Sutton's Pension Board has been informed of a potential delay in implementing the McCloud Remedy due to software delivery challenges, risking a breach of LGPS Regulations. While initial estimates suggested 3% of members would be impacted by the McCloud Remedy, the latest estimates, given actual data, indicate probably less than 1% of members are actually impacted by this.
The update was provided during the board's meeting on Thursday, July 17, 2025, where members discussed pension administration performance, projects, governance, and risk.
The McCloud Remedy addresses age discrimination found in public sector pension schemes, including the Local Government Pension Scheme (LGPS), related to the transition from final salary to career average schemes in 2014. The statutory deadline for implementing the remedy is August 31, 2025.
According to the Pension Administration Projects Update, the Data and Systems team is working with Civica, the fund's software provider, to deliver the necessary software upgrades to rectify members' benefits. While 78.1% of data sets have been received from fund employers, and 24.4% of employers' data has been validated, only 5% has been loaded onto the system. Essential upgrades were received into the test environment on June 24, 2025, with user acceptance testing underway. A second release is expected in early August to address initial issues uncovered during testing of the first release. The specifics of these issues have not been detailed.
The report stated that the main challenges to delivering this project before the statutory deadline of 31 August 2025 were stated to be software deliveries and resource capacity. The report pack noted that essential upgrades had been received into the test environment on 24 June 2025, and that the Data & Systems team were carrying out user acceptance testing before loading into the LIVE environment, planned for 8 July 2024.
Given these challenges, there is a real strong likelihood
that the fund will not be fully compliant by the deadline. This could result in a breach of LGPS Regulations, requiring the fund to report itself to the Pensions Regulator. If the fund fails to meet the McCloud Remedy deadline, it would be in breach of the law and would need to record this in their breach of the law register. It would then assess whether to report that to the pension regulator. The regulator is not anticipating any fines at this stage if the board reports itself early with a clear project plan to get it back on track. The fund plans to seek additional third-party support to supplement in-house resources to mitigate the risk of failing to have the data validated and loaded by 31 August, due to significant demands on existing officer resource capacity and the loss of key staff capacity to sickness absence. The report does not specify the expected cost of this support, but it notes that the fund will assess the value for money of such support.
The Governance and Risk Update included a risk register overview report, categorising risks under administration, funding and investments, and governance. The red-rated risk was:
- Failure by software provider (Civica) to provide software compliant with LGPS Regulations, potentially leading to non-payment or incorrect payment of member benefits. The meeting information indicates a potential breach of LGPS Regulations due to the failure of the software provider (Civica) to provide compliant software, potentially leading to non-payment or incorrect payment of member benefits. The specific regulations are not detailed.
View the full agenda and reports pack from the meeting on the Sutton Council website.
