CIPFA Pensions Network

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CIPFA Pension Administration Benchmarking Club

One of the key themes in performance improvement is the need for local authorities both to operate efficiently and to show that they operate efficiently. While no authority willfully wastes money, statistics such as the Audit Commission's Performance Indicators show that some authorities appear to have higher unit costs than others. These may or may not present a fair picture, but an authority cannot prove that it is offering value for money unless it can provide some evidence. Such evidence is also a necessary requirement for Best Value and Comprehensive Performance Assessment (CPA).

Benchmarking helps answer fundamental questions such as:

  • How are we performing?
  • Are we performing better year on year?
  • How does our performance compare with our peer organisations?
  • Can we learn anything from other organisations?

Pension authorities already have to measure and report their cost of administering the LGPS on a standard basis. The club sticks to this established definition, and the report compares the cost per member in total, and by staff cost, IT and so on. It also highlights specific items such as the payroll cost per retired member.

Secondly, the report compares members’ workloads in terms of the composition of the membership (active, deferred or retired), the numbers of joiners and leavers, and the number of estimates and actual calculations of different types (e.g. transfers in and out, AVCs, SIB reviews).

Pension’s administration is the one financial service where an essentially similar function is provided in the private sector, and where surveys of private sector costs are publicly available. Therefore, we are able to supplement comparisons between members with reliable private sector comparisons.

Steve Straw Finance Benchmarking, tel 0208 667 8181

http://www.ipfbenchmarking.net/finance/pensions

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