A report was submitted to update the Board on the outcome of two separate administration benchmarking exercises undertaken for 2018/19.

Members were informed that the CIPFA benchmarking exercise was specifically for LGPS funds and SYPA had been a participant for many years but this year SYPA and a number of other large LGPS funds also took part in a benchmarking exercise run by CEM, an independent provider with wider involvement in supporting the pensions world outside of the LGPS.

It was noted that the CIPFA Benchmarking Club was voluntary and that in 2019 only 27 funds out of approximately 90 funds chose to participate.  Although this would limit the conclusions to be drawn from a national perspective, the club remains the principal source of comparative cost data available for LGPS funds.

It was hoped that one of the possible outcomes of the Good Governance Review would be that funds would be encouraged or mandated to participate in an appropriate benchmarking exercise.

The report showed that the total cost per scheme member for 2019 was £18.71 compared with an average of £17.69 for the comparator group.  For comparison purposes, the total cost per scheme member in 2018 was £18.67.

It was difficult to draw conclusions from the data provided by CIPFA given the limited scale of participation but further analysis contained within the report suggested that SYPA invested less in Membership Engagement and Employer Engagement in 2018/19 than other participating funds.  This issue had now been addressed, at least in part, by the recent administration restructure and the creation of specific engagement posts.

The Board considered the CEM Benchmarking Analysis which compared SYPA’s governance and pensions administration costs and member service  with a peer group of 12 other pension schemes which had membership of between 85,877 and 571,449.

In summary, the results of the analysis were:

Costs

·       Total costs were £4.72 per member below the peer average.

·       Governance costs were £1.67 per member lower than the peer average.

·       BAU administration costs were £4.34 per member lower than the peer average.

Member Service

·       SYPA scored well for service in the areas of:

o   Telephone – pre-connection

o   Social media

o   Meeting members one-to-one

o   Estimates

·       SYPA scored below their peers in the areas of:

o   Telephone outcomes

o   Setting up new pensions

Cost effectiveness

·       SYPA were positioned as high member service, low cost on the CEM administration cost effectiveness graph.

Employer Service

·       SYPA scored well for its website.

J Bailey acknowledged the need to measure more aspects of service, especially with regard to telephone outcomes; how employers and how SYPA should report back to employers were performing was also an area to look at.

In all the report was generally positive and had brought out further areas to develop.  It was hoped to see improvements in service areas, while recognising it was important not to concentrate too much on cost.

RESOLVED – That the Board:

(i)     Note the outcome of the 2018/19 CIPFA Benchmarking exercise.

(ii)     Note the potential areas for service development highlighted by the CEM Benchmarking exercise.