Local Government Pension Scheme
PENSION LIAISON OFFICERS’
GROUP (PLOG)
Presented by Andy Cunningham
18 & 19 September 2012
Local Government Pension Scheme
Agenda
1. Welcome/Attendance
2. FRS17/ IAS 19
3. LGPS Reform 2014
4. LGPS Regulations Changes & Auto-enrolment
5. Performance Statistics, Administration Strategy & Pension
Regulator
6. Pension Section Re-Structure
Local Government Pension Scheme
FRS17 / IAS 19
Reports
Catherine Dix – Fund Investment & Accounting Manager
Local Government Pension Scheme
2. FRS17/ IAS 29
Agenda
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What are they?
Do I need one?
What is the process?
Who do I contact?
Local Government Pension Scheme
2. FRS17/ IAS 29
What are they?
• FRS 17/IAS 19 is an accounting standard
• The report assesses the Employers Pension Liabilities as at
a certain date
• The report provides all the disclosures for your accountant to
insert within your Annual Report
• FRS 17/IAS 19 is NOT the Triennial Valuation
Local Government Pension Scheme
2. FRS17/ IAS 29
Do I need one?
• New employers need to liaise with their Auditors
• Wiltshire Pension Fund will contact you to confirm your
requirements
• Assumptions for Report ultimate responsibility of Directors of
your organisations
Local Government Pension Scheme
2. FRS17/ IAS 29
What is the process?
• Wiltshire Pension Fund commission the reports
• You are required to confirm:
– Choice of report (FRS17 /IAS 19)
– The accounting Basis (CIPFA, Stand FRS17, FReM)
– Acknowledgement of Fee
– Confirmation of Assumptions to be used
– Acceptance of Terms of Engagement
Local Government Pension Scheme
2. FRS17/ IAS 29
Who Do I Contact?
• Catherine Dix (catherine.dix@wiltshire.gov.uk)
– Tel 01225 713698
• Mark Anderson (mark.anderson@wiltshire.gov.uk)
– Tel 01225 718299
Local Government Pension Scheme
3. LGPS Reform 2014
a). Background
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Government asked Lord Hutton to review all Public Sector
Pension Schemes
Hutton produced a report last year and made a number of
recommendations
Recommendations accepted by the Government
Government released details of a proposed LGPS scheme, which
has now been largely accepted by the Unions
New Regulations due by 31st March 2013, which will apply from 1
April 2014
Main details available now but the exact arrangements of the 2014
Scheme will not be available until the Regulations are finalised.
Local Government Pension Scheme
3. LGPS Reform 2014
b). Current Proposals (in Brief)
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Change to Career Average Revalued Earnings (CARE) Scheme
New Accrual rate of 1/49ths
‘Underpin’ Protection for those within 10 years of retirement
Employee Contribution Bands to remain but to be based on actual
earnings rather FTE Salaries in future.
Contribution Rates to increase for higher earners
Scheme Retirement Age to match State Retirement Age.
Return to 2 year vesting period (amount of time allowed up to
which someone can have refund of employee contributions if they
opt out)
50/50 Scheme (half the contributions, half the benefits)
Overtime included in pay and for service calculation
Local Government Pension Scheme
3. LGPS Reform 2014
c). Impact on Employers
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Administration & Payroll
Payroll systems will need to be changed to allow for changes to the
employee contribution rates (using actual salaries + different bands)
Accurate End of year reporting will become very important as each
years figure will form part of the pension calculation.
Pension Forms will change – more final pay calculations likely
More refunds over tax year ends.
Changes to discretion policies and related HR policies
50/50 Scheme will provide extra payroll and administrative
complication
Change in definition of pensionable pay
Local Government Pension Scheme
3. LGPS Reform 2014
c). Impact on Employers
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Finance
It is anticipated that in the short-term, the Scheme will not be any
cheaper (partly due to the protection) but in the long-term there
should be some modest savings (but less than originally
anticipated!)
Regulations due by 31 March 2013, so that actuaries can take into
the changes when considering new employer contribution rates as
apart of the 2013 Valuation.
Local Government Pension Scheme
3. LGPS Reform 2014
d). Impact on Members
Short-term
• Changes to employee contribution rates will be favourable for parttime workers but more costly for higher earners.
Longer-term
• Changes to benefit package (changes generally benefits those with
a more modest career progression in terms of salaries but not those
with larger salary increases over time)
Local Government Pension Scheme
3. LGPS Reform 2014
What’s next?
Once full details are available about the new scheme in Spring 2014,
the Pension Fund will review its procedures and begin increasing
member and employer communications in preparation for the new
start date
In the meantime, further information about the reforms can be found
on our website.
Local Government Pension Scheme
4. LGPS Regulations Changes & Auto-enrolment
a). LGPS Regulation Changes
Scheduled Bodies:
• Staff with a contract of three months or less, or no contract at all,
are now eligible.
• Changes apply with effect from 1 October 2012
• Need to communicate this to current and future casuals
Resolution/Designating Bodies:
• Staff with a contract of three months or less, or no contract at all,
are now eligible.
• All new ‘designated’ employees (with a contract of 3 months or
more) need to be auto-enrolled with effect from 1 October 2012.
• May need to pass a new resolution to clarify which roles are
designated and to bring in-line with the changes
Local Government Pension Scheme
4. LGPS Regulations Changes & Auto-enrolment
a). LGPS Regulation Changes (continued)
Admitted Bodies:
• For contracts that will apply from 1 October 2012, all TUPE
transferring staff will need to be auto-enrolled into the LGPS from
the transfer date (even if they opted out prior to transfer)
Local Government Pension Scheme
4. LGPS Regulations Changes & Auto-enrolment
b). Auto-enrolment
In brief:
• All employers will need to comply with Auto-enrolment legislation
by their staging date
• Staging dates are decided by PAYE size. Applies to the largest
organisation from October 2012, smaller organisations over the
next few years up to 2017.
• Pension Regulator has large amounts of information on-line and
will be responsible for ensuring compliance (through warning
notices/large fines etc)
• Basic requirement is to auto-enrol ‘eligible jobholders’ into a
‘qualifying scheme’ (such as the LGPS) by each employer’s
staging date.
Local Government Pension Scheme
4. LGPS Regulations Changes & Auto-enrolment
b). Auto-enrolment
Further information
• The legislation is complex – so you will need to look into it properly
• Involves relatively large amounts of administration (sending out
letters, monitoring changes in ages and salaries)
Actions Required now
• Find out your staging date
• Allow at least several months prior to your staging date to ensure
that your have the necessary arrangements in place to ensure
your are compliant.
Local Government Pension Scheme
5. Performance Statistics, Administration Strategy
& Pension Regulator
Administration Strategy
Some Key Employer Targets
Retirement Forms – to be received at least 15 working days before the
person’s retirement date
Starter, Change & Leaver Forms – to be received within 25 working
days of the date of the person starting/changing/leavers.
Note: It is useful if you can clarify with anyone who leaves, and is aged
over 60, whether or not they wish to draw their pension at that time.
Local Government Pension Scheme
5. Performance Statistics, Administration Strategy
& Pension Regulator
Pension Regulator
New Compliance Requirements for Dec 2012
Requirement for ‘common data’
•For new data created after June 2010 – 100% accuracy.
•For legacy data (created before June 2010) – 95% accuracy
‘Common Data’ includes: NI Numbers, Addresses, Names etc
Furthermore, this includes having all members set up or set as leavers
etc on our system.
Failure to comply could result in fines from the Regulator (to us)
Local Government Pension Scheme
5. Performance Statistics, Administration Strategy
& Pension Regulator
Performance Statistics
Our procedures and systems have changed and we are again recording
figures to identify areas where employers and the Fund can improve
their service to members.
In August (across all employers) – forms received in the target time
Retirements: 42%
Leavers: 20%
Starters: 26%
Changes: 22%
Local Government Pension Scheme
Wiltshire Pension Fund – New Structure
Head of Pensions
(David Anthony)
Fund Investment &
Accounting Manager
(Catherine Dix)
Pensions Manager
(Martin Summers)
Benefits Manager
(Jennie Green)
Employer Relationship & Fund
Development Manager (Andy
Cunningham)
Accounting Technician
(Mark Anderson)
Fund Communications
Manager (Zoe
Stannard)
Systems Manager
(Martin Downes – starts
Dec 2012)
Compliance & Technical
Adviser (Tim O’Connor)
3 x Senior Pensions
Officers (Debbie
Rawlings, Sharon Evans
& Sharon Bedwell)
Systems Officer – Altair
(Martyn Barber)
Investment Officer
(Emma Knibb)
4 x Pension Officers
(Annette Jarvis, Ian
Gaffakin, Elaine Doogue
& Denise Seus)
Projects Officer
(Alison Tucker)
Systems Officer –
Members (Vacant)
Systems Assistant
(Temp – Esther)
Administration Assistant
(Vacant)
3 x Pension Assistants
(Shirley Wood & vacant)
Local Government Pension Scheme
Any Questions?