Afzal Chowdhury (AC) - Head of Legal Services, Hertfordshire
Superintendent Jon Hutchinson (JH) - substitute Superintendents Association BCH representative, Cambridgeshire
Graeme Hall (GH) - XPS outsourced BCH pension administrators
Kevin Courtney (KC) - NPCC Pensions Advisor
1.Welcome and apologies
SG welcomed attendees to the meeting and apologies were noted as above.
2. Approval of minutes and actions – 25 January 2021
Minutes were amended and then approved as a true and accurate record of the meeting. Action tracker was updated.
3. Conflict of interest – declaration and registry
No conflicts of interest
4. Board Membership
JH updated that he was stepping down from Board and this will be his last meeting. JH is continuing with NPCC Pension work. James Cook, Director of Resources will now attend the next meeting in June 2021 as CFO representative.
5. Remedy update
JH talked through the below topics:
Treasury remedy announcement- approach and timescales
JH updated that the Government made an announcement and embedded in the summary information was an email link and hyperlinks for people to ask questions and get information.
Members of a pension scheme as at 31st April 2012 and had membership from 31st March 2015 onwards they are the group that are eligible for remedy.
Members of pension scheme who joined after April 2012 remedy does not apply.
The remedy period is going to close at the end of March 2022.
The Government has chosen to go with the deferred approach to remedy as opposed to immediate remedy. This was supported by the staff Associations and the majority of Forces.
Deferred choice has two strands to it. Members are going to be defaulted on to their legacy pension arrangements. That will happen from October 2023.
Where a member is retiring they will be able to exercise that choice of retaining their legacy pension membership for those seven years or reverting and changing back to reform benefits.
There is a complex issue on how to treat those members who are choosing to retire before October 2023, at which point the legislative remedy has to have been implemented, but if they are retiring before this point they are reliant upon the ET judgement and many of the aspects of detail and compliance particularly to do with Tax are not in place to support that.
There is a website for information which will be updated. There is an email account for Officers to raise individual points and if someone is looking to retire shortly with 2015 members, process wise they need to commence engagement with the Employer using he iQuery system.
Question: DJ raised a question: James - with deferred remedy how do members get value statements in order to determine how they want to act. E.g. I may choose scheme pays if I am at risk of lifetime allowance breach or I may choose member pays if this is not a risk but I don’t know because I needs some quite complex calculations.
JI updated that the questions are real questions received via the BCH Pension Challenge mail box, iQuery and one question came via Federation. We have provided the answers as best we can. They have not been published anywhere. We have sent the general themes across to the NPCC. Kevin Courtney is putting together a general FAQs on this basis which will answer some questions in general.
The main themes are that people want to know what it means to them individually. They want to know when they hit 30 years’ service and they were previously in the 1987 for example when they can take that pension benefit and what happens to the 2015 scheme benefit if they are going after April 2022. We can give them answers but no figures.
Another issue that came up was that people who worked part time, had they stayed in the 1987 scheme might have opted to pay some added years if they could do under those regulations to boost the part time period that they had. They will obviously be moving to the 2015 scheme in April 2022 and they want to know if they have a retrospective right to be able to buy some part time service under the old 1987 rules. This is still being discussed. There are still a lot of unanswered questions.
JH updated that there is a minimum normal pension age, the normal pension age is 55 with the 87 scheme or age 60 with 2015 scheme, you have your state pension age, but you also have a minimum normal pension age. It is obtaining the minimum pension age that gives you special advantages. The minimum normal pension age is 55. The Government will increase this to 57 years in 2028.
BCH implementation planning
JH updated that there is a cycle between the policy being better defined which means that gets expressed in the legislation and the regulation and this will happen over the next 12 months. In parallel the NPCC are working with the software developer Heywoods and with XPS and other pension administrators who work with Heywoods are looking at how the system and the processes can be best developed to deliver remedy to meet those dates.
Locally in BCH we are aware of the need to get the validation of our data. Have we got the correct 7 years data? Make sure we understand the entirety of our remedy group.
This has been covered previously.
6. GMP reconciliation report
Paul Mudd gave an update on the papers. One action arose.
The reconciliation paper talks about the work we have done so far. For 18 months we have received data from HMRC which told us what GMP liabilities were held at HMRC and we have been reconciling them against the data that we hold on the software. We have split this work into active and inactive.
Any cases in the unresolved column then go to the next stage of GMP. This is the rectification stage.
The Rectification stage is made up of three phases which is having another cut of data from HMRC and a final reconciliation and then moving into the calculations of the under or overpayments and the communications they required with the scheme members to basically outline what GMP reconciliation and rectification is all about and what it means to them and their pensions.
On the rectification paper this talks about the three stages. Stages are analysis then the reconciliation and rectification. We do not know how long these stages will take at the moment.
With regards to write off of overpayments, Paul Mudd believe that the decision on this would come from the Home Office with their funding.
Action: Paul Mudd – XPS: Hertfordshire numbers on the report are so much higher than Beds and Cambs. Paul Mudd will do an analysis on the numbers in case it is a bigger issue in Herts and make this a priority. It appears that for whatever reason reconciliation is not happening. It could be an admin issue or because there is a lack of dates or data. Paul Mudd to report back on findings.
7. XPS update report
Paul Mudd talked through the quarterly report. No actions arose.
The trend at the moment is the 87 scheme active members are dropping and this is consistent across the three forces.
Data quality update: We have not been able to progress on conditional data testing from where we were nine months ago. Some time ago we started to create these tests ourselves. With our common data scoring we test on a monthly basis and we use the errors from those tests to continually data cleanse. Whereas conditional data, the product that we were considering purchasing was a substantial cost and only gave us one test per year. This meant that we could not do the regular updates to the data that we wanted to do. We maintain that our approach is right at the moment. Our systems team are carrying out valuation, extract data and account reporting.
8. Risk register
JI talked through the risk register. No actions arose.
JI updated on the board risks. There are three amber risks
When there is a change in board members there is a risk that not all are up to speed and so this is left as amber.
GDPR is still amber and data protection is always going to be a risk.
Incorrect member data from an administration perspective has been covered before. Things like addresses where members are supposed to keep XPS up to date, there is only so much we can do as a force.
Automatic enrolment – this will stay on the risk register but be lowered to a green rating but to remain as a risk for three years’ time when this process comes around again.
Injury Award and Incapacity Benefit this is still ongoing and should be resolved in April 2021.
McCloud – this is still red and immediate detriment does need to be referred to. The imminent issue of dealing with people who have got an ET based entitlement and not a legislative entitlement is now a red area. This should be made a separate risk.
GMP and the Herts numbers should be added as a risk.
Loss of Active Pension Members: Leave this risk on as an amber in light of McCloud.
9. Any other business
No other business to discuss.
Date of next meeting: Monday 7 June 2021, 10.30am via MS Teams
James Cook, Director of Resources to be invited to represent the Herts Employer side.