Agenda item

The Committee considered a report of the Director of Corporate Resources, the purpose of which was to provide information on any changes relating to the risk management and internal controls of the Pension Fund, as stipulated in the Pension Regulator’s Code of Practice.  The report also provided updates on the information provided to the Local Pension Board on the internal audit arrangements for the Pension Fund, outcomes of audits conducted during 2023/24 and outlined the internal audit plan for 2024/25. A copy of the report marked ‘Agenda Item 8’ is filed with these minutes.

Arising from discussion, the following points were made:

1. East Midlands Shared Service (EMSS) had ended its contract to provide payroll services for Leicestershire County Council schools and academies. Some difficulties had been experienced in getting all necessary data from their new provider, due to the number of new employers it had taken on over a short period. However, the Director provided reassurance that meetings were taking place weekly, and the number of data queries awaited had fallen from approximately 80 cases down to five schools and 19 academies.  Any continuing issues during the next quarter would be reported to the Board and Committee in terms of impact on annual benefit statements.

2. A Member asked, in terms of individuals transferring out of the Fund, what could be done within the regulations to ensure they did not transfer to a fraudulent scheme. It was noted that transfers and controls around this process were looked at every two years to ensure adequate approval processes had been followed. Alongside a tightening of regulations in 2023, the rules had introduced a Red / Amber / Green flag system to inform officers where a further detailed look at certain transfers, particularly overseas, was needed. In addition, any transfer over £100,000 went through a further legal check to establish the security of a scheme.

3. Assurance was being sought from LGPS Central that work would commence on a Type 1 Audit and Assurance Facility (AAF) report and be delivered in August 2024 as planned, especially as the request for a Type 2 AAF report had been rejected, which had been a problem for all internal auditors.

4. In response to a members’ query regarding three deferred audits, it was confirmed that the charge applied was for work completed only, and the figure for 2024 was an estimate based on the number of days work required to complete the plan.

5. A Member questioned whether there was any historical data on payments made to deceased members, and the amount of money lost as a result.  The Director reported that the Pension Section used to rely on the data provided by the two-yearly National Fraud Initiative (NFI) system, which was a large, time-consuming exercise undertaken by the Cabinet Office. However, because this process could take up to two years to reveal any such cases the Fund had enrolled on the six-monthly Mortality Screening Service (MSS), also managed via the Cabinet Office.  This compliments the Pension Sections mortality screening service, which usually results in the Section being informed of deaths within a month of the person’s passing. In response to a request from a Member, the Director undertook to provide further information on the number of cases that had resulted in overpayments, including where amounts had been written off.

RESOLVED:

(a)  That the Risk Management and Internal Controls report be noted.

(b)  That the revised Pension Fund Risk Register attached as Appendix A to the report be approved.

(c)   That the Director of Corporate Resources be requested to provide further information to Members on the number of cases of continued payments to deceased members, and action taken including where amounts had been written off.