Agenda item

This paper sets out a summary of the performance of the Local Pension Partnership Administration in providing a pension administration service to the Hammersmith & Fulham Fund.

Eleanor Dennis introduced the report setting out the key performance indicators in respect of the pension administration service provided by Local Pension Partnership Administration (LPPA) on key cases such as estimates, transfers, deaths and retirements for the period October to December 2022.

During this period LPPA processed 958 cases for the fund. However, in line with the challenges that were stated by the LPPA strategic director , performance for Quarter Three had been disappointing and continued to be below the agreed targets, in particular with deaths and retirements were 34 and 33 cases had fallen outside of the SLA. This was mainly down to challenges in the way that the death cases were processed whereby the clock started ticking before the case was actually being looked at by an administrator, and also whereby they were awaiting information coming through from a beneficiary, such as a probate or documents such as proof of residence.

Councillor Adam Peter Lang asked whether the Committee could provide any further support to Eleanor Dennis’s team to help improve the disappointing performance and if targets could be set for the next quarter.

Eleanor Dennis thanked the offer of help and reiterated that it was disappointing and frustrating to work with LPPA because, despite being a proactive Administrator, they still needed to improve  and meet their core service delivery. Greg Smith (Director of Strategy, LPPA) stressed that they were absolutely focused on getting the service right and were actually going to scale back some of their improvements and ambitions for the future to focus on the core service.

In terms of support she would be willing to bring LPPA back to the Committee to discuss poor performance or to challenge them in a different way. Regarding targets, the Committee could think about a minimum standard by which if LPPA’s performance fell below that the Committee could decide on appropriate action and rather than waiting for their quarterly report, they could request an interim update on  performance.

The Chair replied that he supported both points, an interim report from LPPA as well as holding them into account to achieve the targets they already have. He reinforced that the Committee would support Eleanor Dennis in any way to hold them into account. They could send them a letter on behalf of the Committee listing the particular concerns on performance deficit.

Councillor Adrian Pascu-Tulbure asked if there were other levers to be used to ensure they performed well and noted that in the private sector this poor performance would not be accepted.

Eleanor Dennis replied that when Greg Smith came to this Committee he had said that he would expect to see an improvement on Quarter Four. She challenged him on that and asked for a realistic and achievable target. He later said it would be Quarter One, therefore she thought that this could be a good trigger point. By this time they would have been with LBHF for just over a year and would have had the opportunity to improve.

Eleanor Dennis added that in terms of actions, the suggestion of a formal letter from the Committee to LPPA, for the attention of the Managing Director, to let them know their dissatisfaction with the service provided would be perfectly reasonable. She had recently been told that LBHF work was being prioritised, but that had not transcended in performance yet. There were issues that needed addressing and a formal letter from the Committee with a formal expectation of that timeline would be helpful.

She added that the private sector was a very different environment and they managed to deliver very well. In a private sector you would not get consistent average wait times of nine or ten minutes.

Peter Parkin stated that Unison’ Members main concerns were the delays in receiving their entitled pensions, which was very stressful for Members and their families, especially in case of death.

Eleanor Dennis agreed that Members expected their retirement to be a smooth process, especially after having worked for a considerable amount of time. Therefore, there were certainly some actions that could be looked at, such as communicating timelines more clearly.

Councillor Florian Chevoppe-Verdier asked at what point should the Committee look at an alternative pension administrator and what the availability was on the market.

Eleanor Dennis replied that LPPA should be allowed a certain amount of time to improve due to the complexity in dealing with administration. In addition, no company was 100% perfect. It was a big exercise to change administrator as it costed a large sum of money, and it took a long time and expertise. However, LPPA had disappointed on several fronts, and this was not to be expected as a new client.

The availability of moving to a new administrator could be considered, and if the Committee decided to send them a formal letter, they could be given the opportunity to perform in Quarter Four and Quarter One. And if necessary, making a decision how to proceed going forward, even if only testing the market availability and price. The danger was to go through the selection process, choose another administrator and have other similar performance issues as well as the time and cost to go through such an exercise.

Michael Adam asked how the performance that LBHF was receiving from LPPA compared to their other clients. As a background to the issue he mentioned the poor performance of the two previous Administrators, Capita and Surrey. Therefore there had been three consecutive bad experiences, but in his opinion it was not a public sector versus a private sector problem, but perhaps the bad performance was the result of historic issues.

Iain Cassidy added that the move from Surrey to LPPA took years and astronomical amounts of work and money. The main problem was that the data that Surrey had was a legacy from Capita. Therefore, the data problems were a decade old. He believed that the move from one organisation to another was really cumbersome.

It was suggested that the Committee letter to LPPA could include a deadline by which the Committee would expect better performance. And if that was not achieved the Committee could request a discount on the fees.

The Chair, noting that the next Committee meeting would not be until June, asked Eleanor Dennis if a  letter to LPPA could be sent next month with some suggested text around a fee challenge.

Eleanor Dennis explained that a fee challenge would not be possible due to an agreement whereby the costs were shared. The cost of running the service was for all of their clients and LBHF paid a very small percentage based on the size of membership. Within that agreement there was no option for action in case of poor performance, so withholding fees for service would not be possible. However, she agreed the Committee could   draft formal letter  raising the concerns at this meeting.

ACTION: Committee members

RESOLVED

The Committee considered and noted the contents of this report.