Employer Focus - January 2020

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).


Printable version

If you wish to print out this information, please select the document below:


 

Internal dispute resolution procedure (IDRP) – new guide for employers

Over the course of a Local Government Pension Scheme (LGPS) member's employment and even after they have left, certain decisions are made that can affect the member’s benefits. The law provides the member with the opportunity to challenge decisions that they disagree with. Within the LGPS we have a formal IDRP to enable this to happen.

Over recent months employers have contacted the Fund seeking clarification and guidance on the employers' role and responsibilities under the IDRP process. As a result, we have worked in partnership with the employer focus peer group to review the IDRP process, documentation and guidance to create a new dedicated area of our website to support employers through the IDRP legislation.

As part of this review we have taken the opportunity to remove duplication between the employer and fund roles within the stage 1 IDRP against the employer. This improves the process and reduces timescales.

Under the new IDRP process, the complainant is no longer required to submit their stage 1 IDRP to the Staffordshire Pension Fund. The complainant will now be directed to submit their stage 1 IDRP directly to the employer (unless the IDRP is against the Fund). The employer will then acknowledge receipt of the IDRP and respond to the claimant within the statutory timescales.

Please note: the new process comes into effect from 1 February 2020

The webpages include:

Employers' operational guide

This provides employers with a step by step guide through the IDRP process. It includes:

  • your obligations
     
  • what you must consider or investigate
     
  • how you should respond to an IDRP
     
  • the member's right to appeal to the Pensions Ombudsman

Template letters

There is a suite of example letters, including an acknowledgement letter, stage 1 and 2 appeal letters etc. The templates provide guidance on the information you must provide when responding to a member's IDRP.

Members' guide to raising a complaint

This provides members with a step by step guide through the IDRP process, including how to resolve complaints without raising an IDRP, what action they can take if they are still dissatisfied, what information they should provide when raising an IDRP and where they can obtain additional help and contact details.

Members' IDRP application form

Members can download a form, complete, sign and return to the body they wish to make the complaint about e.g. their employer or the Staffordshire Pension Fund. 


 

Pensions made simple - member videos   Back to top

We are pleased to announce that the pensions made simple member videos are now available on the LGPS member as both desktop and mobile versions.

We would be very grateful if you could draw them to the attention of your staff who will find them of assistance. The videos could also be used at team meetings and induction courses to provide bite size information.


 

Annual report and accounts   Back to top

The Staffordshire Pension Fund annual report and accounts 2018/2019 are now available on our website.


 

Annual benefit statements (ABS) online   Back to top

Annual benefit statements for active and deferred scheme members will be available during 2020 to view via on our online facility - My Pension portal.

Members will be able to log in to their online account and see their 2020 statement along with previous annual benefits statements.

Alternatively, if members would like to receive a hard copy of their statement every year instead of the online version they can contact us: 

It is essential that members view their annual benefit statements on a regular basis to track their pension build up and ensure that the data we hold on their records is correct. Any errors can have a dramatic impact on the value of their future benefit entitlement if not spotted.

Every active and deferred member will be sent a letter during 2020 to give them details of how to log in and create their own online account on the My Pension portal.

We would appreciate your support in encouraging employees to sign up to use this facility. To assist with this we will make available a variety of different forms of communication material.

If you would like to speak to someone about My Pension portal please get in contact:

 


 

New employer admissions - important reminder   Back to top

Employers, who are considering TUPE transferring services to an external company, should contact the Fund at the earliest opportunity to ensure that pension implications and potential costs are considered at the outset of any tendering process.

This will ensure that the employer can factor in any pension issues and costs in their tender documents and prospective contractors can price these costs accurately into their bids. This will avoid potential and unnecessary delays and complications at later stages of the tender process or after the contract has been awarded.

Legal obligations

Where applicable, a TUPE transfer of employees who are members of, or are entitled to be members of, the Local Government Pension Scheme (LGPS) must adhere to the principles of 'best value direction' and the new 'fair deal' pension protections.

These HM Treasury documents set the pension protection requirements for staff compulsorily transferring from the public sector to independent providers delivering public services under TUPE.

Which organisations does best value direction and new fair deal apply to?

Best value contractors

  • unitary authorities (including schools)
     
  • town councils
     
  • parish councils
     
  • fire and rescue authorities

Fair deal

  • academies and maintained schools (where staff are not employed by the local authority)

For the organisation types listed above these protections mean that in most cases the transferring staff must be given continued access to membership of the LGPS and the new employer is required to apply for 'admitted body' status in the Staffordshire Pension Fund.

Admitted body status

Under the LGPS regulations the letting employer and the new employer (contractor) must sign and enter into an admission agreement. The setting up of an admission agreement will incur a legal or actuarial cost.

Where an employer (contractor) is to be treated as a 'standalone' body, there will also be additional actuarial costs relating to the need for the actuary to make an appropriate assessment of an on-going employer's contribution rate for monies that should be paid to the Fund on behalf of transferring employees. An early indication of such may also be helpful to include as information for prospective tenderers.

The Fund is mindful that the legal or actuarial costs are borne by the letting employer or new employer (contractor) and has explored ways to reduce and cap the legal costs.

As a result, standard legal or actuarial charges for admission agreements have been introduced, which are detailed below:

TUPE transfer of 10 or more employees

Legal costs:

DescriptionCost
Non–negotiable standard admission agreement £1,500 + VAT
Complex or negotiated admission agreement £2,250 + VAT

Initial actuarial costs: 

DescriptionCost
Pensions information memorandum (employer contribution and risk assessment) £2,300 + VAT

 

TUPE transfer of less than 10 employees – small employer or contractor

Legal costs:

DescriptionCost
Non–negotiable standard admission agreement £1,500 + VAT
Complex or negotiated admission agreement £2,250 + VAT

 

In these circumstances, this type of admission will be treated as a 'pass through' arrangement, whereby the assets and liabilities remain with the letting employer at the end of the contract period. The employer contribution rate for the contractor will normally be aligned with the unadjusted 'primary' contribution rate the actuary has agreed for your organisation at the previous Pension Fund valuation.

This will be the default option for small employers unless we are advised that the 'standalone' admission arrangement is preferred in which case the costs will be in line with those outlined for 10 or more employees.

If you are in any doubt how this process can work with your organisation, please contact us for more information.


 

Further information   Back to top

If you require any further information or clarification, please do not hesitate to get in touch: