• The National Politics;

• Desiderata – Analogies;

• Desiderata – The Qualities;

• Desiderata – The Pension Industry;

• Desiderata – The Fount of Pension Knowledge?;

• Pension Governance Algorithm.

Currently the re-discovered ‘idea’ of saving/investing towards a pension for later in life is receiving Parliamentary cross party support.

Because most Firefighters are prescient people and hard workers they have already embraced this ‘nouveau idea’ for decades past. Indeed they have fought, and are continuing to fight for proper pensions albeit having just thrown away, or had stolen from them, the best Fire Service pension Scheme in the world.

The major weakness which not a single political Party has either identified or has a single compensating policy for is the subject of the entrustment of all this saving/investment for decades to come.

Who is this ‘care for a lifetime of retirement’ investment package to be entrusted to and what happens if the usual fiscal thieves in the ‘city’ run off with the funds; or administrators regularly get it wrong when paying out time comes; or a Fire Authority, or its individual members of staff, engage in unabashed pension fraud?

What seems to be missing in the equation for protection of funds is the recognition that vast sums of monies are involved in a huge range of pension Schemes across the UK including Fire Service Schemes.

There are major fundamental questions to be addressed and underpinned by any government when setting (back up) this great ‘idea’ called a pension saving Scheme but little thought has been given to this critical issue at this stage to the fine detail and range of qualities, including trustworthiness, desirable in those who will actually manage these Schemes on a day to day basis.

Who will set the standards of statutory competence and qualification for those who will, from a daily budgetary standpoint administer, audit, and control a pension scheme in trust?

Who will ‘police’ these standards regularly and how will these qualifications be progressively advanced to Degree level status to ensure ultimate national recognition of pension administration qualifications and consistency of approach on such critical matters  as budgetary protocols, and accounting procedures?

Who will regularly, and annually at the very least, call a Scheme’s governance to account by detailed audit examination?

What positive action will be taken against those managers who hold this investment in trust and when they fail what personal penalties will be applied to them?

Even the briefest conversations with those attempting to provide academic courses for expertise in pension management state candidly that as matters stand today anyone can, in effect, set up a pension scheme and administer it themselves. One leading pension education provider stated that the public would be appalled at the lack of standards and qualifications in those who are currently running some of the largest public sector pension schemes in the UK. This needs to change, or be changed.

As matters now stand post the Hutton it seems that the overall penultimate responsible authority for ‘governance’ will now rest with The Pension Regulator(TPR) the ultimate resting with Parliament itself. However, until the enactment of the new Public Service Pensions Act 2013 which unambiguously passed this penultimate baton of responsibility to the TPR this organisation found itself ill prepared and ill equipped for this major responsibility. It simply did not anticipate that one day it would be asked to work for a living.

Off the record comments by staff indicate that TPR as an organisation has been caught on the back foot and is attempting to gear up to respond to these new proactive statutory responsibilities.

Until this moment in time this reactive organisation was another with a ‘sleepy hollow’ reputation which was quite happy for the government (the taxpayers) to pay their annual budget and wages provided we did not trouble them too much to actually work for a living.

Whenever an issue arose which was clearly within their remit and responsibility they were not remotely interested and were clearly disinclined to ‘engage’ in their duties for which they were handsomely rewarded. This will have to change with little or no time for a leisurely adjustment to the real world and to the Parliamentary accountability position they now find themselves in.

The Morning Bugler has already raised the entire issue of unqualified staff handling and holding significant budgets in the Fire Service sector with the TPR by submitting a brief  ‘paper’ on these alarming topics before the new Code of Practice No:14 on Public Service Pensions  went into print in April 2014.

Even in the ‘dark ages’ of the early ‘90s there was the expectation that when one boarded a train or an aircraft that there was always in the mind of the traveller the expectation that the ‘person up front’ could be trusted to know, by and large in professional terms, what they were doing.

There was the reasonable assumption that those who had a duty of care and service to the public had essential basic training concluding with a recognisable formal qualification all of which would lead to regular update training; refresher training; and conversion on to a new type of role, duty, or service, with the advent of the introduction of new legislation.

It was accepted that these ‘standards’ would be ‘policed’ by an overarching government authority which would regularly audit what was happening and when appropriate apply corrective measures and ultimately civil and criminal sanctions against those who failed to reach the required standard.

Similarly all this and more, were the reasonable expectations of those whose ‘possession’, namely their fire pension, was being administered by any Fire Authority.

The Fire Service before the ‘modernisation’ of the millennium had rigorous Statutory requirements  which were audited annually by the Home Office Fire Service Inspectorate on behalf of the government who also set the ‘standards’ across the board for all compulsory Service qualifications.

Firefighters were not permitted to be ‘Qualified’ until after 4 years’ service during which time repetitive training, assessment, and repeated successful examination occurred.

Similarly, all ranks up to the post of Station Officer were required to hold examinable compulsory Statutory qualifications without which they were not permitted to hold or practice the appropriate rank and furthermore were not permitted to exercise the privileges of that rank without holding a minimum period of service, for example, 5 years in the case of a Station Officer rank, a rank rarely attained during this 5 year ‘apprenticeship’ period.

Above this rank, at command level, it was recognised that certain posts could neither be attained nor practised without the specialist training and qualification essential to that envisaged post, professional education which was provided at a nationally approved central training establishment the Home Office Fire Service College.

During their entire period of service, short or long, it was a requirement that all uniformed ranks must be Members of the applicable and current Fire Service Pension Scheme.

Given this background of essential statutory qualifications within Fire Service management, at all levels, there is the reasonable expectation and trust that those who were to administer and manage their Pension Scheme were similarly qualified; monitored; regularly evaluated, and regularly examined by central government and, to put it bluntly that not only did these pension ‘practitioner experts’ know what they were doing but they also knew what they were talking about.

These ‘experts’ were dealing with substantial sums of taxpayers money regularly contributed to by uniformed Scheme Members and as matters transpired substantial amounts of public ‘top up’ of tax payers monies received at the end of another deficit(in the red) pension administrative year to the tune of 80% of this deficit; not mere thousands of pounds, but millions of pounds.

But the reality is however starkly different when the question is asked, “What are the minimum nationally recognised qualifications(whether Statutory or not) which are necessary to hold a post from a simple clerk of the lowest grade in pensions administration up to a Statutory duty  Scheme Manager within the ‘pensions industry’?”.

When Pandora opened her Pithos she could only provide the simplest of scandalous answers, none!

No qualification, either voluntary or Statutory, is required to call oneself a pensions ‘officer’/administrator/or Scheme manager. In point of fact Statutory qualifications in pension management simply do not exist.

One is also drawn to ask in this extraordinary situation do voluntary qualifications even exist for those who are minded to attain them because self-improvement might provide the end user(a Scheme Member) with some semblance of reassurance that his pension was in professionally capable hands? Indeed they do.

What qualifications should the man in the street or a Scheme Member reasonably expect? A Member would reasonably expect that a pension practitioner ‘expert’ would at least be able to add; subtract; multiply; divide if only using the most basic calculator; that the ‘expert’ would have basic auditing skills to make the books balance, but above all else would have a fundamental understanding of the practical implementation of the relevant Statutory Instrument – the pension law.

So what are the desirable special qualities and formal pension management qualifications which common-sense dictates that those who are placed in this position of trust and in good faith in managing a Scheme must hold as a basic minimum?

• The minimum nationally qualified ability skills range required in an individual specialist pension administrator at all levels of both basic work and supervision must include such attributes as auditing; accountancy; budgetary control and its mechanisms; a knowledge of pension actuarial concepts;the ability to interact successfully with a data based record system; and the essential capability to read, understand, and apply the relevant guides to the applicable Statute Pension Law in their application to a specific pension and type;

• A basic understanding of  the DWP jargon and its abbreviations guide on benefits as supplied to pension staff and managers and applied(or not) by them to retired Fire Service Veterans’ pensions;

• An understanding, application, and implementation of DCLG-Firefighters Pension Team’s Statutory and non-statutory guidance, the difference, and its implementation in the practical context of a pension;

• The holding of suitable and applicable nationally recognised qualifications in compliance with the national professional standards set and demanded by, for example, Ofqual and the Financial Conduct Authority, in the governance of every area of pension scheme management, consultancy, and trusteeship;

• Standards which should be subjected to regular refresher and currency training logged on the personal record of individual  practitioners.

Given these ideals and achievable standards in the real world where are these qualifications to be obtained and who provides the training and more importantly the approval and  ‘policing’ of these standards?

This is not intended to be a dissertation on the state of professional education for pension management within the pension ‘industry’ but is intended to provide a snapshot for the Reader of the current state of play within an industry responding post Hutton to the need for revision and overhaul, leading to modernisation, and the critical need to advance proper education and qualification within pension management staff, at all grades.

All of which can be no bad thing, when as now, it relates in particular to the management of Fire Service pensions.

 A brief joint ‘mini’ survey and report in July 2010 by JLT Employee Benefits Limited and The Pensions Management Institute provided a useful insight into how the ‘industry’ viewed itself. A report which commenced with a laudable and accurate first statement…

 “Good governance matters and effective administration is at the heart of any well run pension scheme. Without the right people, systems and controls to ensure its smooth operation, a pension scheme is destined to deliver a poor member experience, the sponsoring employer will be funding a scheme that is not valued by employees, and resolving complaints and disputes will become a full time occupation for the trustees or managers.”

If ever an independent statement could accurately be used in juxtaposition to demonstrate how the LFRS and its contractor the LCC Pensions Services failed miserably to deliver a well managed Fire Pension Scheme in Lancashire then this is it.They failed on ever single principle stated above. 

The only surprising omissions was the critical need for these ‘right people’ (the ‘experts’), to be suitably professionally educated and nationally qualified in pension management.

Regrettably, in an otherwise objective and self critical Report the only self-delusional sour note of over confidence in this Report, which is hardly surprising in an industry which has just snap surveyed and reported on itself, is one of the concluding comments which states…

 “Nevertheless, whilst the majority of pension schemes are well run, there is always room for improvement.”

Go here

Unfortunately that is far from reality in the management of Fire Service pensions as the Bugler will shortly demonstrate in detail, citing Lancashire as a prime and scandalous example of justification for Hutton.

One of the industry’s current major concerns seems to be   

the (in)accuracy of digital data contained in old first generation record databases which have only over the last decade(or less) been digitised or transposed from manual records.

In plain English individual Fire Service hand written pension records which have been manually transposed onto a digital database; written records may in some case go back over 3 decades or more.

The doubt is whether or not these first generation digital databases(personal pension records) are accurate and properly reflect the correct current state of an individual’s pension payments, etc.

In other words, if in fact the Fire Service Veterans of today are receiving the correct pension from its commencement date.

The next rhetorical question is whether or not it would be best for all these first generation digital databases to be wiped clean and the whole process of digitising be carried out again by firstly checking the accuracy of the original written records for error and then checking the accuracy of the transposed manual record-to-digital accuracy. Order, counter order, disorder.

Lancashire has like many others opted for the half-baked lazy solution. In other words a cut-off date/year was chosen, for example 2009, and all the individual written FSV records which went before that date/year have been ignored, may be missing, and are thus, not digitised. Indeed the digitised information is frequently incorrect reflecting incorrect hand written records.

The consequence of this is of course is that if an error in payment has occurred in the pre-digitised period then that error is now cast in stone and this is a failure of service both to the Scheme member and the taxpayer.

If  the error is to the disadvantage of the Fire Service Veteran then it will continue to be so until the expiry of the FSV, unless using the Bugler checking system later, the accuracy of the entitlement is re-examined by the Scheme member, their beneficiaries, or their lawyers.

It is indeed from such a parlous and scandalous state of affairs that all FS Schemes are destined to deliver a poor Scheme Member ‘experience’ which is neither valued nor trusted by former employees and in which the resolving of complaints and disputes will become the full time occupation for a Scheme manager.

But as we shall see that is not how Lancashire, using bad faith as a staring point, deals with its fiduciary duties and legal obligations to its Scheme members.

Ofqual – The Office of Qualifications and Examinations Regulation is a statutory body (without a Minister) set up under the Apprenticeship, Skills, Children & Learning Act (2009) and the Education Act 2011. It reports directly to Parliament. Ofqual recognises, regulates, authenticates, and monitors ‘awarding’ organisations which deliver education and ‘regulated’ qualifications.

Ofqual have the powers to rescind a ‘recognition’ and accreditation and impose a fine if needs be.

Ofqual works in coordination with the Quality Assurance Agency for Higher Education (QAA) which is responsible for safeguarding the public interest in standards of higher education qualifications. Ofqual is most commonly associated with GCSEs and A levels in England.

It is Ofqual/QAA’s duty to maintain standards and confidence in the approved suppliers of training and qualifications including a wide range of vocational qualifications which includes pension management qualifications, in England.

To become Ofqual recognised, accredited, and approved an organisation must apply and subject itself to initial scrutiny.

For a particular qualification it must comply with the parameters which Ofqual have set and published for that vocation. 

Once an organisation/subject has been accredited and a Regulatory Document issued to them Ofqual will enter the organisation and its qualification onto its Register.

An accredited organisation must make an annual declaration that it is maintaining the standard of approval and accreditation it agreed with Ofqual in their joint Regulatory Document.

The Ofqual’s Register of Qualifications database currently only recognises one organisation under the section heading ‘Accounting and Finance’ approved for pension management education in the UK, namely the Pension Management Institute.

The Pension Management Institute(PMI), a commercial organisation, is a benefits and pension consultancy which sells training and offers Ofqual recognised and approved Award, Certificate, and Diploma courses in the pension management at a variety of levels, though none to higher education degree level.

Although the PMI states that it has been in existence for 35 years it is noteworthy that the first course to be recognised  by Ofqual in pension management did not take place until 2008.

This simply reflects the gradual awakening in the pension ‘industry’ in the 21^st century(reinforced recently by Hutton) for the absolute need for pension administration staff, at all levels of management, to be properly professionally educated and qualified to administer pension Schemes, with budgets which can regularly run into 7 figures.

Ofqual’s Recognition and approval Register currently lists 8 types of qualifications for pension management. All are by the PMI. These Recognitions have been granted and regulated under the terms of its ‘Qualifications and Credit Framework’(QCF).

This is basically a ‘learn-and-qualify-as-you-go’ flexible system based on the accrual of formal credit units over study-time(One credit will usually takes 10 hours of learning) all counting towards a final on-line multi choice question examination; or a written centre based examination; or simply the issuance of an Award, Certificate, or Diploma qualification, when a set total of units is accomplished and accrued.

Units build up to qualifications. There are three different types of qualification in the QCF: Award, Certificate, and Diploma.

For example an Award can be achieved with 1 to 12 credits; for a Certificate 13 – 36 credits are needed; and for a Diploma at least 37 credits.

Pension Management Institute Ofqual qualifications.

Go Here.

This methodology is commonly recognised today as an acceptable method of training and qualification ‘on the job’, though one might question its logic when, as in the case of pensions, an error whilst training on the job, in calculation or statutory implementation, can have an immediate and dire affect on an individual’s income and thus their well-being and more importantly, for decades to come.

Given this example, this simply raises once more, the concern that until such qualifications are  attained, held, and practised as a matter of imposed Statute law then the Fire Service pension ‘industry’ is going to continue to fail and stagger from one self-generated debacle to another in a state of self-delusionary self-congratulation that all is well.

It is clear therefore that since 2008 there is simply no reason or acceptable excuse why any FS Scheme in the UK should not be properly administered by any Scheme manager or staff without them holding, at every level of responsibility, even on a voluntary basis, suitable and essential qualifications.

Ofqual has already recognised their need and has made provision for it and the general pension industry have also recognised the need by the provision of on-line and training centre based courses leading to the issuance of national and internationally recognised pension management qualifications.

So why has this not already occurred?

The answer does not require speculation; lazy and inept ‘managers’ without a single qualification of any description to their name, in any discipline,  masquerading as pension practitioners, who fail to recognise, as so called senior managers the critical need, beginning with themselves, to acquire and practice pension management qualifications.

This allied with their failure as ‘managers’ to identify, publicise, and make training provision within their existing staff for the critical necessity for all of them to have basic pension management qualifications.

A management which also fails to make provision for and encouragement of those who wish to educate themselves for the future by providing career incentivised schemes which will encourage the development of the next generation of pension administrators, who cannot but fail to do a better job than the present ‘managers’.

What are the symptoms of potential terminal financial meltdown in the ‘management’ of any Fire Service pension Scheme which both these publicly accountable ‘managers’ and their political masters have failed to read?

The Lancashire Fire & Rescue Service pension Scheme, an appalling example, which staggers from self-generated crisis to debacle is simply the consequence of failed and unaccountable managers and politicians who simply did not want to read the signs of the impending crises.

Those responsible, who when overtaken by predicted events, then engaged in a botched cover up with ‘vinegar and brown paper’ solutions; coupled with an arrogant and outrageous blame game where the honest pensioners who  were the unwitting victims of this collective insouciant incompetence were then publicly censured by the very ‘managers’ and politicians upon whom rested the accountable legal duty  for the protection of  their pensions in the first place.

So this is just so much hyperbole is it?; then it is surely time to read on…

Until 25^th April 2013 with the enactment of the Public Service Pension Scheme Act 2013, the responsibility for the good governance of all Fire Service Pension schemes rested entirely with the DCLG-Firefighters Pension Team(FPT), or as they would have preferred in lazy ‘delegation’, with ‘local’ Scheme managers.

A ploy which distanced the DCLG-FPT from the tiresome daily grind of the day to day management of the Schemes for which the DCLG-FPT were actually responsible.

Post Hutton Fire Service pension governance has now been streamlined and formalised in law to the discomfort of the DCLG-FPT and many other Scheme managers.

Governance, or where the ‘buck’ stops, now commences with ‘local’ Scheme managers who are accountable for not only their Scheme but the creation of new local Boards of Pension management who ‘assist’ the Scheme manager to run their Scheme.

It appears at this point in time no such ‘local’ Boards have actually been created or are even envisaged, including Lancashire.

This collective local management is held accountable and is directed in matters of pension management by the DCLG-FPT which is in turn held accountable by The Pensions Regulator, a non-departmental public body; The Pensions Ombudsman (so called independent) who collectively report via the Pensions Minister and thence to the Secretary of State DWP, to Parliament via the Parliamentary Select Committee for Work and Pensions.