Agenda item

Report of the Director for Corporate Services

The Committee were informed that, regulations state, and best practice dictates, that a Pension Fund should have a range of written policies and procedures in place. Having such, not only proved regulatory compliance, but, more importantly, demonstrated good governance and provided a range of information to stakeholders. Whilst the Staffordshire Pension Fund was compliant in having the full range of policies in place, following an initial audit by Officers, it was identified that some policies were out of date and in need of review. An ongoing work program was therefore put in place, to ensure that, over the last two years, the Fund had reviewed and updated all its policies. The Administering Authority Discretions Policy was the last of these.

Going forward, it was proposed that officers would draw up a review cycle to ensure that all policies were reviewed at least every 2-3 years or annually, where regulation dictated, or best practice suggested. These would be brought to Pensions Committee for approval and consulted on more widely if such was required under regulations or considered appropriate.

The Committee noted that the introduction of the 2014 Local Government Pension Scheme (LGPS) Regulations was the trigger for a review of Administering Authorities policies. The Administering Authority Discretions Policy related to several areas within the Regulations where Staffordshire County Council, as the Administering Authority of the Staffordshire Pension Fund, may exercise its discretion. The current Administering Authority Discretions Policy was approved by Pensions Committee on 20 June 2014 and was published in accordance with the 2014 guidance before 30 June 2014.  Each Scheme Employer must also produce and publish their own policy document in respect of their own areas of discretions and send a copy to the Administering Authority, for information.

Due to the length and technical complexity of the Discretions Policy, a regular review of the policy had not been undertaken since it was published, and the policy approved in 2014 remained the current version. The outdated policy was picked up as part of Officers’ initial audit of scheme documentation and the opportunity for a complete refresh had now been taken.  The Administering Authority’s new policy document was divided into 3 main areas:

·       Pensions Benefits and Administration - This section dealt with discretions in respect of such things as Transfer and Aggregation of benefits; Commutation of benefits: Internal Dispute Resolution Procedures; Payment of Death Benefits; and General Administration matters.

·       Statement of Policy - This section stated the mandatory policies that an Administering Authority should have i.e., Governance Compliance Statement; Funding Strategy Statement; and Communications Policy.

·       Employing Authorities - This section outlined the way in which the Administering Authority would deal with other Employing Authorities on matters such as Admissions and General Administration matters.

The Director for Corporate Services explained that, as well as minor amendments being made to the wording around the existing discretions, the policy document itself had been shortened and re-ordered to make it more readable and user-friendly. The policy had been updated with three discretions relating to the introduction of the Local Pensions Board under the LGPS Regulations 2013 (page 21).

Following recent Pension Ombudsman’s determinations and best practice guidelines, the opportunity to review the discretions relating to the payment of death grants had been taken. Whilst there were no fundamental changes to the current principles, several changes had been made to the discretions which now provided for greater transparency on the personal circumstances that might apply when this discretion was exercised. 

The Director added that two important Regulations were only briefly described in the Policy document: Regulation 55 - Governance Compliance Statement and Regulation 58 - Funding Strategy Statement. The Fund’s detailed policy covering these Regulations was contained in separate documents which the Committee would review and approve separately from time to time. 

The Committee noted that, given that the policy dealt with the discretions of the Administering Authority, then an element of independence should be maintained in the approval of the individual discretions. Therefore, wider consultation with multiple stakeholders, who arguably might seek to influence and potentially benefit, was not considered appropriate in this instance.  

RESOLVED – That the revised and updated Administering Authority Discretions Policy (attached as Appendix 2 to the report) be approved.