Administration overview
This is the first year the Scheme Annual Report has featured a dedicated section to pension administration. In March 2024, updated guidance for preparing the fund annual report was published on the Board’s guidance page.
Where possible, compliance with the new guidance for reporting administration has been reviewed as part of the Scheme Annual Report data collection exercise and as this is the first year under the new guidance reporting was requested on a ‘best endeavours’ basis. Hence this year’s scheme annual report does not include an overall compliance report on the new guidance, but the Board does intend to include this in future Scheme Annual Reports.
The fund annual report guidance sets out key information for funds to cover when reporting on administration activities. When collecting data for the Scheme Annual Report on administration, some data reported by funds has been collected and aggregated, but not all is suitable, was available or could be easily collated to be published at scheme level.
The Board will continue to develop its approach to reporting in future years. Engagement with funds and feedback from administrators will be key to ensure any scheme-level aggregation is meaningful and helpful.
Scheme administration data in 2023-2024 annual reports
25 funds (29%) reported that they have outsourced their administration.
The main administration services used by LGPS pension funds are Capita, Equiniti, Hampshire Pension Services, Liberata, LPP, Peninsula Pensions, Pension Shared Services, Sutton and Kingston Shared Services, West Yorkshire Pension Fund, and XPS.
78 (90%) funds gave a summary of activities undertaken by the administration function during the year
86 (99%) funds reported on both member and employer numbers
79 (91%) funds reported on how the fund has met the commitments set out in its communications policy
64 (74%) funds reported on the value for money achieved by the administration function
70 (80%) funds provided an outline of the fund’s internal dispute resolution procedure (IDRP)
55 funds reported the number of new IDRP cases, with the average number of cases being 5 (the range being 0-17). When weighting the data by total fund membership the average number of cases is 6 and by active membership the average number of cases is 2
371 cases were reported by the Pensions Ombudsman as LGPS-related during the calendar year of 2024
39 funds reported the number of formal complaints received. The average number was 79 with the lowest being 0 and the highest being 943
Administration and governance costs are reported in the fund accounts and aggregated at scheme level. These increased by 5.7 per cent (£15.7 million) to £290.8 million in 23/24 from £275.1 million in 22/23
Administration costs have increased due to several key factors:
- Increased complexity of the Scheme
- Implementation of the McCloud Remedy
- Pensions Dashboard preparation
- Digital Expectations: demand for improved member communications and digital services drives IT and support costs
- Increased cybersecurity measures of protection
- Staffing pressures and rising workloads
Administration Key Performance Indicators
Data for a selection of KPIs (34 out of 54) was collected in this first ‘best endeavours’ year of reporting using the updated guidance. Of the selection analysed, data was reported, on average, in about 40 fund annual reports.
Table A within the guidance (Casework numbers) saw the highest level of compliance of reporting, while Table B (Time taken to process casework) showed the lowest level of compliance.