Employer Focus - May 2021
This bulletin from the Staffordshire Pension Fund, focuses on current issues that you should be aware of relating to the Local Government Pension Scheme (LGPS).
Ill-health guidelines and updated ill health certificates (forms) Back to top
Employers sometimes contact us seeking clarification and guidance on the employers' role and responsibility under the ill health process. To assist employers, we have a dedicated ill health webpage on the Fund's website. The webpage provides you with a step by step guide which includes:
- roles and responsibilities
Ill-health certificates (forms)
We have recently reviewed our ill-health certificates to ensure that they are aligned to the ill health forms published nationally by the Local Government Association (LGA).
We will still accept the previous certificates, that are currently being processed, but we would encourage all employers to use the latest versions for new applications for ill-health.
You can access the new certificates on our ill-health forms page. This area of the website is password protected, so if you do not have access to this area, then please contact martin.griffiths@staffordshire.gov.uk
Schools and academies - re-letting an existing outsourced contract Back to top
We are aware that academies are under some pressure to review contracts on a regular basis, but we would encourage consideration of the potentially significant factors identified below, as well as normal considerations for price and service provision.
If you have any concerns about what is involved, please get in contact with the Pension Section's Employer Team: lee.mountford@staffordshire.gov.uk
Legal requirement - to protect employee's pension entitlement
Employees who are affected, as a result of their job being outsourced to an external provider, are protected under the HM Treasury legislation. This means that schools or academies must ensure the staff transferred have continued membership of the Local Government Pension Scheme. Continued membership of the LGPS is achieved by the external provider becoming an admitted body of the Staffordshire Pension Fund by entering into an admission agreement.
Re-letting an existing outsourced contract
The same pension protection must be provided if employees transfer to another employer as a result of re-letting the contract. The re-let service must provide that the new arrangement secures continued membership of the LGPS for each transferring original employee.
Please note: where a school or academy lets a contract outside of the existing former Staffordshire County Council, now 'Entrust' direct services arrangement, that school or academy become the LGPS 'scheme employer' for all the contractor's employees working at the establishment servicing that contract.
The re-let service with the new contractor or existing contractor must provide that the new arrangement secures continued membership of the LGPS for each transferring original employee. This applies even if the contract award is made directly to the current Entrust appointed contractor.
As a result the contractor together with the school or academy will need to seek 'admitted body' status in the Pension Fund, and should note in this case the following applies:
- the school or academy normally become liable for the pension funding liabilities of the contractor's staff working at the local establishment, if the contractor doesn't have admitted body status
- these liabilities will be assessed together with the school or academy's own LGPS staff members and could impact on the establishment's future LGPS employer contribution rates
- a direct contract award may also mean the school or academy will need to compensate the contractor's employees, and the Pension Fund, in the situation where the contractor defaults or becomes insolvent
- in the case of a direct award the contractor's admission to the Staffordshire Pension Fund will need to be approved and a legal document, known as an 'admission agreement' will be required
- set up and cessation costs will apply
Example
An example of re-letting with an existing contractor is where a school or academy has services provided by a third-party organisation whose employees are members of the LGPS. If the school or academy decides to cease this agreement but then enters into a separate agreement, with the same third-party organisation, this constitutes a re-letting of the contract.
Further information
To assist schools, academies and potential bidders of the pension implication and responsibilities, we have produced an outsourcing guide.
Submitting personal and sensitive employee data to the Fund Back to top
Over the last month we have noticed that some employers have emailed the Fund with personal data which is unencrypted. This is considered to be a breach by the employer under the general data protection regulations (GDPR).
We would therefore like to remind employers that if an email or attachment contains personal or sensitive data about an individual(s) then the email should be encrypted or sent via a secure upload method to avoid a breach of the GDPR regulations.
Important: McCloud judgement - reminder Back to top
During the last year the Fund has provided all employers with regular updates and guidance to prepare you to obtain employee payroll data for past and present employees going back to 1 April 2014.
To further assist employers, the Fund has a webpage dedicated to the McCloud judgement, where you can access all the relevant information, including:
- background to the judgement
- how the discrimination within the LGPS will be rectified
- a breakdown of the payroll information the employers will be required to provide
Submitting employee data
Neither the Fund nor employers should underestimate the considerable work involved to rectify members records and the administration burden this will place on resources. Key to a successful outcome of this exercise is that the Fund and employers work together closely and in partnership.
Over the last six months the Fund has been working with its administration system provider to assist both employers and the Fund to collect the data required.
This work has enabled the Fund to identify all employees past and present who since 1 April 2014 have been, or remain a member of the LGPS, and who may potentially benefit from the McCloud judgement.
From the beginning of June 2021 we will start to contact employers providing a list of all employees that we believe you are responsible for providing payroll data for. The communication will also include a specified date that the payroll information must be submitted by the employer to the Fund.
Please note: this is an employer responsibility and whilst you may delegate the collection of data to a third-party payroll provider, the key employer contact who we liaise with must be employed from within your organisation.
Funding strategy statement (FSS) Back to top
As a result of LGPS regulatory updates on 23 September 2020, further changes were required to the FSS to reflect:
- the approach to be taken by the Fund in dealing with the uncertainty arising from the Goodwin court case
- an explanation of the circumstances under which the Fund might amend contribution rates between valuations
- detail in relation to the payment of a cessation debt and the considerations that the Fund will make before paying an exit credit in line with their exit credit
- the circumstances in which the Fund will enter into a deferred debt agreement (DDA) as an alternative to the payment of an immediate cessation debt
Consultation
Following the new regulations coming into force, the Fund's FSS has been updated to incorporate the new regulatory requirements. The updated FSS was presented for a period of consultation with employers and this has now closed. The revised FSS is now available on our website.
If you require any further information or clarification, please do not hesitate to get in touch: