Agenda item

Report of the Director of People Services.

4.1      Lee Witham (Director of People Services) presented the report and stated that the issues affecting pension administration performance over the last two years had largely been overcome and the service was stable. Most key performance indicators were rated green. He advised that Hampshire County Council (HCC) was assuming payroll responsibilities from BT and this would go live on 1 December. Lee Witham stated that a rigorous testing of the HCC system had been undertaken and he was confident that the problems that had been experienced when BT had taken over payroll responsibilities would not be repeated. He also advised that there had been an issue concerning employees who had erroneously been opted out, however People Services was now getting in touch with people affected to rectify this error.

4.2      During discussions, the Chairman asked if there was a risk posed to the Council because of the opt out issue. Furthermore, she enquired if there was also a reputational risk to the Fund because of late or incorrect data that had been identified. With regard to the current membership of organisations in the Fund, the Chairman asked if any could potentially present a reputational risk to the scheme. She referred to paragraph 2.10 of the report relating to an employer who had submitted late data to the Fund and requested details to see if there was a pattern emerging of organisations that were more likely to submit late or inaccurate data, with the risks categorised accordingly and to identifying organisations who may need support in pension administration matters. The Chairman also asked if People Services had sufficient resources to carry out pension administration functions.

4.3      Members asked if errors were made because of the complexities involved in payroll returns. It was also asked if officers felt that the number of employees accidently opted out could be higher than the figure recorded.

4.4      In reply to the issues raised by the Board, Sarah Hay (Senior Pensions and Payroll Officer) advised that in terms of opt out, the risk posed was to the employer rather than the employee. Employees affected had been advised that they could pay their pension contribution arrears over a longer period of time. Sarah Hay acknowledged that the late or incorrect data that had been identified from one organisation was a concern, however it was a relatively minor problem. The employer concerned could potentially be reported to The Pensions Regulator and fined on the basis of not providing sufficient monitoring. The issue had arisen because of the payroll system they used and payroll returns were complex in nature. This could be a particular issue for organisations involved in education where calculating whole time pay was complicated by the fact that some staff might only be paid during term time. Other organisations may also have a high turnover of staff. Sarah Hay agreed to provide information on organisations who may pose a reputational risk to the Fund, with the risk categorised accordingly. In respect of the four staff who had erroneously been opted out, Sarah Hay advised no other staff who had been classified as opted out had replied to People Service’s query stating that this was an error, although they would automatically be re-enrolled if they were did not respond.

4.5      Lee Witham advised that BT was still required to produce half yearly returns for 2018-19 which would require some work. People Services needed additional resources to support this and two additional posts were sought that would also help the transfer of the payroll function to HCC. Further additional resources would be requested if it transpired that more support was required for the transfer to HCC.

4.6      The Chairman requested further information in respect of staff erroneously opted out of the pension scheme. She welcomed the overall improvement in pension administration performance and noted that only two key performance indicators were amber, with the rest green.