As the first Local Government Pension Scheme fund, and indeed the first public sector scheme, to achieve accreditation from the Pensions Administration Standards Association, Lothian has raised its profile in the wider pensions field and put us in a good position to deal with challenges.
We are proud to be the first UK administering authority to achieve it, particularly given the financial pressures facing local government and the wider public sector. Accreditation has demonstrated our commitment to delivering an excellent service to our members and to continuous improvement. Our staff are delighted that their skills and knowledge have been recognised.
What is it?
PASA accreditation is the gold standard for high-quality providers of pension administration, whether they are an in-house team or third-party provider. It is awarded to those organisations that have undergone the stringent assessment process and shown evidence their practice operates in line with the PASA standards.
The Pensions Regulator and the Department of Work and Pensions have both identified that good administration can be demonstrated by independent accreditation.
PASA recognises the negative impact that poor administration can have on scheme members and its accreditation acts as a reassurance for trustees that their pension scheme’s provider demonstrates a commitment to high-quality service and operates in line with a recognised and credible framework.
Aside from poorer service for members and additional costs in areas such as error correction and compensation claims from members, poor record-keeping could potentially necessitate more conservative actuarial assumptions leading to higher contributions from fund employers. Lothian, therefore, places a high importance on the quality of its pension administration data.
With the expansion of the Pensions Regulator’s role to include standards of governance and administration for LGPS funds from April 2015, we decided to apply for accreditation with PASA. We felt PASA would ensure that our level of service was not just in line with TPR’s codes of practicevbut also with best practice in pension administration services across the private sector, because PASA’s standards are specific and relevant to the pensions industry as well as being the only accreditation that is member-focused.
The fund was already well positioned in respect of a number of customer care elements within the PASA standard, because of our Customer Service Excellence award. We set ourselves a one-year timescale, starting the process in April 2016 and finishing it in March 2017.
We started off by carrying out a gap analysis between the PASA standards and our own practices to identify where we were already meeting the standards and any instances where we were not aligned. We then put together a project team who would work to deliver the necessary amendments ahead of making the formal application for assessment in December 2016. A desk-based and on-site assessment was carried out over a period of two months, culminating in the three day on-site assessment.
For the fund, the process gave assurance that we were strong in most aspects of service delivery but identified scope for improvement in certain areas. It was extremely worthwhile in focusing us on why we were doing things the way we did, while enhancing our overall administration practice, particularly our procedure and training manuals.
The view from PASA
Thanks to organisations such as TPR championing high-quality administration, the industry is becoming increasingly aware of the immeasurable difference it makes to scheme members. As a consequence, people are recognising the value of appointing an administrator with an independent accreditation and we have seen this through the growing momentum of the PASA accreditation.
Lothian is the first local authority pension fund to achieve the accreditation and the third organisation this year alone, and we have seen enquires about the process from interested parties spike in recent months.
By successfully completing the accreditation process, Lothian has demonstrated that it is delivering a truly outstanding service and as such, help set an industry benchmark that others can strive for. With their continued support and that of our members, we will continue to improve the quality of administration across the board and see that high standards are viewed as the norm.