LGPS administrators concerned about McCloud resourcing

Local Government Pension Scheme (LGPS) administrators see addressing McCloud as their biggest worry from a resourcing perspective, according to a poll.

During a session on administration at the Pensions and Lifetime Savings Association (PLSA) Local Authority Conference, 54 per cent of attendees cited McCloud as their biggest concern.

Other options included in the poll were GMPs, the New Fair Deal, the Pension Schemes Act and the Good Governance Review, with 44 per cent stating that they, including McCloud, were all “equally concerning”.

The remaining 2 per cent voted GMPs to be the biggest worry from a resourcing perspective.

“I certainly expected McCloud to be the most concerning area for administrators because it is quite wide-ranging and it involves retrospective legislation, which I think most administrators would agree is probably one of the greatest challenges,” said Wiltshire Pension Fund head of pensions administration and relations, Andy Cunningham.

“It was interesting to see a reasonable number of people to mark them all equally concerning.”

Pensions Administration Standards Association Accreditation Committee chair, Lorraine Harper, added that she was “not at all surprised” that McCloud was voted as the greatest concern.

“As any administrator knows, any kind of change, particularly legislative or regulator, that requires gathering additional data is going to be quite a headache and resource intensive,” she stated.

“We’ve got dashboards on the horizon too; that’s going to carry data issues, so administrators have quite a few headaches to deal with all at once.

In a second poll, 68 per cent of attendees revealed that they would be managing McCloud fully in-house, compared to 28 per cent bringing in some external support and 4 per cent outsourcing it.

Nearly all (85 per cent) respondents voted the gap in employer records to be the greatest data challenges, while 11 per cent said it was a change of payroll provider and 4 per cent believed it was system reporting limitations.

“It is important to plan ahead,” Harper continued. “I know administrators are waiting for a lot of detail but there are things they could be doing.

“You have got a lot of employers that might struggle to find the data, so it’s about raising their awareness very early on so that they can go back and think about what their issues are going to be. It is about providing guidance so they can plan their own resources.

“The McCloud issues are going to be centred on data. Once you have that, calculation issues are probably less of a headache, especially if you have automation in place.”

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