Police Pension Board
The Police Reform and Social Responsibility Act 2011 transferred the legal responsibility for ensuring the proper administration of police pensions to chief officers as police pension authorities. The Chief Constable has therefore had the responsibility for the administration of the scheme in respect of police officers in your force, with the specific exception that the responsibility for a chief officer’s own pension is the relevant Police and Crime Commissioner (PCC) as pension supervising authority. Reform of the police pension scheme came into effect in April 2015.
The Public Service Pensions Act 2013, the primary legislation under which the new police pension scheme is being developed, places more statutory emphasis on governance than has previously been the case in public service schemes. The police scheme, in common with the firefighter and local government pension schemes, will have statutory arrangements in place at national and local level. The Act prescribes a “Responsible Authority”: the Home Secretary, who is responsible for making scheme regulations. She will do so in consultation with a “Scheme Advisory Board”: the Police Advisory Board for England and Wales is well-established and will perform this role.
Under this new legislation the Chief Constable becomes the “Scheme Manager” with the responsibility to administer the scheme according to scheme regulations. The Act stipulates that the Chief Constable should ensure compliance with scheme regulations, compliance with the requirements of The Pension Regulator and other matters as the regulations may specify. This will include matters such as record-keeping and publishing information. The Act also provides that the Chief Constable must be assisted in these matters by a Pension Board. The legislation does not prescribe the size of the board but does stipulate that there must be equal numbers of employer and scheme member representatives.
Function of the Board
The main function of the board is to:-
- ensure compliance with scheme regulations
- ensure compliance with TPR code of practice; respond to any requests/directions made by TPR
- set the scope and direction of the administration and any new strategic approach
- develop communications link with Scheme Advisory Board to receive advice from it and escalate issues to it
- establish the effectiveness, efficiency and value for money of scheme administration
- scrutinise the level and quality of service; challenge and direct service providers to improve scheme performance; focus on continuous improvement and value for money; identify opportunities to enhance the range and quality of services offered by the scheme
- ensure that members receive correct benefits on time
- develop and manage a risk management framework
- improve pension data quality
- challenge the performance of the service providers; benchmark the scheme administration; identify and promote good practice and address any areas of weakness with the service providers
- oversee the procurement of administration services, making recommendations on the scope of the service, budget, evaluation criteria and signing off preferred provider proposals
- commission additional services from the administrator to meet changing needs of membership and employers
- oversee the development of processes and systems to incorporate any new statutory requirements
- oversee and provide challenge to scheme budget forecasting
- ensure that there is an effective audit strategy is in place for the scheme; approve and monitor audit delivery plans
- monitor complaints / disputes; address issues arising from cases referred to IDRP, Pension Ombudsman etc
- ensure the scheme administrator supports employers to communicate the benefits of the scheme
- ensure the administrator supports members with a range of tools to improve their understanding of their pension benefits
- efficiency – whatever model a force uses for pension administration (local authority, commercial services supplier, in-force) it will wish to keep the arrangements under review and look for efficiencies from continuous improvement. There are likely to be opportunities for increasing collaboration, re-negotiating contracts, business process change, benchmarking, developing and promulgating best practice
- information management – there may be a need for improvements in quality and management of information for both record-keeping and communications with scheme members, particularly pensioner and deferred members i.e. those who have retired or left thee force
A Board may wish to address, or seek advice with the Scheme Advisory Board, the kinds of issues which cause concern. Examples might be ill-health retirement, where perhaps forces might operate varying policies, pensions financing issues, tax where some issues might arise from the interaction of tax rules with the pension scheme, and similarly some issues might arise from the interaction of the pension scheme with pay and conditions regulations and determinations.
Minutes from the last meeting
For more information please email PenGov@kier.co.uk or Kier on 01642 727040