Islington Council has announced a delay in the externalisation of its school payroll services, pushing the implementation date back to May 2026. The decision, impacting how schools manage their payroll, was revealed during a recent Pensions Board meeting, where board members reviewed the council's Pension Risk Register (PRR).
The change is reflected in an update to Risk 9, which has been renamed 'School Payroll Externalisation and Late Reporting' to more accurately represent the specific risk involved. The risk rating for this area of work has been assessed as 12, highlighting the critical nature of this area and the constant monitoring that will be required.
The council's decision to discontinue its in-house schools payroll solution means that Islington schools are now in the process of arranging alternative payroll services with external providers. This transition introduces a new set of challenges that the council is actively addressing to ensure specified monthly reports are supplied on time and the correct pension contributions are received.
To mitigate the risk of late reporting and incorrect pension contributions, the council is implementing several measures:
- Early engagement with external payroll providers to set out requirements.
- Long-term employment of iConnect solution for capturing accurate member data.
- Late payment penalties for non-compliance.
Potential consequences for schools and employees if the monthly reports are not supplied on time or pension contributions are incorrect include the late issue of pension statements and government statutory returns.
The Pension Risk Register Oct25-PensBoard Dec25 outlines the key objectives of Islington Pension Fund and its administration. It establishes the methodology for implementing proactive risk management to ensure that Islington Pension Fund has sufficient assets to meet its pension liabilities in accordance with the Pensions Regulator code of practice.
