1. Local Government Pension Scheme Year End Process 2010/2011

2. Local Government Pension Scheme This years important Date The deadline for submitting your Year End Return is 15 April 2011. If your return is not received until after this date your employees may not receive an Annual Benefit Illustration as their records may not be accurate.

3. Local Government Pension Scheme The Year End Return Excel Spreadsheet – E-mailed to your nominated contact Five separate elements:- –Header/checklist page –Pen4A –Pen4B –Pen4C –New start form

4. Local Government Pension Scheme Header/Checklist page Complete your employer contact information – select your employer name from the drop down menu Complete the checklist part of this page after filling in the other parts of the spreadsheet – warnings will be shown if an area needs checking.

5. Local Government Pension Scheme Pen4A The main part of the return List every employee who has paid pension contributions during 2010/2011 Basic scheme contributions and additional contributions need to be shown in the relevant column on the spreadsheet as monetary amounts Remember to show any change in contribution rate during the year (within the same line on the spreadsheet) More than one contract – separate lines for each

6. Local Government Pension Scheme Pen4B This form is used by the Investments Section Provides a summary of all contributions paid over the year – employee and employer The format is similar to the Pen4/1 which should be completed by yourselves each month The total employee contributions stated on this form should equal those quoted on the Pen4A

7. Local Government Pension Scheme Pen4C This form details the number of hours worked over the year by any employees who have no fixed contractual hours Also details the number of weeks these employees are paid for Enables us to calculate the average number of hours worked by these employees over the year

8. Local Government Pension Scheme New start form Do you have any employees listed on the Pen4A who you havent informed the pensions section about? If this is the case please complete this spreadsheet to enable us to create a pension record for the employee

9. Local Government Pension Scheme Other tips for completing the forms……… You will notice small red triangles at the top of some columns – by placing your cursor over these, additional notes will be displayed and prompts regarding the correct format will be shown All of the sheets need to be completed – the only exception is the New Start form if there were no joiners Complete the checklist on the Header Page last – it will show the total contributions from the Pen4A and Pen4B and will highlight any areas that need further work

10. Local Government Pension Scheme Before sending your return to pensions…….. Make sure the totals on the Pen4A and Pen4B match Check the total of all the Pen4/1s sent during the year match the totals on the Pen4A and Pen4B – any differences will be queried unless an explanation is provided Ensure the return is sent back to pensions from your nominated E-mail address – it should not come directly from your payroll provider Please ensure the return is sent to:-pensionsystems@kent.gov.uk

11. Local Government Pension Scheme What happens when we receive your return We check……. That all the forms have been completed using the correct format That the totals balance That payments have been sent to the investments section throughout the year We will send an e-mail to you confirming that your return has been verified by the Pensions Section. Once these checks have been made the information on the Pen4A is downloaded onto each members pension record – this process is called Contribution Posting

12. Local Government Pension Scheme How is the information downloaded Using the National Insurance Number and the Payroll Number provided on the Pen4A the system identifies a match on the pensions database. Where a match is identified the basic contributions, additional contributions and contribution rate are posted to the members record. Remember it is vitally important that the National Insurance number and Payroll Number are quoted accurately otherwise the details will reject

13. Local Government Pension Scheme What happens if a matching record cannot be found? A report is created showing all rejections Reasons for a rejection are..… Different National Insurance Number Different Payroll Number No record for the member Any rejections will be referred back to yourselves as the employer via an E-mail Any rejections will cause a delay in the processing of your year end return.

14. Local Government Pension Scheme What happens once the year end return is processed? Each record is updated with a pensionable pay figure calculated from the contributions posted. This process is referred to as Re-Org (re-organisation of pensionable pay) The pensionable pay figure is also used to generate an Annual Benefit Illustration

15. Local Government Pension Scheme How Re-Org works Takes into account several pieces of information:- Contributions paid in 2010/2011 Contribution rate or rates paid over the year Number of hours worked and any changes during the year Any breaks in service during 2010/2011 From this information a pensionable pay figure as at 31 March 2011 is calculated

16. Local Government Pension Scheme Some example calculations….. For a whole time employee:- total contributions x contribution rate = pensionable pay £1000.00 (conts) x 6.5% = £15384.61 (pensionable pay) For a part time employee:- total contributions x contribution rate = p/t pensionable pay £500.00 (conts) x 6.5% = £7692.30 (p/t pensionable pay) £7692.30 x 37 ÷ 18.5 hrs = £15384.61 (w/t equivalent pen pay)

17. Local Government Pension Scheme What happens once the pensionable pay figure has been calculated? The pensionable pay figure as at 31 March 2011 is compared with the one calculated for 31 March 2010 or start pay if later The comparison is based on parameters set by the pension section in line with guidance from the Scheme Actuary If the pensionable pay figure falls outside of these parameters an error report is generated.

18. Local Government Pension Scheme The Error Reports…. These reports will be sent to you in an excel format There are four error reports:- A – pensionable pay is less than start pay B – pensionable pay is less than previous year C – pensionable pay has increased by more than a set % D – no contributions have been received for the year

19. Local Government Pension Scheme The A Report Where the pay as at 31 March 2011 is less than the start pay This report is only generated for those individuals who started during 2010/2011 Possible reasons for rejection:- Incorrect start pay Incorrect start date Incorrect starting hours Hours have changed since joining Rounding – where the member has joined at the end of the financial year

20. Local Government Pension Scheme The B Report Where the pensionable pay as at 31 March 2011 is less than the pensionable pay as at 31 March 2010 Possible reasons for rejection:- Individual has left the scheme and no notification has been received Incorrect hours or a change in hours during the year Maternity Leave Career Break Unpaid Leave Period of Sickness during the year Previous years pay was higher due to a merit award Arrears of Contributions paid in the previous year

21. Local Government Pension Scheme The C Report Where the Pensionable Pay is higher than the previous year Possible reasons for rejection:- Incorrect hours/Change in hours Additional payments or Merit award Promotion Acting up pay Contributions being incorrectly deducted on overtime

22. Local Government Pension Scheme The D Report Where no contributions have been received for an individual Possible reasons for rejection:- Employee with no fixed hours who has not worked Joined the scheme at the end of the financial year and was first paid in April Returning Officer – no election duties Career Break Left the scheme and no leaver package has been sent to Pensions

23. Local Government Pension Scheme How to avoid queries!!! Remember to tell pensions of any changes to scheme members contracts. Make sure the correct contributions are being taken. Make sure the employee is in the correct scheme (especially in education establishments)

24. Local Government Pension Scheme Why do we do the Year End Process? It is a statutory requirement Ensures scheme members records are accurate Actuarial reasons – data is required for various calculations such as FRS17 Annual Benefit Illustrations

25. Local Government Pension Scheme Important Reminders Year end forms started being despatched from 7 February 2011 Deadline for submitting returns is 15 April 2011 Make sure the figures balance Make sure any changes to scheme members contracts have been sent to Pensions Make sure we have been informed of all new starters E-mail address for completed returns is: pensionsystems@kent.gov.uk

26. Local Government Pension Scheme Contact information Claire Silvester – 01622 694680 Scheme Events & Member Communications Consultant Karen Brooker – 01622 223513 Communications & Support Officer Investments Team – 01622 694625

27. Local Government Pension Scheme Employer Liaison Contacts Joyce Chalk - 01622 694734 Employer Liaison Consultant Julie Lock - 01622 694765 Communication & Support Officer Jules Browne - 01622 694712 Communication & Support Officer Nick Lockyer-Fincken - 01622 223579 Communication & Support Officer