Three out of four administrators running Local Government Pension Schemes are concerned they do not have sufficient staffing and other resources to meet future commitments, according to research by Aon.
This data comes from a recent webinar poll, attended by representatives from 36 different LGPS schemes. Despite significant improvements in funding levels, three quarters or respondents said they did not have sufficient resources at present to carry out day-to-day operations. A further 16 per cent they had adequate staff with the skills needed for now, but were concerned this would be insufficient to meet future challenges.
The LGPS administrators were also asked about the pay and reward packages offered, with 60 per cent stating that pay remains a barrier when it came to ensuring adequate resourcing, either in its own right or when coupled with the wider benefits package.
Aon LGPS talent solutions lead Craig Payne says: “Despite the good news around the LGPS in relation to improved funding levels and reduced employer contributions, the administering authorities are clearly aware of wider pressures. Their internal teams face specialist skills gaps and capacity restraints, while also having to deal with increasing regulatory and reporting demands.
“These people and capacity pressures create real operational risks. Those range from delays in processing member cases and responding to employers, through to challenges in implementing regulatory change and managing complex projects such as McCloud, pensions dashboards and implementing the updated and backdating of survivor’s benefits. Any shortcomings in these areas can result in a worse member experience.”
Aon director of public sector pensions in the UK Laura Caudwell adds: “There are obvious challenges but the LGPS regulatory and pooling changes, along with Local Government Reorganisation, also represent a real opportunity.
“There is the chance to take stock and ensure stronger operational resilience, starting with appointing the LGPS senior officer. But this success can only come through investing in people and processes, ensuring teams have the skills to make their fund ‘fit for the future’ – and making certain that the member experience keeps pace with rising expectations.”