Agenda item
Future Pension Administration Options
- Meeting of Pensions Committee, Monday, 31st July, 2017 7.00 p.m. (Item 6.5)
- View the background to item 6.5
Report to follow
Minutes:
George Bruce, Interim Pensions Manager presented a report which detailed the current Pension Administration Services to the Tower Hamlets Pension Scheme, the advantages and challenges to the current arrangements and compared these with alternative arrangements.
Members sought clarification on whether the item should be considered by the Pensions Committee and was advised that initial feedback was being sought.
The current administrative service in place for Tower Hamlets Pension Scheme has been in operation since the Borough was established. At current services are delivered by the Council’s HR and Finance Departments and comprises of small teams. This in-house service enables the direct control over the quality of service, ensures there is a direct relationship with scheme managers, avoids conflicts of needs of other clients and ensures certainty of staff.
The LGPS is becoming increasingly complex due to frequent changes in regulation and best practice guidelines and is now under greater scrutiny. Maintaining awareness of and implementing new regulations is a challenge to a small team; in conjunction the size of the current Team faces inherent risks from losing key staff.
Two main alternative means of delivering pension administration services to the scheme have been identified, co-operation with other Local Authorities or appointing an external third party administrator. The former option will grant the Pension Scheme access to more resources, access to a larger and diverse pool of specialist staff, encourage standardised client reporting and reduce IT cost.
The above mentioned will enable more focus to be given to daily tasks and also be adaptive to the needs of the Scheme. The Committee noted the risks of switching from an in-house to a local authority grouping could result in the reverse of advantages that are found in retaining an in-house team.
The third option, appointing a third party administrator would be undertaken via a commercial tender. An appointment of a third part administrator will magnify both the advantages (cost and resilience) and disadvantages (compromise and loss of control) of local authority groups. Third Party administrators can be accessed through the National LGPS Framework.
Members noted all the proposals presented and the size of the administrative team and specialties of officers. The option to collaborate with other Local Authorities was discussed further and Members preferred this option to over the other options presented and agreed that further research be undertaken to ascertain what administrative systems were in place in neighbouring boroughs. Members agreed that if the option to co-operate with other Local Authorities is chosen; the other scheme participants should have a shared interest with Tower Hamlets.
Members were advised that the Pension Board had recommended that all options are fully explored and that resilience of the service remains paramount. The Committee were informed established networks would be used to gage views and experiences. Members can forward comments about the various options to Lead Officers.
RESOLVED:
That a further detailed evaluation of the options outlined in the paper, including discussion with other local authorities is undertaken and that the findings are analysed and presented at the next Committee.
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Supporting documents: