1. Pension Board Induction TPS Governance – role of the Board

2. TPS The Background
The Independent Public Services Pensions Commission final report March 2011 set out the recommendations for the reform of public service pension schemes
Recommendation 17 set out the case for more independent oversight and governance to keep the government, taxpayers and scheme members better informed
Every public service pension scheme (and individual LGPS Fund) should have a properly constituted, trained and competent Pension Board, with member nominees, responsible for meeting good standards of governance including effective and efficient administration
The report also suggested a larger role for The Pensions Regulator in developing a framework for independent oversight of the governance, administration and data transparency of public service schemes
The reforms to the public sector pension schemes have their basis in Lord Hutton’s report. One of the recommendations was to put in place a Pension Board with responsibility for effective and efficient administration of the scheme, bringing a clear separation of duties between those responsible for the governance of public schemes and those responsible for delivering the benefits to scheme members.
The report also set out a recommendation for a pension policy group, to consider major changes to scheme rules. This resulted in the Pension Advisory Boards. More on that anon.

3. TPS 2015 - The Legislation Public Service Pensions Act 2013
Sets out requirement for a Pension Board and the information that must be published about its role
The Teachers’ Pension Scheme Regulations (Laid March 2014)
Amendments To the TPS Regulations (Laid November 2014)
Disclosure and Record-Keeping Regulations
PSPA requires pension board to have equal numbers of employer and member representatives
Minimum information required is who the board members are and whom they represent and what the board is responsible for
TPS Regs 2014 set out that there must be

4. TPS 2015 – How was the model developed?
Developed requirements
Legislation, TPR Code of Practice No. 14 (Draft)
Reviewed other “public” schemes operating with a board of trustees
Looked at other schemes such as the Civil Service, the BBC and large private sector companies to get a feel for the size and make-up of the board
Comparison of proposals for Pension Boards across public schemes
Updated unions and employer groups on proposals
Research across existing public and private sector boards confirmed that the average number of board members is 10 and that typically the number of Board members ranges from 9 – 12. It is important to remember that any Board member must represent the wider interest of the scheme, rather than their own factional interest and therefore it is not immediately apparent that increasing the number of employer and member representative will necessarily ensure that a more rounded perspective is presented at Board meetings. The size of Board has to balance the need for there to be effective representation against the need for the Board to conduct its business efficiently. On balance the Department feels that a Board of 12 strikes that balance
Looked at Civil Service, BBC, BT, National Grid, USS, NHS BSA, M&S and Asda.
Participated in HMT led governance workshops for public schemes, sharing best practice

5. TPS Administration – governance
Scheme Manager (i.e. Secretary of State) is legally responsible for governance
In practice the function is delegated to the Department’s Accounting Officer, responsible for maintaining
a system of internal controls; and
management of risk
that is subject to external scrutiny from NAO, GAD, OBR, and HMT
At the working level there are a number of meetings through which the scheme is governed and the contract with Capita is managed.

6. The Department’s Pensions Team
Head of Pensions Team
Richard Symms
TP Contract Management Team
Sue Crane
Karen Peacock
TP Reform Team
Jeff Rogerson
Michelle Thompson-Smith
Pensions Policy Team
John Brown Andrew Leach
Karen Oxley
Jack Doherty (P/T)
TP Finance Team
Richard Lees
vacant post
TPSPB Board Secretariat
Karen Cammack

7. TPS Administration – day to day governance
Service Delivery Review – monthly
Manage delivery of strategic direction, monitors delivery of pension administration against SLA, addresses risks and issues. Escalation point for finance and audit.
Teachers’ Pensions Finance Meeting – monthly
Reviews delivery of financial services against defined and agreed standards, forward look to next reporting period
TPS Risk Committee – monthly
Reviews current Strategic and Service Delivery risks, identifies emerging risks in period, and assigns ownership and management of mitigating actions
Service Delivery Review – Chaired by Sue Crane
managing and monitoring delivery of the strategic direction on a “day-to-day” basis
monitoring core pension administration delivery
reviewing performance against service levels and addressing delivery risks and issues
discussing any escalation from the finance and audit meetings
Teachers’ Pensions Finance Meeting – Chaired by Richard Lees
responsibility for reviewing delivery of Financial Services, ensuring they are to defined and agreed standards
provide a forward look to the next reporting period.  
Maintains a watching brief on Fraud Prevention, Debt Management and Financial Reconciliations.
TPS Risk Committee – Chaired by Pete Henderson TPS (Capita) Governance Manager
Reviews current Strategic and Service Delivery risks
identifies emerging risks in period, and
assigns ownership and management of mitigating actions

8. TPS Administration – day to day governance
Quarterly Strategy Reviews
Determining the strategic direction of the administration services, and reviewing delivery progress
Executive Review – bi-annually
A vehicle for escalating and resolving issues.
Keep in Touch (KiT) Meetings
The purpose of these meetings are to share information and updates and act as a decision making process outside of the formal board, risk and finance meetings
TPS Reform Implementation Project Board
Meetings are held to oversee specific initiatives or objectives, for example the Reform project
Quarterly Strategy Reviews – Chaired by Richard Symms
Determining the strategic direction of the administration services, and reviewing delivery progress
Focus on:
Departmental/Government pension priorities
achievement of contractual outcomes
innovations and improvements that deliver improved customer service and/or service efficiencies
discussion of any escalations from Service Delivery Review
Executive Review – between Stephen Baker and a Capita Executive Director
Where appropriate, issues are escalated to the Department’s Boards
Keep in Touch (KiT) Meetings
KiTs often cover a variety to topics, such as: governance, finance and general management of the scheme.
Project / Initiative specific meetings
The focus of these meetings will, generally, encapsulate policy, administration and communication requirements, with a key objective to minimise any impact on business as usual administration services and financial management.

9. TPS Administration – risk management
How do these meetings manage risk?
Department approach is to assign risks to those best placed to manage them
Manage risk to a reasonable level rather than to eliminate all risk
identify and prioritise the risks to the achievement of those policies, aims and objectives
evaluate the likelihood of those risks being realised and the impact should they be realised; and
manage the risks efficiently, effectively and economically
Individual managers are responsible for managing risks associated with scheme management and accounting, given their knowledge of the
issues and can best mitigate any potential impacts.
Delivery of scheme policy objectives, governance and administration of the scheme are the responsibility of the Director of Teachers’ Group
Delivery of the financial reporting and scheme accounting are the responsibility of the Director of Finance and Commercial Group
The system of internal control can therefore only provide reasonable and not absolute assurance of effectiveness

10. TPS Administration – risk management controls
The controls used to manage risk are:
Risk Register – TPS Risk Committee ownership
A single risk register covers contract, policy, finance, reform and administration (strategic and service delivery)
Contractual Audit Requirement – Capita Group Internal Audit
Capita produce and implement an audit strategy that complies with Public Sector Internal Audit (PSIAS)
Annual Audit Plan – GIA/Department
A risk-based annual audit plan is delivered by GIA which is approved by the Department.
Monitoring
Risks and audit finding resolutions are monitored and discussed at the SDB and QSR meetings
Risk Register
Each area has appropriate ownership for managing their relevant risks, and therefore each business aspect is required to take account of
the impact on the other. The structure of the register is reviewed to ensure compliance with risk management good practice
Contractual Audit
The requirement is delivered by Capita’s internal audit division, Group Internal Audit (GIA).
Annual Audit Plan
The Department continually reviews plan delivery, as well as approving the scope of individual audit activity, and reviewing / challenging
audit findings. This audit plan broadly equates to 250 days of audit field work each year, looking at various aspects of the scheme
Administration
Monitoring
Risks and audit finding resolutions are monitored and discussed at the SDB and SB meetings, with strategic/service delivery risk registers
and audit updates incorporated into contract reports

11. TPS Administration – risk management escalation
Majority of issues and risks are expected to be managed at the “working level”
Risks that require action will escalated via the relevant Director or Director General within DfE
Risks relating to the TPS are discussed on an exceptions basis by the Department’s Audit and Risk Committee and Management Committee
Risks will be reported quarterly to the Pension Board
an additional level of challenge and scrutiny
satisfy itself that the risks are being effectively managed
Relevant Director / DG receive monthly and quarterly reports on scheme administration
Management Committee meets monthly - chaired by the Permanent Secretary and includes Non-Executive Board Members - receives a
monthly report on the TPS finances, specifically to satisfy itself that the risk of overspend is being managed, but also to highlight any risks
or issues which relevant Directors General wish to escalate for action or information.
ARC meets quarterly - chaired by the lead Non-Executive Board Member - and discusses the department’s Internal Audit plan, building-
block risks, NAO reports, and the department’s and TPS accounts. Three Non-Executive Board Members sit on the committee, one of
whom provides independent financial advice to the committee.
Issues and Risks are reported quarterly to the Pensions Board, which will provide an additional level of challenge and scrutiny, to satisfy
itself that the risks are being effectively managed

12. TPS Administration – role of the Pension Board
Provide additional assurance on the effective administration of the scheme
Risk-based approach to ensuring effective administration
Focus on scheme performance, continuous improvement, value for money, risk management and compliance with statutory requirements
The Pension Board will have authority delegated by the Scheme Manager to request that the relevant service providers address and resolve issues which it identifies
Through close scrutiny and challenge to the level and quality of service provided for the membership and employers
Focusing attention on areas where there is evidence of high impact and/or probability of failure; where there are high levels of dissatisfaction; or where the administrator is failing to meet the objectives specified in its contract
The Pension Board will have authority delegated by the Scheme Manager to direct the relevant service providers to address and resolve issues which it identifies, and, where necessary, to agree the budget for that additional work to be undertaken
This authority will be subject to the existing contractual agreements and requirements relating to public sector procurement, with the Department retaining responsibility for all contractual agreements and any proposed changes, including the commissioning of any additional work as identified by the Pension Board.

13. TPS Administration – role of the Pension Board (2)
To support the risk-based approach to ensuring effective administration, the Pension Board will be provided with:
risk registers
reports and feedback from the Department’s Head of Pensions
reports from the administrator on the range and quality of services
financial reports
details of complaints/Pension Ombudsman's determinations regarding scheme administration
audit reports and feedback from stakeholders

14. TPS Report and Accounts
Signed by the Accounting Officer
Laid before Parliament
Public statement of TPS income and expenditure
Includes an up to date statement of TPS liabilities
Report of the Manager includes reporting of any issues arising
Accounts will be qualified if, for example, the Department has overspend, NAO’s audit reveals an issue with the control environment.
The Governance Structure provides detailed management and financial information that provides assurance to the Accounting Officer over
the effective administration of the scheme. To ensure that it is operating effectively, the AO also takes assurance from a number of other
sources
The Pension Board must also provide a statement of assurance on governance for the Permanent Secretary in its role as accounting officer for the scheme, within the Resource Accounts.
Department’s Internal Audit Team has regular meetings with the contract management team and Capita’s internal audit team to ensure risks are being identified and managed. IA also undertake a full audit of the contract management team every other year, to ensure that it is carrying out its role effectively, and has in place the requisite resources.
Capita’s Internal Audit team is audited by Capita’s externally-appointed auditors on a regular basis, which provides assurance that they are carry out their responsibilities to the required standard.
National Audit Office carries out an audit of the TPS accounts each year. This includes testing the TPS control environment and systems to provide assurance that the scheme is collecting the correct contributions and paying out the correct pensions etc
TPS relies upon Government Actuary’s Department for a number of key outputs e.g. scheme valuation, early retirement factors. GAD is audited by NAO as part of a “central review” and the Department can take assurance from that work, that GAD carry out their role to the required standard
The Department produces a number of financial forecasts annually to ensure that it has requisite funding to pay pensions. These forecasts are subject to scrutiny and challenge by the Office of Budgetary Responsibility which provides assurance over the forecasting methodology and assumptions used

15. TPS Accounts – sources of assurance
How does the Accounting Officer know that the Governance Structure is working?
Pension Board statement of assurance
Scrutiny by Audit and Risk Committee
National Audit Office audits the TPS accounts each year
Department’s Internal Audit Team
Capita’s Internal Audit team is audited by Capita’s externally- appointed auditors on a regular basis
Scheme actuary (GAD) is audited by NAO
OBR scrutinises and challenges financial forecasts
The Governance Structure provides detailed management and financial information that provides assurance to the Accounting Officer over
the effective administration of the scheme. To ensure that it is operating effectively, the AO also takes assurance from a number of other
sources
The Pension Board must also provide a statement of assurance on governance for the Permanent Secretary in its role as accounting officer for the scheme, within the Resource Accounts.
Department’s Internal Audit Team has regular meetings with the contract management team and Capita’s internal audit team to ensure risks are being identified and managed. IA also undertake a full audit of the contract management team every other year, to ensure that it is carrying out its role effectively, and has in place the requisite resources.
Capita’s Internal Audit team is audited by Capita’s externally-appointed auditors on a regular basis, which provides assurance that they are carry out their responsibilities to the required standard.
National Audit Office carries out an audit of the TPS accounts each year. This includes testing the TPS control environment and systems to provide assurance that the scheme is collecting the correct contributions and paying out the correct pensions etc
TPS relies upon Government Actuary’s Department for a number of key outputs e.g. scheme valuation, early retirement factors. GAD is audited by NAO as part of a “central review” and the Department can take assurance from that work, that GAD carry out their role to the required standard
The Department produces a number of financial forecasts annually to ensure that it has requisite funding to pay pensions. These forecasts are subject to scrutiny and challenge by the Office of Budgetary Responsibility which provides assurance over the forecasting methodology and assumptions used

16. TPS 2015 – Governance Model
Overview of the 2015 Governance Model