October 2005 TO ALL CHIEF OFFICERS OR SENIOR PENSION OFFICERS
NILGOSC has a statutory duty to administer the Local
Government Pension Scheme Regulations (
Pensions legislation has become increasingly complex and contentious and only by shared responsibility can we hope to go forward and continue to maintain a first class service to scheme members.
The Committee aims to invest the assets of the Scheme prudently, to ensure that the benefits promised to members are provided and to provide reasonable stability in contribution rates for the employers. This service level agreement is for both the Committee and Employers to set standards and levels of performance so that the administration costs of the pension scheme are kept to a minimum and that contribution and other income due to the fund by employers is paid promptly, so as to maximise investment returns.
I attach the Service Level Agreement effective from 1 January 2005, which has been agreed after consultation with a selection of our employers. I have tried to keep the agreement concise and jargon-free so that there is no ambiguity regarding the targets set for the Employer or NILGOSC. Any requests for amendment should be made before the effective date.
In preparing the statement the following pieces of legislation have been taken into consideration:
1) The Local Government Pension Scheme legislation referred to in 1.2 of the statement.
2) The legislative requirements governed by the Pensions Regulator (PR), which exists to monitor that legislative requirements are adhered to. PR also has the authority to levy fines for non-compliance under The Pensions (N.I. Order) 1995.
3) The Data Protection Act 1998.
4) The Occupational Pension Schemes (Disclosure of Information) Regulations (N.I.) 1997.
5) The Occupational Pensions Schemes (Contracting-Out) Regulations (N.I.) 1996.
Please read instructions
inside booklet for completion of forms.
D
SERVICE LEVEL
AGREEMENT
A charter of co-operation between the
Commencement Date:
1.1 This
Charter is concerned with the routine but important duties and responsibilities
of administering the Local Government Pension Scheme (
1.2 The principal Regulations forming the basis of this agreement are:
The LGPS Regulations (N.I.) 2002
The LGPS (Amendment No. 2 and Transitional Provisions) Regulations (N.I.) 2002
The Local Government (Early Termination of Employment) (Discretionary Compensation) Regulations (N.I.) 2003
2.1 This Agreement will be reviewed every 3 years.
3.1 The employer shall:
· Nominate a person who will act as the NILGOSC primary contact.
· Nominate an authorised officer(s) who will validate forms and requests for information.
· Ensure all pension scheme forms and requests for information sent to NILGOSC are signed by an “authorised officer(s)” responsible for the information whose name(s) and specimen signature(s) is held by NILGOSC.
· Ensure that details of the “primary contact” and the “authorised officers” and their signatures are kept up to date with changes notified immediately to NILGOSC.
· Provide NILGOSC with year-end information to 31st March each year (in lieu of monthly returns) in an approved format no later than the last working day in May.
The information provided must include a final statement, duly authorised, reconciling the amounts paid during the year with the total contributions deducted and the total contributions due. A separate return and reconciliation is required for members paying additional voluntary contributions (AVCS).
3.2 During
the year the employer will use its best endeavours to forward notifications to
NILGOSC within a target of 95% of cases, as follows:
TASK STANDARD
(Working Days)
Employee joining Scheme (LGS 1) Within 10 days of starting date.
Change in member’s circumstances Within 2 months of event.
(LGS 14, 16, 33, 34)
Member leaving the scheme (LGS 15) Within 10 days of leaving date or
(Not entitled to immediate benefits) date of final payment (if later).
Member leaving the scheme (LGS 15) Within the period of 5 days before
(With entitlement to immediate benefits) and 5 days after retirement date or
date of final payment (if later).
Death in membership (LGS 15) Within 10 days of date of death or date of final payment to representatives.
Notifications to employees or personal representatives:
Member leaving the scheme (LGS 5 or 31) Within 10 days of leaving date or
(Not entitled to immediate benefits) date of final payment (if later).
Member leaving the scheme (LGS 51) At least 3 months to 5 days prior to
(With entitlement to immediate benefits) retirement date or within 5 days of date of final payment
Death in membership (LGS 18) Within 10 days of date of death.
3.3 Under the Data Protection Act 1998, the employer must protect from improper disclosure, any information about a member contained (where applicable) on the NILGOSC pensions administration system, on member’s membership certificates and any other information sent from NILGOSC. The Employer must only use information supplied or made available by NILGOSC for the operation of the Local Government Pension Scheme (N.I.).
3.4 Under the Occupational Pension Schemes (Disclosure of Information) Regulations, the employer will issue to all new members eligible to join the Scheme, at the time of appointment, a copy of the scheme explanatory booklet ‘An introduction to the Local Government Pension Scheme (Northern Ireland)’
3.5 The employer will publish, maintain and review a set of Policy Discretions afforded to an employer by the LGPS (N.I.) Regulations 2002 and the LGPS (Early Termination of Employment) (Discretionary Compensation) Regulations (N.I.) 2003. A copy of (or amendment to) the policies to be sent to NILGOSC.
3.6 The employer will deduct employee and employer contributions at the correct rate, including any contributions due for leave of absence with reduced or no pay and any additional contributions NILGOSC has requested the employer to collect.
3.7 Contributions, or an estimate of the contributions, (including Equitable Life additional voluntary contributions) will be paid to NILGOSC on a monthly basis by bank electronic credit transfer. If an estimate of contributions is paid, any reconciliation balance will be adjusted and accounted for within that month. Details of the payment paid (Form LGS 6 or approved substitute) will be forwarded to NILGOSC before the payment due date. Payment is due on the first working day of the month following the month to which the contributions relate. If payment is made more than 10 days late, interest in accordance with the regulations may be charged.
3.8 The AVC Contributions to Equitable Life (Form AVC 7) requires to be forwarded at the same time as the LGS 6. AVC Contributions to the Prudential will be paid directly to the Prudential within 10 days of deduction.
3.9 If payment of contributions, including AVCS,
is not paid by the 19th of the month following the month to which
the contributions relate the Pensions Regulator may fine NILGOSC under the
provisions of the Pensions (
3.10 In the event of NILGOSC being fined by the Pensions Regulator, for the employer’s action or inaction resulting in its failure to comply with the terms of the Pensions Order (e.g. late payment of contributions; the failure to notify a retirement within the time limits), the fine levied will require to be paid by the employer.
4.1 NILGOSC will act for the employer and be responsible for:
· Issuing membership certificates to new members.
· Maintaining members records accurately in accordance with the information provided by the employer
· Determining, calculating and paying benefits to members, deferred members and pensioners on death, retirement and leaving the scheme.
· Payment on an agency basis, if requested to do so by the employer and at an agreed administration cost, any annual compensation pensions and subsequent dependant’s compensation pensions awarded by employers under the Discretionary Compensation Regulations.
· Issue forms, newsletters, explanatory booklets, technical notes and other information as necessary to employers for the efficient administration of the Scheme together with an Employers Guide to the Scheme.
· Providing employer training seminars and induction, benefit and retirement seminars.
· Issuing annual benefit statements to members by 31 October each year provided employer has provided accurate year-end information by 31 May. Statements may not be issued if information is provided late, inaccurate or annual return enquiries remain unanswered.
4.2 There is an open invitation for employer’s Pension Officers and other relevant staff to visit the NILGOSC office, subject to notice, to discuss any aspect of the scheme.
4.3 NILGOSC will use its best efforts to meet the following performance targets in at least 95% (or better) of cases.
Lump sum retirement payments 5 Days
Death grant payments 5 Days
Leaver options notifications 20 Days
Refund payments 5 Days
Provisional transfer out quotations 20 Days
Inward transfer quotation requests 10 Days
Inward transfer credit notifications 10 Days
New entrants certificates 20 Days
Letters answered or acknowledged 10 Days
Issue members’ annual report By 31 October
Issue members’ annual benefit statement By 31 October
Individual benefit quotation requests 10 Days
Pensions paid each month Last banking day of month
P60’s issued to all pensioners By 31 May
Issue of Annual Return queries Within 12 weeks of receiving
correctly formatted details.
4.4 NILGOSC will also:
4.4.1 Monitor all regulation amendments made by the Department of the Environment (N.I.) and advise the employer of the appropriate action to be taken.
4.4.2 In exceptional circumstances, where an employer has not conformed with the actuary’s assumptions, the Committee will require to advise the Scheme Actuary, on the employer’s behalf, of any circumstances which may adversely affect the scheme’s funding level which may require a separate employer’s contribution rate to be paid by the employer e.g. redundancy exercises, high levels of ill-health retirements and unpaid sick leave etc.
4.4.3 Communicate with the Inland Revenue on the employer’s behalf regarding all contracted-out employment matters.
4.4.4 Produce and distribute to employers an Annual Report and Accounts together with a copy of the Local Government Auditors Report. An abbreviated Members Report will be issued to all members, deferred members (for whom a current address is held) and pensioners.
4.4.5 Provide employers as soon as possible after the triennial actuarial valuation with a copy of the Actuary’s Report and certificate of the employers’ contribution rate to be paid for the ensuing three year period.
4.4.6 Monitor Service Level performance of all Scheme Employers and communicate directly with the primary contact where service levels are below the required standards.
5.1 The costs of administration are directly charged to the Superannuation Fund and the Actuary takes these costs into account in assessing the employer’s contribution rate. Exceptionally, where additional costs are incurred for work which is not common to all employers, or which can not be regarded as a cost of administration, e.g. reminder letters about outstanding Annual Return queries; persistent late submission of forms resulting in excessive retirement grant interest; late payment of compensation benefit charges etc; then the Actuary may advise that the employer who occasioned the additional work be required to directly reimburse those additional costs
.
5.2 If NILGOSC fails to meet a service standard(s) which effects a service breach to an employer, NILGOSC will ensure that the employer is put in a position as if the maladministration had not occurred. This will include recompense of loss, if appropriate.
5.3 Any quality problems experienced by an employer with the service delivery of NILGOSC
will be immediately reconciled following investigation. Such problems should in the first
instance be submitted to the Pensions Manager at NILGOSC.