Agenda item

The Director of People and Development presented the report which provided an update on the Lancashire Fire Local Pension Board for the period 1 April 2021 ? 31 March 2023. 

Members noted that the Public Service Pensions Act 2013 introduced the requirement to have a Local Pension Board to assist in the governance of the Scheme. The Board had no remit as a decision-making body but was established to assist the Scheme Manager to fulfil functions which covered all aspects of governance and administration of the Firefighters’ Pension Scheme.   The Authority was the Pension Scheme Manager and this responsibility had been delegated to the Director of People and Development.  The Board’s Terms of Reference required that it met approximately twice a year and the Chair of the Board could call additional meetings as required. It was noted that there were two meetings held per year during the period as planned.

Membership

Three new members were appointed to the Board during the year 2021-22, a Chair, one employer and one employee representative.  All changes were carried out in accordance with the Board’s Terms of Reference.  There were no further changes to the Board membership in 2022-23.

Work Programme during 2021/22

During the period 2021/23, the hard work and commitment of everyone who had contributed to the work activities involved in fire pensions, meant that key activities continued to be delivered and projects progressed. The focus had been on the following 3 major projects: i) the implementation and backdating of pensionable allowances within LFRS e.g., Day Crewing Plus Allowance; ii) the Sargeant/McCloud judgement relating to age discrimination; and iii) Matthews’s judgement affecting on-call members commonly referred to as the ‘Second Options Exercise’.

The implementation of pensionable allowances within LFRS commenced in June 2020 when certain allowances were deemed pensionable for future payments.  Around April 2021 significant and complex work commenced on arrangements for backdating contributions for existing and former employees.  Knowledge and capacity to undertake this project was initially sought via two existing members of the Human Resources Team.  However, in September 2021 a Temporary Pensions Coordinator was appointed to assist with this workload. Over 350 individual calculations were undertaken to ensure employee pension contributions for the whole of the backdating period (1/6/2015 – 31/5/2020) were corrected, with repayment arrangements put into place where appropriate.  In addition, LFRS worked with its pension administrators, the Local Pensions Partnership (LPPA) to ensure backdated pension payments to retired members.  In March 2022, a Temporary Pensions Advisor was also appointed, with a focus on delivering the requirements of the Sergeant/McCloud and Matthews cases.  Although complex, Officers worked with key stakeholders to gain understanding and establish the workloads involved, to successfully process the relevant pensions once the regulations are in place. Significant work had already taken place and was continuing. The Board had received and considered update reports at key project milestones.

The Board had also been informed about a number of complex cases which had been dealt with over this period, including through the Internal Dispute Resolution Procedure (Appeals). It continued to focus on key areas identified by the Pensions Regulator and maintaining an oversight of the key risks to the fund. A Risk Register was developed in October 2021 which had been reviewed at subsequent Board meetings.

Training

To support their work on the Fire Local Pension Board, members continued to maintain and develop their knowledge and skills. External training opportunities were limited during this time, due to the effect of the pandemic however, the Board had access to regular LGA monthly bulletins and the website and had utilised the ‘Pension Regulators Public Service toolkit’ to develop their knowledge.  In addition, one member attended the LGA Fire Pension Scheme Annual General Meeting.

Looking forward to 2023/24

The Work Plan of the Board would focus on the principal activities of the Scheme as currently anticipated, which included: i) Continuing to improve pension administration arrangements for the benefit of all members and employers of the Scheme including the continual improvement programme for the quality of data held by the Scheme; ii) Appraising the impact of any revised regulations arising from the resolution to the Sargeant age discrimination and the Matthew’s cases and implementing any required changes to the Scheme; iii) Assessing the impact of and responding to consultations that would have an impact on the Lancashire Firefighters Pension Schemes; iv) Appraising the impact of the implementation of the Pensions Dashboard; and v) Enhancing Board knowledge and skills.

The Plan would be reviewed and amended where appropriate to ensure it addressed any relevant issues which arose.

The Chairman of the Authority commented that issues with pension arrangements had been ongoing for a considerable length of time which was confusing for everyone and understandably frustrating for staff. 

In response to questions raised by CC Woollam, the Director of People and Development provided reassurance that part of the role of the Pension Board was to communicate factual and accurate information with staff however, it was acknowledged that the issues were complicated and sometimes people were looking for different answers.  He confirmed that no one retired with less pension than they had expected.  He also confirmed that regular seminars were held for people approaching retirement. Elements were delivered separately for operational and support staff due to the differing pension schemes and they included presentations from the local pension partnership administrators who outlined options available which did not include investment advice. 

The Clerk advised that together with the Director of People and Development they had met with a senior barrister in London, over three years ago, to seek advice regarding legislation and case law in order to put the Service in the best possible place to ensure that pension entitlement was properly overseen and there was no agreed algorithm that took into account the significant number of variables involved in calculating each firefighter’s pension.  In response to a question from CC Mein, the Clerk advised that it was possible to provide a synopsis of the McCloud / Sargeant judgement outside the meeting and most likely at the next Strategy Group Day.

Resolved: that the report be noted.