As the National Association of Pension Funds' (NAPF) Local Authority Conference 2014 kicked off, the reformed Local Government Pension Scheme (LGPS) marked its 49th day of existence.
LGPS 2014 launched on 1 April, moving the local authority-administered scheme to a career average revalued earnings (CARE) benefits structure.
England and Wales' 89 funds launched the reformed scheme one year ahead of the LGPS in Scotland and Northern Ireland, and 12 months before the Public Service Pensions Act 2013 mandated.
Despite the increased complexity of CARE benefits and the delay of transitional regulations, the scheme successfully launched on time.
Although it is still early days, the general view seems to be "so far, so good".
Gearing up for change
The scheme launched 194 days after LGPS 2014's main regulations were finalised.
However, transitional regulations had only been put in place 22 days before the scheme went live. Funds only received the Government Actuary Department's (GAD) guidance at the end of May - four days before benefits changed.
Wiltshire Pension Fund head of pensions David Anthony told conference delegates that delays to receiving regulations did put pressure on administering authorities.
"Although as a fund we know how the scheme looked and was going to operate, it was the glue that brought the old and new schemes together and the GAD factors that were the important part of the implementation," he said.
Wiltshire began putting resources in place to implement the new scheme as far back as 2011. This ensured that the fund had "the right skills in the right places", with a dedicated communications manager, employer relationship manager and compliance and project management resources.
The team prepared for the worst-case scenario of reaching 1 April 2014 without a working pensions system and only partial regulations, which would have required wholesale manual calculations.
As a result of a detailed implementation plan and management of specific risks as part of the pension committee's risk register, the worst-case scenario was avoided, Anthony said.
Updated software was received from developers in February, although the late release of GAD guidance meant some parts of the software are not operational.
London Pension Fund Authority (LPFA) director of pensions Mike Allen said the administrator is also facing similar issues with its pension systems. As a result, staff training has been provided to ensure they are aware of the workarounds available when parts of the software do not work.
He said: "The key thing as an administrator is, are we getting the benefits paid to the right people, at the right time and to the right amount? We've had no complaints so far."
Communicating the changes to both employers and members formed a large part of the implementation work for funds.
The level of information required from employers is far greater than under the previous regime, and it is the quality and accuracy of that information is essential to the success of the scheme, Allen said.
He explained: "We engaged actively with employers through newsletters and on-site training. The feedback we've received has been pretty positive so far.
"I think employers are becoming increasingly aware that they actually have a role to play in this scheme, it's not just down to the administrators. They rely heavily on what the employers do. The more the employers understand their responsibilities, the better the scheme can run."
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