Meeting documents
Pension Fund Committee (DCC)
Monday 30 April 2007
Meeting: Pension Fund Committee (County Hall, Durham - Committee Room 2 - 30/04/2007 10:00:00 AM)
Item: A6 Pensions Administration Benchmarking Exercise
Agenda Item No. 6
| Pension Fund Committee 30 April 2007 Pensions Administration Benchmarking Exercise |  |
| Report of Stuart Crowe, County Treasurer |
Purpose of the Report
1 The purpose of the report is to inform Members of the outcome of the recent pensions administration benchmarking exercise in which the County Council took part.
Background
2 For several years now Durham County Council has participated in an annual pension administration benchmarking exercise. This involves comparing the costs and features of pensions administration performed by Durham County Council with those at other participating local authorities who also administer the Local Government Pension Scheme.
3 In 2006 fifty-five different administering authorities participated in the benchmarking exercise, these authorities ranged in total membership size from 7,600 to 232,800 (Durham had 40,600 at the time the exercise was carried out), and the exercise included counties, unitary authorities (London, metropolitan, Welsh and other) and Scottish authorities.
The benchmarking report
4 The report produced by the benchmarking exercise covers a range of areas including cost measures, workload measures, staff related measures, industry standard performance indicators and comparison with the private sector. A full copy of the report is available on request, a summary of the main measures reported on is included in the following table:
| Durham County Council | Benchmarking group average |
| Cost Measures | | |
| Staff costs (excluding payroll) | £10.16 | £9.78 |
| Payroll costs (including staff) | £8.43 | £4.06 |
| Direct costs | £3.30 | £3.35 |
| Overheads | £7.17 | £5.34 |
| Income | £0.00 | £0.27 |
| Total cost per member | £29.06 | £22.80 |
| Workload Measures | | |
| Percentage of total membership active members | 46% | 46% |
| Percentage of total membership deferred | 17% | 21% |
| Percentage of total membership pensioners | 34% | 27% |
| Percentage of total membership ‘frozen refunds’ | 2% | 4% |
| Percentage of total membership undecided leavers | 1% | 2% |
| Retirement estimates per 1000 members | 60 | 50 |
| Retirement calculations per 1000 members | 35 | 27 |
| Percentage of membership paying AVCs | 5.4% | 3.7% |
| Percentage of membership buying added years | 0.5% | 1.3% |
| Staff related measures | | |
| Percentage of staff paid over £35K | 5% | 9% |
| Percentage of staff paid under £15K | 32% | 19% |
| Sickness absence (days lost per employee) | 6.9 | 6.9 |
| Industry standard performance indicators | | |
| Achieving target for transfers-in quote | 91.8% | 77.5% |
| Achieving target for transfer-out quote | 94.2% | 80.1% |
| Achieving target for retirement estimate | 83.7% | 91.2% |
| Achieving target for actual retirement letter | 92.5% | 88.8% |
| Achieving target for notifying deferred benefits | 88.8% | 74.8% |
Comparison with private sector
| Admin cost per member (excluding payroll costs): Private sector (in-house) | £42.55 | | | |
| Private sector (outsourced) | £32.61 | | | |
| Durham County Council | £20.63 | | | |
6 Members will note from the cost measures summary that Durham County Council’s overall cost per member of £29.06 exceeds the group average of £22.80. Staff costs are only marginally higher than for the group average.
7 The latest benchmarking report includes information on industry standard performance indicators - recording how many of each particular transaction were processed within a specific timescale. Durham County Council performed at or above average on all except one of these indicators. The December meeting discussed ways the benchmarking report could in future focus on measures of quality as well as cost and quantity, and it was agreed that the 2007 exercise should aim to include more quality-related measurement.
8 Durham County Council will be participating in the 2007 CIPFA pension administration benchmarking exercise, with preliminary results expected in October 2007.
Recommendation
9 Members are asked to note this report.
| Contact: Nick Orton Tel: 0191 383 4429 |
24th April 2007
p/reports/no01-07
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