7. Objectives and developments of the Fund

Performance management and developments of the Fund 

Effective performance management and ongoing developments within the Fund are critical to ensuring high-quality service delivery and long-term sustainability. The fund’s capacity to meet its Service Level Agreement objectives is contingent upon employers fulfilling their obligations in a timely and accurate manner.

Employer Service Level Agreement (SLA)

SLAs for scheme employers have been set by the fund to ensure both parties meet their regulatory requirements.

Employers participating in the LGPS agree to:

  • ensure accurate and timely submission of member data
  • deduct and remit employee and employer contributions within the statutory deadlines
  • provide a leaver form for all retirements, early retirements, and ill-health retirements and deaths in service
  • submit annual payroll and pension data as required for valuations and pension statements
  • inform members about their pension rights and provide LGPS updates where necessary

With regards to performance standards & reporting, employers must:

  • maintain high standards of accuracy in employee records and payroll reporting
  • ensure all submissions meet statutory deadlines, with delays subject to review and potential penalties
  • respond to queries from the Fund within 5 working days
  • ensure any new payroll provider submits data via the i-Connect portal within 3 months of the contract starting

New Employers must ensure that data is submitted via the i-Connect portal within 3 months of joining the scheme.

LGPS new starter process

Employers must:

  • provide final pensionable pay details for accurate benefit calculations
  • complete an online leaver form (age 55 and over members) via the APF employer website within 15 days of the date of leaving, employers may submit the form up to 2 months prior to the member’s date of leaving, on the condition that they are confident no amendments will be necessary. If amendments are later identified, the fund may charge the employer for any disproportionate work required to correct the data.
  • detail the reason for leaving (resignation, retirement, ill health, redundancy) on each leaver form
  • submit required leaver information (under the age of 55) via the i-Connect data submission system
  • process refunds for any member opting out within 3 months of joining

LGPS data queries

Employers must:

  • submit accurate employee pension data and ensure timely updates for changes in salary, hours, and contract status
  • respond to LGPS data validation requests within 5 working days, to enable the Fund to meet any regulatory requirements
  • rectify discrepancies found in payroll or pension records promptly and within 5 working days
  • ensure secure data transmission to comply with data protection regulations

Year End

i-Connect and Online Return employers.

  • any queries received with the March data must be answered promptly and within 5 working days
  • APF will issue a Data Confirmation spreadsheet upon completion of year end data checks via the portal. A response is required within 10 working days.
  • any additional queries must be responded to by the stated Year End completion deadline
  • a Year End Data Confirmation Declaration must be submitted as soon as all queries have been responded to and by the stated Year End completion deadline at the latest

Failure to meet any deadline could incur a fine.

Using i-Connect

i-Connect streamlines the transfer of employee data from employer payroll systems to the fund. It reduces manual data entry, simplifies year-end reconciliation, and ensures accurate member data. By aligning with statutory requirements, it helps avoid penalties from The Pensions Regulator for breaching legislative time limits and other requirements.

As the Fund’s main source of member data, the information employers submit via i-Connect allows us to establish benchmarks, monitor employer performance and track key metrics like submission accuracy, processing speed, and compliance rates.

Employers must submit accurate, timely data and ensure third-party payroll provider/systems integrate properly with i-Connect and submit data on time on their behalf. This ensures the Fund has all relevant data to calculate member benefits.

Employers must also adopt new features as they become available.

Employers must:

  • ensure monthly i-Connect data submissions are uploaded by 22nd of the following month
  • reply to queries before their next monthly file/return is uploaded
  • supply no manual data outside of the i-Connect return
  • consistently provide monthly data via i-Connect without gaps

Annex 1: Employer tasks and the deadlines that must be met

Employer performance

The goal of the Pensions Administration Strategy is to improve the administrative processes of the Fund. Both the Fund and each employer must contribute to achieving this goal. However, in cases of persistent poor performance, Regulation 70 of The Local Government Pension Scheme Regulations 2013 provides pension funds with the ability to recover any additional administrative costs that have been incurred, because of a scheme employer’s underperformance.

The Fund aims to give a poorly performing employer the opportunity to improve its performance before imposing additional charges. However, if the Fund believes the employer has not improved, it will issue a penalty fine (after consulting the employer). This fine will cover the additional costs incurred by the Fund due to the employer's poor performance, along with any disproportionate work conducted by Fund officers.

The employer has the right to appeal against any penalty fine and should submit any relevant evidence in writing within 30 days of the fine, to support any appeal.

A schedule of penalty fines is detailed in Annex 2 and 3. These fines must be paid within 30 days from the date of issue.

Failure to meet the deadline will result in interest being added at base rate plus 1%, as per LGPS 13 regulations.

Penalty fines

Most employers accurately submit data and pay pension contributions on time. However, when data or contributions are submitted late or inaccurately, the resulting costs to the Fund are unfairly distributed among all employers' contributions.

To enhance efficiency, lower costs, and more accurately allocate the expenses of non-compliance, extra charges will be applied see Annex 2 and 3.

Annex 2: Penalty fines for Fund employers

Penalty fines associated with i-Connect submissions

The submission of monthly data via i-Connect is mandatory for all employers. The following penalty charges (annex 3) may apply if:

  • Any new employer is not live within first 3 months of admission to the scheme
  • Once live a monthly submission is late

Annex 3: Penalty fines associated with i-Connect submissions, depending on employer size

Any remedial work required because of an employer’s i-Connect data submission being incorrect or corrupting the data integrity of the administration data base, will be treated in line with the disproportionate work charge. Any subsequent third-party charges to rectify system data will also be passed on to the employer.

If poor performance persists and affects the Fund's ability to fulfil statutory functions, or if the employer fails to take corrective measures, the Fund reserves the right to report the employer to The Pension Regulator. Any fine from the regulator to the Fund, as a direct result of an employer performance issue will be passed onto the employer.

Underperformance penalty fines will be applied at the discretion of the Head of Avon Pension Fund and will be calculated based on a combination of the standard tariff of charges plus time spent at the disproportionate hourly rate.

If an employer fails to pay any amount due to the Fund (other than monthly contributions) within 30 days, interest for overdue payment will be charged accordingly. This includes charges and recharges levied for cost recovery.

When a penalty fine is imposed the Fund will send a written notice to the lead officer of the scheme employer, which includes:

  1. The reasons for the Fund’s opinion.
  2. The amount the Fund has determined the scheme employer should pay for those costs, along with the basis for calculating the specified amount.

The Fund’s ability to meet its performance objectives is contingent upon employer compliance with statutory obligations; instances of non-compliance are formally reported to the Pension Board and Committee, reflected in public disclosures.

Target Service Level Agreement (SLA)

The Fund has a statutory obligation to establish performance standards and disclose both targets, and the results achieved. This aims to monitor ongoing improvements in the administration service to members. Annex 4 outlines the target service level agreements and proposed targets that will be monitored

In line with regulatory guidance and sector benchmarking, the Fund has aligned targets to meet statutory deadlines, ensure timely benefit payments, and support ongoing data cleansing and scheme updates.

The Fund has set the following Service Level Agreement’s (SLAs), which outline service standards and response times members can expect from us.
Performance will be monitored and reported to the Pension Board and Committee on a quarterly basis.

Annex 4: The Fund’s Target Service Levels for service to members