Benefits

Pension benefits, member services and communications

The 5.3 million members of the LGPS receive a life time membership service and regular information about LGPS benefits from their host LGPS pension fund upon joining the scheme, via annual benefits statements, upon leaving the scheme, or becoming a pensioner.

It is pleasing the vast majority of LGPS members appear to welcome and are content with the information and benefits they receive and the LGPS complies with Pensions Regulator guidance and codes in respect of member communications.  The Pensions Regulator provides a report of its work below.

Based on reports from the the Pensions Ombudsman (PO) (see below) a small minority are recorded as making formal complaints about their pension benefits initially to the Pensions Advisory Service (TPAS) and if they are still not satisfied to the PO. The vast majority of cases concern employer decisions about ill-health retirement and or calculation of ill health retirement benefits. This is in line with most other occupational pension schemes.

The Pensions Regulator

The Public Service Pension Scheme Act 2013, was not only the catalyst for the introduction of the LGPS 2015, and the associated creation of Scheme Managers and Pension Boards, it also extended the powers of the Pensions Regulator (TPR) to oversee compliance with the Governance and administration provisions of the Act, as they apply to all public service pension schemes, including LGPS.

Opening actions

During the first year one of the first steps towards compliance was to establish a Pension Board and then publish details of its members and how the board had been formed with the inclusion of an equal number employer and member representatives, plus as an option an independent chair. All of this information must be freely available to all members.

Also during the first year a great deal of time was spent by TPR in establishing how LGPS Scheme Managers and others would be measured against the new and higher standards of governance and administration. The initial findings were contained in TPRs first annual survey which disclosed mixed levels of response and progress towards achieving full compliance.

There remains an ongoing drive on the part of TPR to improve standards of governance across all Public Service Schemes. This drive includes producing additional, tailored educational tools to support Scheme Managers, Pension Boards and others which will assist these parties to both identify and manage risks within their scheme. Areas of particular concern to TPR include record keeping, control processes and the delivery of timely and accurate communications.

In addition to producing on line material TPR works closely with others who can influence improvements. These others include the LGPS Scheme Advisory Board, which has direct access to the Responsible Authority, and those providing secretariat support at the Local Government Association.

TPR working with LGPS Boards and others

To further raise TPR’s profile and reinforce key messages TPR is starting to meet some of the over 90 chairs of the LGPS Pension Boards and where requested presenting to the Pension Board. Similarly TPR has and will continue to attend and present at industry wide events, including those hosted by LGA and PLSA.

The purpose behind these various forms of engagement is a reflection of TPRs policy of education and enablement which TPR uses to regulate both Scheme Managers and Pension Boards. If it is found that this approach is not achieving the desired outcomes then TPR has a range of enforcement powers at its disposal. These powers are wide ranging and are used as a proportionate response to the issue in question. In addition to being proportionate TPR has a recognition that it needs to be accountable, consistent, targeted and transparent. To assist with this TPR will publish details of the majority of cases that reach the enforcement stage once they have been decided.

In conclusion

Finally, on top of the work undertaken by TPR to ensure compliance, there is an overriding legal duty on the part of Scheme Managers, Pension Boards, employers and others providing advice to the Scheme Manager to report to TPR a breach of the law that is of material significance. Guidance is provided, using a traffic light system, on what is material and so what must be reported, or if not reported then recorded for future reference.

March 2017

Complaints handled by the Pensions Ombudsman

The Pensions Ombudsman (PO) determined 56 enquiries/complaints of a total of approximately 91 cases regarding the LGPS during the year. A breakdown of the complaints and Pensions Ombudsman (PO) determinations is shown below.

Most complaints were about ill health and other retirement benefits. The PO upheld <15% of complaints with the vast majority around 75% being either not upheld, or were rejected, referred elsewhere, or resolved without the need for a PO determination. This represents a significant shift over the year to closing investigations informally, without progressing cases to formal determination.  Overall the LGPS has had relatively few upheld complaints.

Pension Ombudsman Determinations and Case topics