Report of the Director of People Services.
8.1 Joanne Meagher (Head of Operational People Services) presented the report and began by stating that due to a combination of issues, the service standards for pension administration had fallen in 2015/16. Some of the reasons for these involved external factors outside the control of the pension administrator, Surrey County Council. One of the main contributing factors was the BT contract for the Managed Service Programme with the Council’s tri-borough partners that combined Human Resources, Payroll and Finance services and had gone live on 1st April 2015. Amongst the problems experienced with the contract included staff being paid incorrectly or having pension deductions either being calculated incorrectly or not being deducted on all qualifying earnings. BT had initially been unable to cope with the number of pension queries in the first six months of the contract and this had led to staff contacting Surrey County Council’s Pensions Team directly and distracting from their work. In addition, there was a lack of pensions interface to upload information for starters in the scheme, meaning that staff were having to manually upload the information which slowed responses to scheme members’ queries.
8.2 Joanne Meagher informed Members that the Surrey County Council Pensions Team had also been affected by staff sickness and it had been difficult to replace staff with sufficient technical knowledge on a temporary basis. Additional pressure had also been placed on Surrey County Council when they had taken on bi-borough pension administration work for Hammersmith and Fulham and Kensington and Chelsea boroughs in September 2015.
8.3 Joanne Meagher advised that the Council had made Surrey County Council aware that improvement was necessary, and Surrey County Council had since implemented a new phone system to improve customer access, whilst they had also recruited more staff to help improve the service. However, the key performance indicators (KPIs) from the first four months of 2016-17 financial year showed that only 67% of those retiring were receiving their option forms in time which could lead to the first pension payments being made late. Joanne Meagher advised that officers were continuing to work with Surrey County Council and BT and meeting with them regularly to move things forward and an Improvement Plan was in place. She added that the Council’s auditor, Grant Thornton, was due to the audit the Fund’s administration service in August/September 2016 and officers had requested to include a review of case management focussing in part on retirements.
8.4 In noting the long term sickness problems experienced by the Surrey County Council Pensions Team, Members asked whether any steps could have been taken in avoiding this when staff had been recruited and were there any measures in place to help maintain the service when staff were absent. It was enquired whether the KPI figures applied to the Council only or all participating organisations in the scheme, including admitted bodies. Members asked if there was a timeline by which officers expected the pension administration performance to be up to the desired standard and had Surrey County Council taken on too much when it had taken over pension administration services for the Royal Borough of Kensington and Chelsea and the London Borough of Hammersmith and Fulham too.
8.5 In reply to the issues raised by Members, Joanne Meagher advised that she was not aware of any historical health issues in respect of the Surrey County Council Pensions Team, however she acknowledged that officers could ask Surrey County Council what measures are in place to prevent the service being impacted adversely where staff were on long term absence. She confirmed that the KPI figures included members from all organisations participating in the pension scheme. Issues continued to be experienced in the pension administration service, however BT was now presenting more relevant information and the Improvement Plan was scheduled to be completed by March 2017. Close monitoring of performance would continue to take place and there would be a further review of progress with Surrey County Council in six months’ time. Joanne Meagher acknowledged that Surrey County Council had been presented with a considerable challenge when it had taken over the pension administration service for the Royal Borough of Kensington and Chelsea and the London Borough of Hammersmith and Fulham. She commented that BT was aware that it was currently not performing to the desired level, however it had given the impression that it was determined to improve.
8.6 Kim Edwards (Senior Payroll, Pensions and Establishment Adviser) added that officers were currently largely manually inputting details of staff who were retiring, and officers from Westminster City Council were also assisting with this. However, this would no longer be necessary once the appropriate interface with BT was in place.
8.7 The Chairman requested that this item become a standing item on the agenda at subsequent Board meetings and that the reports include up to date data, including data on retirement options.