Transcript PLOG Presentation - 18/19 September 2012
Local Government Pension Scheme
PENSION LIAISON OFFICERS’ GROUP (PLOG)
Presented by Andy Cunningham 18 & 19 September 2012
Local Government Pension Scheme
Agenda 1. Welcome/Attendance 2. FRS17/ IAS 19 3. LGPS Reform 2014 4. LGPS Regulations Changes & Auto-enrolment 5. Performance Statistics, Administration Strategy & Pension Regulator 6. Pension Section Re-Structure
Local Government Pension Scheme
FRS17 / IAS 19 Reports
Catherine Dix – Fund Investment & Accounting Manager
Local Government Pension Scheme
2. FRS17/ IAS 29
Agenda
• What are they?
• Do I need one?
• What is the process?
• Who do I contact?
Local Government Pension Scheme
2. FRS17/ IAS 29 What are they?
• FRS 17/IAS 19 is an accounting standard • The report assesses the Employers Pension Liabilities as at a certain date • The report provides all the disclosures for your accountant to insert within your Annual Report • FRS 17/IAS 19 is
NOT
the Triennial Valuation
Local Government Pension Scheme
2. FRS17/ IAS 29 Do I need one?
• New employers need to liaise with their Auditors • Wiltshire Pension Fund will contact you to confirm your requirements • Assumptions for Report ultimate responsibility of Directors of your organisations
Local Government Pension Scheme
2. FRS17/ IAS 29 What is the process?
• Wiltshire Pension Fund commission the reports • You are required to confirm: – Choice of report (FRS17 /IAS 19) – The accounting Basis (CIPFA, Stand FRS17, FReM) – Acknowledgement of Fee – Confirmation of Assumptions to be used – Acceptance of Terms of Engagement
Local Government Pension Scheme
2. FRS17/ IAS 29 Who Do I Contact?
• Catherine Dix ( [email protected]
) – Tel 01225 713698 • Mark Anderson ( [email protected]
) – Tel 01225 718299
Local Government Pension Scheme
3. LGPS Reform 2014 a). Background
• Government asked Lord Hutton to review all Public Sector Pension Schemes • Hutton produced a report last year and made a number of recommendations • • Recommendations accepted by the Government Government released details of a proposed LGPS scheme, which has now been largely accepted by the Unions • New Regulations due by 31 st March 2013, which will apply from 1 April 2014 • Main details available now but the exact arrangements of the 2014 Scheme will not be available until the Regulations are finalised.
Local Government Pension Scheme
3. LGPS Reform 2014
• • • • • • • • •
b). Current Proposals (in Brief)
Change to Career Average Revalued Earnings (CARE) Scheme New Accrual rate of 1/49ths ‘Underpin’ Protection for those within 10 years of retirement Employee Contribution Bands to remain but to be based on actual earnings rather FTE Salaries in future.
Contribution Rates to increase for higher earners Scheme Retirement Age to match State Retirement Age.
Return to 2 year vesting period (amount of time allowed up to which someone can have refund of employee contributions if they opt out) 50/50 Scheme (half the contributions, half the benefits) Overtime included in pay and for service calculation
Local Government Pension Scheme
3. LGPS Reform 2014
• • • •
c). Impact on Employers
• • •
Administration & Payroll
Payroll systems will need to be changed to allow for changes to the employee contribution rates (using actual salaries + different bands) Accurate End of year reporting will become very important as each years figure will form part of the pension calculation.
Pension Forms will change – more final pay calculations likely More refunds over tax year ends.
Changes to discretion policies and related HR policies 50/50 Scheme will provide extra payroll and administrative complication Change in definition of pensionable pay
Local Government Pension Scheme
3. LGPS Reform 2014 c). Impact on Employers
• •
Finance
It is anticipated that in the short-term, the Scheme will not be any cheaper (partly due to the protection) but in the long-term there should be some modest savings (but less than originally anticipated!) Regulations due by 31 March 2013, so that actuaries can take into the changes when considering new employer contribution rates as apart of the 2013 Valuation.
Local Government Pension Scheme
3. LGPS Reform 2014 d). Impact on Members
•
Short-term
Changes to employee contribution rates will be favourable for part time workers but more costly for higher earners.
•
Longer-term
Changes to benefit package (changes generally benefits those with a more modest career progression in terms of salaries but not those with larger salary increases over time)
Local Government Pension Scheme
3. LGPS Reform 2014 What’s next?
Once full details are available about the new scheme in Spring 2014, the Pension Fund will review its procedures and begin increasing member and employer communications in preparation for the new start date
In the meantime,
further information about the reforms can be found on our website.
Local Government Pension Scheme
4. LGPS Regulations Changes & Auto-enrolment a). LGPS Regulation Changes
• • • Scheduled Bodies: Staff with a contract of three months or less, or no contract at all, are now eligible.
Changes apply with effect from 1 October 2012 Need to communicate this to current and future casuals • • • Resolution/Designating Bodies: Staff with a contract of three months or less, or no contract at all, are now eligible.
All new ‘designated’ employees (with a contract of 3 months or more) need to be auto-enrolled with effect from 1 October 2012.
May need to pass a new resolution to clarify which roles are designated and to bring in-line with the changes
Local Government Pension Scheme
4. LGPS Regulations Changes & Auto-enrolment a). LGPS Regulation Changes (continued)
• Admitted Bodies: For contracts that will apply from 1 October 2012, all TUPE transferring staff will need to be auto-enrolled into the LGPS from the transfer date (even if they opted out prior to transfer)
Local Government Pension Scheme
4. LGPS Regulations Changes & Auto-enrolment b). Auto-enrolment
• • • • In brief: All employers will need to comply with Auto-enrolment legislation by their staging date Staging dates are decided by PAYE size. Applies to the largest organisation from October 2012, smaller organisations over the next few years up to 2017.
Pension Regulator has large amounts of information on-line and will be responsible for ensuring compliance (through warning notices/large fines etc) Basic requirement is to auto enrol ‘eligible jobholders’ into a ‘qualifying scheme’ (such as the LGPS) by each employer’s staging date.
Local Government Pension Scheme
4. LGPS Regulations Changes & Auto-enrolment b). Auto-enrolment
• • Further information The legislation is complex – so you will need to look into it properly Involves relatively large amounts of administration (sending out letters, monitoring changes in ages and salaries) • • Actions Required now Find out your staging date Allow at least several months prior to your staging date to ensure that your have the necessary arrangements in place to ensure your are compliant.
Local Government Pension Scheme
5. Performance Statistics, Administration Strategy & Pension Regulator Administration Strategy Some Key Employer Targets Retirement Forms
– to be received at least 15 working days
before
person’s retirement date the
Starter, Change & Leaver Forms
– to be received within 25 working days of the date of the person starting/changing/leavers.
Note
: It is useful if you can clarify with anyone who leaves, and is aged over 60, whether or not they wish to draw their pension at that time.
Local Government Pension Scheme
5. Performance Statistics, Administration Strategy & Pension Regulator Pension Regulator
New Compliance Requirements for Dec 2012 Requirement for ‘common data’ •For new data created after June 2010 – 100% accuracy.
•For legacy data (created before June 2010) – 95% accuracy ‘Common Data’ includes: NI Numbers, Addresses, Names etc Furthermore, this includes having all members set up or set as leavers etc on our system.
Failure to comply could result in fines from the Regulator (to us)
Local Government Pension Scheme
5. Performance Statistics, Administration Strategy & Pension Regulator Performance Statistics
Our procedures and systems have changed and we are again recording figures to identify areas where employers and the Fund can improve their service to members.
In August (across all employers) – forms received in the target time
Retirements:
42%
Leavers:
20%
Starters:
26%
Changes:
22%
Local Government Pension Scheme
Wiltshire Pension Fund – New Structure
Head of Pensions (David Anthony) Fund Investment & Accounting Manager (Catherine Dix) Pensions Manager (Martin Summers) Accounting Technician (Mark Anderson) Investment Officer (Emma Knibb) Employer Relationship & Fund Development Manager (Andy Cunningham) Projects Officer (Alison Tucker) Fund Communications Manager (Zoe Stannard) Compliance & Technical Adviser (Tim O’Connor) Administration Assistant (Vacant) Benefits Manager (Jennie Green) Systems Manager (Martin Downes – starts Dec 2012) 3 x Senior Pensions Officers (Debbie Rawlings, Sharon Evans & Sharon Bedwell) Systems Officer – Altair (Martyn Barber) 4 x Pension Officers (Annette Jarvis, Ian Gaffakin, Elaine Doogue & Denise Seus) Systems Officer – Members (Vacant) Systems Assistant (Temp – Esther) 3 x Pension Assistants (Shirley Wood & vacant)