Somerset and Devon tighten shared admin strategy to boost employer comms

The strategy will set deadlines for activities such as updating member details and producing annual benefit statements, to be completed by the schemes and their participating employers.

The £1.2bn Somerset scheme and £2.7bn Devon scheme share administration services, which is called Peninsula Pensions and provided by Devon County Council. 

[It is] for employers to know what we expect of them as much as what we will deliver to them

Anton Sweet, Somerset County Council

Anton Sweet, pensions manager at the Somerset County Council, said the scheme had never had an administration strategy.

“It’s because admin strategies have been around but not compulsory for a number of years and we just never quite got round to it,” he said.

Sweet said the strategy would help establish clear response times and responsibilities for both employers and the scheme.

“[It is] for employers to know what we expect of them as much as what we will deliver to them,” he said.

Peninsula Pensions will establish an employer liaison officer that will help with administration-related queries around the correct interpretation of the Local Government Pension Scheme regulations, employer responsibilities and updating records and completing forms through its online interface, according to its draft administration strategy.

Each employing authority will designate a pensions liaison officer to be the main contact for employers regarding any aspect of administering the LGPS.

The administrator aims to hit its deadline in 90 per cent of cases and sets the same target for employers.

Daniel Taylor, head of administration services at consultancy Premier, said the process of establishing an administration strategy starts with setting out a contractual agreement.

However, he added that some schemes do not reference their administration agreement or keep it updated.

“There’s no point in monitoring anything unless you have got a contractual standard in place,” Taylor said.

He said trustees need to ensure there are “clear, defined targets in there; the core compliance part of the service is covered by the agreement, quality controls are agreed and formalised when the contract is [set up] and trustees know exactly what they should be measuring against”.

The Pensions Regulator expects common data – information that needs to be held for all members of schemes – to be 100 per cent accurate if created after June 2010 and at least 95 per cent if created before that date.

Kim Gubler, director at Kim Gubler Consulting, said developing a formalised administration strategy can help trustees identify where they have not linked between the high level, strategic decisions and the operations of the scheme.

“All of these flexible retirements, [pension increase] exercises, all of these things require input from the administrator,” said Gubler. “If the scheme is going to start to derisk and decisions are made at a strategic level... are the data adequate for what you want to do?”

Gubler also said a stewardship report is key to monitoring the effectiveness of your scheme’s administration strategy.

“You’re not just looking at something that’s got a couple of graphs in it but actually has meaningful information,” added Gubler.

“For example, the activities of the scheme, how it’s being used by the members, how they’re engaging with the scheme, have there been any issues? Are the trustees first line of the [internal dispute resolutions process] or does that get handed down to somebody else?”