COVID19 Alert

The Board and committees will meet virtually for the foreseeable future to ensure support for the scheme and contact with relevant government departments is maintained. The secretariat remains available at home by mobile, email or video (MS Teams or Zoom) as detailed on the contacts page.

There is now a Covid-19 News page on the lgpsregs site plus FAQs for scheme administrators and employers these will be updated as new information becomes available and further items for the FAQ are received or clarified.

COVID19 Alert

The Board and committees will meet virtually for the foreseeable future to ensure support for the scheme and contact with relevant government departments is maintained. The secretariat remains available at home by mobile, email or video (MS Teams or Zoom) as detailed on the contacts page.

There is now a Covid-19 News page on the lgpsregs site plus FAQs for scheme administrators and employers these will be updated as new information becomes available and further items for the FAQ are received or clarified.

2nd November 2020 - LGPS COVID-19 follow up survey conducted 13th July to 12th August

Survey was sent to LGPS administering authorities across England, Wales, Scotland and Northern Ireland

Question 1 – Administrating Authority details

73 Responses were received from;

  • 22 London Boroughs
  • 28 English county or unitary councils
  • 6 English metropolitan authorities
  • 8 Scottish authorities
  • 5 Welsh authorities
  • LPFA and the Environment Agency

 

Question 2 – What percentage of your administration staff are currently working from home?

The responses to questions 2 to 4 have been grouped into bands of 10%. So for example, the chart below shows that 2.9% of responses were that less than 30% of staff were working from home, and that 79.71% of responses were that over 90% of staff were working from home.

Administration staff currently WFH chart

Administration staff currently working from home (grouped by %) %
0-29% 2.9%
30-79% 4.35%
80-89% 13.04%
90-100% 79.71%

Question 3 - What percentage of your administration staff do you expect to be working in the office by the end of 2020?

Administration staff expected to be WFO chart

Administration staff expected to be WFO (count) chart

Administration staff expected to be working from office (grouped by %) by the end of 2020 %
0-9% 21.74%
10-19% 8.70%
20-29% 17.39%
30-39% 7.25%
40-49% 8.7%
50-59% 15.94%
60-69% 1.45%
70-79% 5.8%
80-89% 7.25%
90-100% 5.8%

Question 4 - What percentage of your administration staff do you expect to be working in the office in the long term?

administration staff expected WFO long term

administration staff expected WFO long term count

Administration staff expected to be working from office (grouped by %) long term %
0-9% 5.80%
10-19% 1.45%
20-29% 10.14%
30-39% 4.35%
40-49% 7.25%
50-59% 30.43%
60-69% 7.25%
70-79% 11.59%
80-89% 8.70%
90-100% 13.04%

Question 5 - What plans have you made for future working arrangements?

plans for future arrangements

Plans for future arrangements %
To return to office-based working 12.82
To offer a more flexible working environment 53.85
Not sure yet 33.33
Other - please specify 7.69

There were a number of comments on future working arrangements, these included that core functions and processes continue to be performed in the office and that office working was available on a rota basis or with compressed hours. Other comments were that policy was being led by the authority; that flexible working was already offered and expansion of this was expected. It was also stated that plans were not fixed and it was too early to predict a return to the office.

Question 6. How confident are you that you can continue to pay existing pensioners?

confidence paying existing pensioners

Confidence in paying existing pensioners %
Very confident April 84%
Very confident July 96%
Somewhat confident April 16%
Somewhat confident July 4%
Not so/at all confident April 0%
Not so/at all confident July 0%

General comments indicated that the current payroll process was resilient and there were no issues with pensioner payments. However, whilst there was confidence that pension funds will continue to be able to pay existing members in the short term, the additional work which will arise as a result of McCloud, the £95k exit cap and the cost cap mechanism pose a very material risk in the medium term.

Question 7 - How confident are you that you can calculate and process new retirements and benefits within your usual performance standards?

confidence processing new retirements and benefits

Confidence in processing new retirements and benefits %
Very confident April 43%
Very confident July 81%
Somewhat confident April 51%
Somewhat confident July 17%
Not so confident April 6%
Not so confident July 3%
Not at all confident April 0%
Not at all confident July 0%

Question 8 - How confident are you that you can process other work within your usual performance standards e.g. deferred benefits, transfers etc?

confidence other work within performance standards

Confidence in processing other work within performance standards %
Very confident 44.16%
Somewhat confident 42.86%
Not so confident 11.69%
Not at all confident 1.30%

The issues and risks identified in the comments were:

  • the impact a second wave may have on the availability of team members
  • workloads arising as a result of McCloud and other potential regulatory changes (e.g. Cost management process and £95k exit payment cap)
  • impact on wellbeing, team cohesion and morale from working from home
  • delays in recruitment and reductions in team productivity
  • extended length of time to train new staff
  • issues with printing from home reducing the ability to meet targets in other areas, but that processes were being reviewed to remove reliance on hard copy documents where possible
  • dependence on external organisations and delays in receiving information from employers. Other organisations concentrating on paying pensioners, processing retirements and deaths was resulting in transfer backlogs

Question 9 - Have any of your employers contacted you to let you know they may not be able to pay contributions?


employers communicating contribution difficulties

Employers communicating contribution difficulties %
Yes April 25%
No April 75%
Yes July 26%
No July 74%

Question 10 - If you answered 'Yes' to Q9, please let us know how many employers, which sector the organisation is in and provide any other relevant information.

Where answered ‘yes’ the sectors highlighted were charities, leisure facilities, colleges, museums, theatres, transport and recreation sector employers and private companies. This contact was reported as being broadly in the form of general enquiries or discussion and very few appeared to be deferring payment, and in those cases where agreed, the deferral period was short-term and within the scheme year.

Question 11 - Are you aware of any employers who are exiting the Scheme (or are at risk of exiting) and that exit is linked to the current COVID-19 situation?


employers at risk

Employers at risk %
Yes April 5%
No April 95%
Yes July 7.79%
No July 92.21%

Question 12 - If you answered 'Yes' to Q11, please provide as much information as possible, even if this is just the sector of the organisation(s) concerned.

Where answered ‘yes’ the employers were:

  • a tourism board set up by local authority as a charity in the process of making all staff redundant
  • an employer with most of its income coming during summer period from tourists
  • a small number of employers in leisure and entertainment sectors.
  • a small contractor providing cleaning services to an education establishment closed during lockdown. With no other source of income, the likely outcome would be that the contractor will terminate the contract and make staff redundant.

Question 13 - What arrangements have been put in place for pension committee meetings due to take place during the lockdown period?

arrangements for pension committees

Arrangements for pension committees %
July - Cancelled or postponed 15.79%
July - Held virtually 76.32%
July - Other 7.89%
May - Held virtually 27%
May - Planning to hold virtually 61%
May - Other 12%

Question 14 - What arrangements have been put in place for local pension board meetings due to take place during the lockdown period?

arrangements_for_local_pension_boards

Arrangements for Local Boards %
Cancelled or postponed to a later date 22.37%
Held virtually 69.74%
Other 7.89%

Question 15 - If you have held virtual meetings, do you think you will continue with this format when face to face meetings are possible?

(If the virtual meeting regulations are extended in the case of pension committees)


continuance_virtual_meetings

Confident of sufficient resources %
Very confident 61.67%
Somewhat confident 35.00%
Not so confident 1.67%
Not at all confident 1.67%

Comments on the virtual meeting format when face-to-face meetings become possible included:

  • early signs were that virtual meetings are working well, but that this will be kept under review
  • meetings held virtually tend to be shorter and more focussed
  • greater flexibility and virtual meetings may encourage more engagement and ensure knowledgeable contributors to committees and boards are retained
  • virtual meetings are likely to improve attendance of Local Pension Board meetings where members have other full-time commitments
  • it is likely that the authority will continue to take advantage of the ability to hold virtual meetings until May 2021
  • it is possible a combination of face to face and virtual meetings will be adopted
  • the policy will be determined by the authority depending on what arrangements have been put in place and how effective remote meeting becomes
  • the policy will depend on the members of the Pension Board and Pension Committee
  • it is not anticipated that virtual meetings will continue in the current format due to considerable additional resource involved
  • feedback from committee members is that face to face meetings will be preferred when it is safe and practical to return
  • there may be additional meetings that will now be held virtually, but substantive meetings are expected to be held face to face

Question 16 - How confident are you that going forwards you will have sufficient resources to administer the Scheme to the same levels you achieved before COVID-19?


confidence_in_resources

Confidence in future resources %
Very confident 60.29%
Somewhat confident 35.29%
Not so confident 2.94%
Not at all confident 1.47%

The issues and risks identified in the comments were similar to those from question 8:

  • a second wave impacting on the availability of team members
  • workloads arising as a result of McCloud and other potential regulatory changes (e.g. Cost management process and £95k exit payment cap).
  • impact on wellbeing, team cohesion and morale from working from home
  • delays in recruitment and reductions in team productivity
  • extended length of time to train new staff
  • scarcity of specialist knowledge and experience
  • training remotely would be an additional challenge

Question 17 - Do you have any concerns in the following areas?

Please tick all that apply


areas_of_concern

Areas of concern %
Recruitment 45.45%
Training 60.61%
Performance 36.36%
Budget 12.12%
Office accommodation 34.85%
Staff wellbeing 60.61%
Service development projects 30.30%
New national requirements e.g. McCloud, cost cap, £95k exit cap, Pensions dashboards etc 87.88%

The main areas of concern commented on were national requirements (McCloud), training and recruitment, staff wellbeing and accommodation:

  • additional resources and external assistance would be required to deal with McCloud
  • the issue of timing around response and implementation to plan and resource accordingly
  • the impact McCloud will have on other service development projects and overall performance
  • the issue of high workload and challenges of training staff specifically for McCloud will have an impact on day to day service provision
  • the challenges of recruitment and training staff when working remotely
  • the increasingly competitive market and constraints in public sector remuneration
  • the difficulties in replicating ‘on the job coaching’ while working from home
  • the need for a dedicated area or workspace for team working
  • the risk that employers, including administering authorities, will seek to reduce costs by making many staff work from home permanently
  • the challenge of accommodating staff safely
  • the impact extended working from home will have on staff morale, mental health and overall performance, long-term productivity and efficiency

Amongst the concerns were also examples of confidence in authorities and pension teams’ capability, adaptability and resolve:

  • some staff were finding working from home beneficial and can maintain productivity
  • a flexible approach to homeworking will help where office space is at full capacity
  • graduate recruitment programs have seen a large increase in applications this year
  • the new national requirements will prove challenging whether in the office or not
  • technology (MS Teams et al) is being used to continue with team meetings for discussing these challenges and planning the way forward
  • service development programmes that were put on hold are now being looked at again

Question 18 - Do you anticipate any cash flow issues for 2020/21?

Anticipated cash flow issues %
Yes 0.00%
No 91.67%
Possibly 8.33%

There were several comments on cash flow including:

  • some large employers have paid contributions up front for next three years
  • advance payment of deficit contributions from main employers following valuation are held in cash, and more than cover requirements
  • no employer issues have been reported to date
  • most income comes from employers with strong covenants
  • the pension fund is investing for the long-term with a diversified portfolio, consideration given to current market conditions
  • cashflow is positive after taking investment income into account
  • the pension fund maintains very high liquidity
  • the investment strategy already in place ensures cashflow is not an issue
  • expectation that private market distributions may be slower than anticipated
  • cashflow issues are difficult to predict
  • it depends on how specific investment income flows hold up

Question 19 - Please let us know about any other pension issues that you face as a result of COVID-19 that we have not covered in this survey

A summary of the issues raised is given below:

  • the challenges are similar to those before Covid
  • in the longer term, possible increases to contribution rates and affordability
  • communication with scheme members and suitability of digital solutions for all members; the Pensions Regulator has highlighted the reliance by some members on postal or telephone services.
  • the challenge of meeting the Annual Benefit Statement deadline of 31 August and 2020 Triennial Valuation Deadline of 31 March 2021
  • increased workload due to higher than usual individual queries from (possibly furloughed or redundant members) about accessing their pension benefits
  • potential loss of investment income on property portfolios
  • government department (DWP) reliance on paper forms (pensioner income) and concern that state benefits could be impacted due to this
  • the lack of joined up software offerings for effective service delivery has become more acute
  • administrating authorities’ focus on main services and lack of understanding of the pensions function
  • insufficient resources to undertake projects and implement improvements to services
  • reduced employer responsiveness to individual requests and queries

The more positive comments were as follows:

  • opportunities to recruitment staff from across the country
  • employers have still been able to complete monthly returns, even if less responsive to individual information requests
  • potential productivity gains from full-time working at home

Produced 06.10.2020

This survey was conducted on behalf of the Local Government Pension Scheme Advisory Board (England and Wales) and the Local Government Pensions Committee of the LGA. These survey results are copyright © LGA and cannot be reproduced in whole or part without permission.

For further information members of the press should contact the Scheme Advisory Board Secretary [email protected]

Please visit the Regulations website, http://lgpsregs.org, for Further Covid-19 news and information for LGPS administering authorities.

25th June – Corporate Insolvency and Governance Act 2020

On 25 June 2020, the Corporate Insolvency and Governance Act 2020 received royal assent and came into force on 26 June. The measures introduced by the Act which is designed to assist companies during the pandemic includes provisions for a moratorium during which companies can defer debts. The Board is seeking legal advice on the potential impact of a moratorium on employer deficit contributions.Links to the Act and further information are below;

The Corporate Insolvency and Governance Act 2020

Guidance on the Corporate Insolvency and Governance Act 2020

22nd May – LGPS COVID-19 Governance survey results

The results of the LGPS COVID-19 Governance survey that was completed between 1st May and 15th May 2020 are now published in a summary document. Please use the link below to access the summary.

Survey Summary pdf, 8 pages, 788kb

21st May –Summary of NHSC Life Assurance Scheme

Details of the NHSC Life Assurance Scheme were published in 21st May. We have compiled a summary of the main aspects of the scheme which also contains links to further information and the rules of the scheme . Please use the link below to access the summary.

NHSC LA Scheme Summary - pdf, 2 pages, 124kb

1st May –Survey of LGPS governance during COVID-19

Thank you to all of you that took the time to complete our LGPS resilience and cash flow surveys – we had a great response and your input has helped us raise the important issues with Government and TPR and tailor the support and guidance we provide to you.

We would now like to hear from you on how the current situation is impacting the governance of the LGPS. Please complete the LGPS COVID-19 Governance survey – it should take around 5-10 minutes to complete. Please submit only one response per administering authority

21st April –Survey of LGPS cash flow

A survey of administering authorities in England & Wales and Scotland in relation to cash flow shows a small minority who are anticipating issues due to loss of dividend income or delayed employer contributions. The survey took place between 1st and 14th April and had a response rate of over 80%. the Board would like to thank all those who responded so promptly. A number of related issues were included in survey responses which have been raised with the new SAB practitioner advisory group and/or government and will be reflected in forthcoming amendments or additions to the FAQ page on lgpsregs.co.uk. Please use the link below to access the survey summary.

Survey Summary - pdf, 3 pages, 139kb

14th April –Regulations extend accounting deadlines

Coming into force on 30th April The Accounts and Audit (Coronavirus) (Amendment) Regulations 2020 extend the publication date for local authority audited accounts to 30th November 2020 with the public inspection period now starting on the first working day of September 2020. To accompany the regulations government has also produced an explanatory note.

At present there are no plans for an automatic extension of the publication date for LGPS fund report and accounts however MHCLG have requested that you inform us of any 'knock on' issues arising from these regulations to enable them to keep the matter under consideration

7th April –Survey of LGPS resilience

A survey of administering authorities in England & Wales and Scotland between 24th March and 6th April had a response rate of nearly 80% and the results show a high level of confidence in the ability to continue to pay more than 1.5 million LGPS pensioners, a minority of employers in current difficulties and some concerns around accessing required information for new benefits.

It is to the credit of those authorities that they not only responded so promptly but are able to so effectively respond to the challenges facing them at this time. The survey also asked for ideas for additions to the administrator FAQs and those not already present are under active review. All points raised about regulatory flexibility have been raised with MHCLG and/or TPR. Please use the link below to access the survey summary.

Survey Summary - pdf, 4 pages, 154kb

3rd April - TPR issues new guidance for Public Service

TPR has now published Scheme administration: COVID-19 guidance for trustees and public service setting out the critical processes for administrators including paying members’ benefits, retirement processing, bereavement services, as well as any administrative functions required to support these.

3rd April - Regulations on virtual council meetings published

Regulations enabling councils to hold electronic and digital meetings using virtual locations such as internet locations, web addresses or conference call telephone numbers come into force on 4th April 2020. Follow the link below and view regulations 5 and 6.

The Local Authorities and Police and Crime Panels (Coronavirus) (Flexibility of Local Authority and Police and Crime Panel Meetings) (England and Wales) Regulations 2020

2nd April – Board statement on LGPS valuations

The Board has issued a statement concerning the 2019 valuations and the recent movements in equity markets

statement on valuations - pdf, 1 page, 96kb

30th March – PLSA Top Tips for DB and LGPS and PASA Guidance for Administrators published

The PLSA have published Top Tips for DB Schemes and LGPS Funds . Although there are sections that are not directly applicable to the LGPS (TPR guidance for trustees, insurance policies, buy outs etc) there is a lot of good advice and guidance on how to approach dealing with the current situation facing pension schemes.

PASA have also issued Covid-19 Guidance for Administrators setting out priorities together with the basic and high level enablers to achieve them. Again not everything will be directly applicable to LGPS administration teams but nevertheless very useful.

27th March – TPR issues updated DB scheme guidance

On Friday TPR issued updated guidance for DB trustee schemes. Although not directly applicable to the LGPS the guidance includes matters faced by all private sector DB schemes such as valuation assumptions, employer contribution holidays and transfers and provide valuable insight into the regulator's approach.

25th March – Weekly MHCLG video calls for practitioner issues

We have been in contact with MHCLG regularly on a number of Covid-19 related matters and from next Wednesday we will hold weekly video calls to discuss administration issues. Included in these calls will be the feedback from the survey plus other issues raised by authorities and employers. These calls will inform our Q&A responses and assist MHCLG in considering any necessary guidance.

25th March – Rules around local authority pension committee meetings

Some concern has been raised about the ability of pension committees to take decisions virtually. Section 78 of the Coronavirus Bill provides powers to the Secretary of State to make regulations regarding council meetings due to be held up to 7th May 2021. We understand that regulations are being worked on to come into force shortly after the Bill gains royal ascent.

24th March – Letter to chairs of pension committees: impact on LGPS service

The Board Chair has sent a letter to pension committee and pension board chairs with regard to the impact on service provision and supporting the request to administering authority pension managers from the Board Secretary

Scheme resilience - Letter from Cllr Phillips - pdf, 2 pages, 120kb

24th March – Message to administering authorities and request for information on Covid-19 related impacts on service

A message to administering authority pension managers from the LGA Head of Pensions and Board Secretary regarding service provision together with a request to complete an online survey on Covid-19 related issues to better inform discussions with MHCLG and to include in the forthcoming lgpsregs Q&A

23rd March – Extension to local authority accounts timetable

On 16th March government announced an extension to the deadline for publication of local government financial audits from the end of July to 30 September 2020. Since then LGA have sought further clarification on this and whether this also affects the other deadlines, such as the sign off for the accounts. MHCLG have confirmed that they will be amending the whole chain of publication requirements in the Accounts and Audit Regulations 2015, not just the final publication date for accounts. The intention is that the date for the public inspection of draft accounts will move to the first 10 working days of July, which will mean that the accounts themselves will not need to be signed off until 30 June. We have asked MHCLG to confirm if it is their intent to apply a similar delay to the publication of scheme annual report and accounts.

19th March 2020 - Re-employment of key workers

The Chair of the Scheme Advisory Board, Councillor Roger Phillips, has today sent a letter to the Chairs of LGPS Pension Committees regarding the discretionary abatement of pensions for staff who will be returning to assist in the delivery of vital services:

Re-employment of key workers - Letter from Cllr Phillips - 19 March 2020 pdf, 1 page, 32kb

16th March 2020 - The LGPS and stock markets - a message from the Board

There has been a lot of disturbing news lately about the fall in stock markets and the potential resultant impact on defined contribution pensions.

LGPS defined benefit pensions are not linked to stock market performance and are set out in statute.

Although short term investment values may vary, the LGPS as a long-term investor is securely managed to address any longer term impacts.

LGPS Scheme members can therefore be assured that both their contributions and their pension, whether in payment or built up to date, will be unaffected.