cyber resilience:

www.tpr.gov.uk/guidance/cyber-security-principles-for-pension-

schemes.aspx

• Government estimates that 80% of breaches could be prevented by

following these 10 steps from the National Cyber Security Centre (part of

GCHQ):

www.ncsc.gov.uk/guidance/10-steps-executive-summary

• Cyber Essentials is a Government-backed, industry-supported scheme

to help organisations protect themselves against the most common

threats found on the internet. It shows you how to fix basic weaknesses

and get a good level of cyber security in place.

www.cyberaware.gov.uk/cyberessentials

Mitigation against cyber threats

http://www.tpr.gov.uk/guidance/cyber-security-principles-for-pension-schemes.aspx

http://www.ncsc.gov.uk/guidance/10-steps-executive-summary

http://www.cyberaware.gov.uk/cyberessentials


• Our key focus areas are record-keeping and data quality

• Employers must provide accurate and timely data for record keeping

• Data quality to be continuously reviewed:

– the reviews are sufficiently comprehensive

– and robust data improvement plans are in place and progressed

• Good governance and administration - make sure there are appropriate

controls:

– service level agreements are set up, even with in-house administrators

– report breaches of the law when appropriate

• Additional scheme return requirements this year

• Scheme managers are responsible for having controls for cyber resilience

• Outsourcing does not reduce or remove a scheme manager’s responsibility

or accountability

Summary


• Annual benefits statement - www.tpr.gov.uk/ps-annual-benefits

www.tpr.gov.uk/ps-member

www.tpr.gov.uk/-/media/thepensionsregulator/files/import/pdf/public-

service-annual-benefit-statements-guide.ashx

• Data measuring guidance - www.tpr.gov.uk/measure-data

• GDPR guidance - Information Commissioner’s Office (ICO) -

https://ico.org.uk/for-organisations/guide-to-the-general-data-protection-

regulation-gdpr/

• Improvement plan guidance - www.tpr.gov.uk/improve-data

• Internal controls checklist - www.tpr.gov.uk/ps-internal-controls

Useful tools, checklists and guidance - (i)

http://www.tpr.gov.uk/ps-annual-benefits

http://www.tpr.gov.uk/ps-member

http://www.tpr.gov.uk/-/media/thepensionsregulator/files/import/pdf/public-service-annual-benefit-statements-guide.ashx

http://www.tpr.gov.uk/measure-data

https://ico.org.uk/for-organisations/guide-to-the-general-data-protection-regulation-gdpr/

https://www.thepensionsregulator.gov.uk/en/document-library?res=/-/media/thepensionsregulator/files/import/pdf/improve-data-guide

http://www.tpr.gov.uk/ps-internal-controls


• Public service - scheme self assessment toolkit -

www.tpr.gov.uk/public-service-schemes/assess-your-scheme.aspx

• Public service - personal self assessment tool -

https://education.thepensionsregulator.gov.uk/login/index.php

➢ Reporting a breach -

www.tpr.gov.uk/en/public-service-pension-schemes/scheme-

management/reporting-breaches-of-the-law

➢ Risk register example -

www.tpr.gov.uk/ps-risk-register

• Scheme return -

www.tpr.gov.uk/public-service-schemes/reporting-duties.aspx

• Trustee Toolkit - https://trusteetoolkit.thepensionsregulator.gov.uk/

Useful tools, checklists and guidance - (ii)

http://www.tpr.gov.uk/public-service-schemes/assess-your-scheme.aspx

https://education.thepensionsregulator.gov.uk/login/index.php

http://www.tpr.gov.uk/en/public-service-pension-schemes/scheme-management/reporting-breaches-of-the-law

http://www.tpr.gov.uk/ps-risk-register

http://www.tpr.gov.uk/public-service-schemes/reporting-duties.aspx

https://trusteetoolkit.thepensionsregulator.gov.uk/


• Our website - www.tpr.gov.uk/

• Codes - www.tpr.gov.uk/doc-library/codes.aspx

• Code of practice 14 - Governance and administration of public service

pension schemes - www.tpr.gov.uk/public-service-schemes/code-of-

practice.aspx

• Governance - www.tpr.gov.uk/21c-trustee

• Latest research - www.tpr.gov.uk/en/document-library/research-and-analysis

• Pension scams - www.tpr.gov.uk/pension-scams.aspx

• Public service area - www.tpr.gov.uk/public-service-schemes.aspx

• TPR Future - www.tpr.gov.uk/about-us/protecting-workplace-pensions.aspx

Useful links

http://www.tpr.gov.uk/

http://www.tpr.gov.uk/doc-library/codes.aspx

http://www.tpr.gov.uk/public-service-schemes/code-of-practice.aspx

http://www.tpr.gov.uk/21c-trustee

http://www.tpr.gov.uk/en/document-library/research-and-analysis

http://www.tpr.gov.uk/pension-scams.aspx

http://www.tpr.gov.uk/public-service-schemes.aspx

http://www.tpr.gov.uk/about-us/protecting-workplace-pensions.aspx


We are here to help!

Request a guest speaker:

https://secure.thepensionsregulator.gov.uk/speaker-

request.aspx

Contact us at:

www.tpr.gov.uk/contact-us.aspx

Subscribe to our news by email:

https://forms.thepensionsregulator.gov.uk/subscribe.aspx

The information we provide is for guidance only and should not be taken as a definitive interpretation of the law.

Thank you

https://secure.thepensionsregulator.gov.uk/speaker-request.aspx

http://www.tpr.gov.uk/contact-us.aspx

https://forms.thepensionsregulator.gov.uk/subscribe.aspx



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