Top Ten Employer Processes - Best Practice

Have you considered best practice when it comes to Employer processes?

To help out, we've put together a top 10 best practice guide. Following these simple steps allows us to progress cases without delay and, importantly, deliver a much better service to your members.

Leavers

Best Practice: To provide leaver forms within 10 days of the member’s last salary payment. This ensures their pension payments are made without delay or arrangements for other benefits such as refunds or transfer outs are paid on time.

If a member is planning to retire, they’ll have a better chance of getting their first pension payment on time if we are notified two or three months ahead of the planned retirement date.

Obviously, three months’ notice isn’t always possible, but with your support, we can help members understand the importance of letting us know early and completing their paperwork on time. Ultimately, this will help to reduce delays, improve turnaround times, and give the member the best chance of getting their first pension payment when they need it.


Why?: Pension provision is part of an employee’s remuneration package and delaying the provision of a leaver form can impact their ongoing personal finances.



Responding to Employer queries

Best Practice: Respond to Employer queries asap, within 5 working days if possible. Prioritise urgent queries that relate to: death in service, ill health retirement and general retirement.


Why?: Often we may have to query information you have provided on forms before we can process the case. Without a resolution to the query this causes delays in paying / processing members’ benefits.



Employer contacts

Best Practice: Ensure that you keep LPPA updated of any changes to the relevant contacts in your organisation, removing any contact details for people who have left and adding any newcomers.


Lancashire / Cumbria Employers



All other Employers


Why?: This ensures we direct our queries to the correct person and can resolve queries quickly. This also guarantees that all relevant contacts will receive updates, information and invitations to any training events or conferences that we are holding.



Best of the last 3 years (BOLTY)

Best Practice: When providing leaver information for a scheme member, who has final salary benefits, you should always consider the full time equivalent pay (FTE) from the past 3 years. You should provide the highest rate from the final 3 years in the first instance on the leaver form.

Why?: The final salary scheme protects members who have had a reduction in rate of pay in their final years of employment. Final salary benefits should be calculated on the best FTE rate of pay from the final 3 years of their employment. If this is not provided in the first instance, this generates a query to the Employer therefore delaying the processing of member benefits.



Early application of deferred benefits on the grounds of ill health

Best Practice: It is your responsibility to make decisions on the outcome of early application of deferred benefits, even though the member is no longer actively employed by you.


In order to arrive at a decision you should seek an opinion from an Independent Registered Medical Practitioner (IRMP), they should complete the relevant medical certificate. You should forward a copy of the certificate to LPPA. This allows us to pay benefits early on the grounds of ill health if the outcome is to approve the request.


Why?: LPPA are unable to progress early payments of deferred benefits on the grounds of ill health, which are often urgent, without sight of the completed medical certificate.



Ill health retirement (medical certificate)

Best Practice: You should forward LPPA a copy of the completed medical certificate, at the earliest opportunity. We need a copy of this along with a completed leaver form.


Why?: LPPA are unable to progress ill health retirement cases, which are often urgent, without sight of the completed medical certificate. For further information around ill health retirement and paying benefits early on the grounds of ill health, please view our guidance page.




Death in service notification

Best Practice: Complete our online Bereavements Form as soon as reasonably possible after finding out about a death in service. In addition to this, we also require a leaver form showing details of the deceased member’s pay to enable us to calculate death benefits. When calculating these benefits we use the value of Assumed Pensionable Pay (see point 9 for more details on how to calculate this).

Why?: Having details of next of kin (Nok) allows us to make contact at the earliest opportunity to provide details of the death benefits due and details of the next steps.



Death grant nomination

Best Practice: You should make any new scheme members aware of the importance of updating their death grant nomination. A perfect opportunity is the induction process. It’s also good practice for you to highlight the importance of reviewing and updating death grant nomination details periodically. You can do this via internal
communications, intranet articles or any other way in which you communicate with your Employees.


Why?: Ensuring there is a death grant nomination on file allows us to pay death benefits more quickly. If there is no nomination on file the relevant pension fund must make a decision about who to pay any death grant benefit to which can cause delays.



Assumed Pensionable Pay (APP) for leavers

Practice: Supply APP to LPPA as part of your regular data submission. APP should also be provided on the leaver form where there has been APP applied to the members’ pay in the relevant period. APP is also needed for all ill health retirements and death in service, even if the member has not been on reduced or nil pay.


Why?: If APP is not supplied in the first instance this generates a query which delays us processing the case.
Delays in progressing can adversely affect the service delivered to scheme members.


Additional note

Lancashire / Cumbria Employers: You should report APP in replacement of the pensionable pay received when a
member is on a period of absence that is protected by APP. If you do not submit APP for a month it should have applied you must submit an ‘adjustment to pension pot form’ to allow us to correct that periods pension accrual based on APP.


YourFund users: You should supply APP where applicable as part of your year end process. For more information about APP please view our guidance page.




Online Pension Account

Best Practice: You should make any new scheme members aware of the member self-service portal – My Pension Online. A perfect opportunity is the induction process, please note that members can only sign up for
MPO around 6/8 weeks after joining the scheme. It’s also good practice for you to consistently highlight the importance of MPO to scheme members. You can do this via internal communications, intranet articles or any
other way in which you communicate with your employees.


Why?: MPO allows members to manage their pension online. Via MPO they can: view their annual benefit statements; update their contact details; update and review their death grant nomination; produce pension forecasts. All at the click of a button!



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