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Provision of Administration Services for the Legal Services Commission Pension Scheme (Administration, Investment and Actuarial Advice).

Prior information notice


Directive 2004/18/EC

Section I: Contracting authority

I.1)Name, addresses and contact point(s)

MoJ Procurement
Ministry of Justice Category Management Team- North Units 8&9 Fryersway Ossett
For the attention of: Bruce Charlton
WF5 9TJ Wakefield
Telephone: +44 1924205710
Fax: +44 1924205702

Internet address(es):

General address of the contracting authority:

Address of the buyer profile:

Further information can be obtained from: The above mentioned contact point(s)

I.2)Type of the contracting authority
Ministry or any other national or federal authority, including their regional or local sub-divisions
I.3)Main activity
General public services
Public order and safety
Social protection
I.4)Contract award on behalf of other contracting authorities
The contracting authority is purchasing on behalf of other contracting authorities: yes

Section II.B: Object of the contract (Supplies or services)

II.1)Title attributed to the contract by the contracting authority:
Provision of Administration Services for the Legal Services Commission Pension Scheme (Administration, Investment and Actuarial Advice).
II.2)Type of contract and place of delivery or of performance
Service category No 27: Other services
England and Wales.

NUTS code UK

II.3)Information on framework agreement
II.4)Short description of nature and quantity or value of supplies or services:
The Legal Services Commission (LSC) was abolished by The Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) and the Legal Aid Agency, an executive agency of the Ministry of Justice (MoJ) was created. All LSC employees were transferred to the new agency on 1.4.2013 and became Civil Servants; as a consequence of which they were all auto enrolled into the Premium scheme of the Principal Civil Service Pension Scheme (PCSPS). In view of which, with effect from 1.4.2013 the LSC No.4 scheme is closed to future accrual. Members have been offered the opportunity to transfer their accrued LSC benefits into the PCSPS under the terms of a bulk transfer.
Background to the Scheme
The LSC pension scheme is a Trust based 'final salary' scheme with an accrual rate of 1/80th. Benefits, payable at 60, comprise of a pension and a tax-free lump sum of 3 x pension (commutation is not possible under the rules). The scheme also provides a 50% spouse's pension for most members who are married or in a civil partnership.
As of 31 March 2013, the fund had c GBP 340m in assets and the funding position was above 90%. The approximate membership profile of the scheme is as follows:
Preserved (1) c 2 200
Pensioners c 800
Total c 3 000
(1) c 1 000 members are currently in the process of making a decision as part of the bulk transfer and may transfer their benefits to the PCSPS.
Current Service Provisions
The MoJ has a pension's team, including a Pensions Manager, dedicated to the LSC scheme. Their current role comprises:
- manage the day to day running of the scheme
- stewardship of third party contracts
- liaise with the sponsoring employer (i.e. MoJ) and the
Trustees of the scheme
- accounting and cash management, including production of
annual report and accounts, audit etc
- drafting all member communications
In addition a third party organisation currently provides the following services to support the Trustees and the in-house MoJ pension's team:
- Third party administration
- Pensioner payroll services
- Scheme Actuary
- Trustee secretariat services
- Consultancy advice
- Investment advice
Future Service Provisions
It is intended that the new contract will be in place by April 2014 with the duration linked to the frequency of actuarial valuations.
The service is to include online based access for all members, this will enable individuals to access and update their pension records. For example, it would include the option for members to see the current value of their pension benefits, have access to their payslips, and view scheme announcements.
The minimum services required by the Trustees of the LSC pension scheme are detailed below:
1) Third party administration
- transfer of all member data, including the scanning of
historic member files / scheme documentation so as to establish a single complete data source for the LSC scheme
- administration of all pension awards (including retirements, ill health and death)
- administration of any other associated functions (pension sharing on divorce, transfers, etc)
- handling of all correspondence and enquiries from preserved members, pensioner members and external bodies
- ensuring the integrity and accuracy of all member data, including record keeping.
- production of quarterly administration reports for the MoJ Pensions Manager and Trustees
- provision of scheme data, for example for triennial actuarial valuations and annual accounting purposes, etc
- ensuring compliance with the Disclosure Requirements and all other legislative requirements
2) Pensioner payroll services
- accurate and timely payment of all pension payments
- application of annual pension increases and notification to pensioners
- reconciliation of the insured annuity payments
- comply with all relevant HMRC legislation
3) Accounting and cash management
- maintenance of the scheme cashbook and accounts
- making payments to beneficiaries / external bodies / other providers
- administering the banking arrangements
- production of the Trustees' Annual Report and Accounts
- managing the annual audit of the scheme accounts
4) Actuarial services
- actuary for the scheme, as set out in the scheme rules and statutory requirements
- IAS19 annual valuation
- actuarial calculations, where not performed by the administration function
- quarterly updates on financial position for the Trustees and Employer
- performing triennial valuations
5) Consultancy
- general pensions consultancy advice
6) Trustee Support
- scheme governance and risk management
- secretariat services (including hosting Trustee meetings, drafting minutes, recording and reviewing action points)
- arranging / delivering Trustee training
7) Communications
- drafting for Trustee approval all member communications, for example producing and issuing the summary funding statement and annual report to members
Other Future Services
The Trustees are also considering the following services, which may or may not be included within any future tender.
Investment advice
- provide advice to the Trustees on their investment strategy / funding matters
- assist the Trustees in selecting and controlling the Investment Manager(s)
- draft the Trustees Statement of Investment Principles
Ongoing pension management / stewardship duties
- requirement for a named Pensions Manager to report to the Trustees on service and contract delivery assurance (in line with the service level agreements).
- liaise with the sponsoring employer of the scheme
Estimated cost excluding VAT:
Range: between 200 000 and 1 400 000 GBP


This contract is divided into lots: no
II.5)Common procurement vocabulary (CPV)

66520000, 66519600, 66521000, 66522000, 66523000

II.6)Scheduled date for start of award procedures
II.7)Information about Government Procurement Agreement (GPA)
II.8)Additional information:
The Ministry of Justice came into being in May 2007. It brought together the responsibilities of the Department of Constitutional Affairs, the National Offender Management Service and the Office for Criminal Justice Reform.The Legal Aid Agency is an executive agency of the Ministry of Justice. It came into existence on 1 April 2013 following the abolition of the Legal Services Commission as a result of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012.
Scope of Contract
The objective of this procurement is to put in place suitable value for money LSC Pensions Administration Services with operational management and control arrangements on behalf of the LSC Pension Scheme Trustees.
Market Engagement.
In order to support potential tender process for LSC Pension Scheme Administration services the Ministry of Justice is planning to hold a Market Engagement Event.
An Event will be held on 28.8.2013 with the aim of bringing together and engaging with potential providers of the service.
Any potential provider interested in the Market Engagement Event should register themselves on the Ministry of Justice eSourcing Portal (see below) where they will be able to access further information about
the market engagement event(s).
The Ministry of Justice eSourcing Portal - Emptoris - will be used throughout this procurement exercise.

The eSourcing Portal is an online application that allows all potential providers to create and submit their responses to any Requests for Information, Requests for Quotes, or Requests for Proposals via the internet rather than in paper form (where they have been invited to respond). If you are not registered on the eSourcing Portal please send an email to providing the following information:

Organisation Name.
Your Name.
Contract email.
Sourcing Reference Number: 3393-2-Professional Services-N-RFP

The buyer will then contact you with the registration process. Once registered please confirm this with , to ensure that you are added.

If you are already registered on the eSourcing Portal, please contact the above named buyer expressing your interest in the sourcing event. You will then be notified by email when the sourcing event has been opened.
HM Government requires that tender documentation issued by government departments for contracts

exceeding GBP 10 000 over the life of the contract are published online ( for the

general public. The resulting contract shall also be published.
The Ministry of Justice may use its discretion to redact information to protect key commercial interest or on prescribed grounds. Therefore potential providers who wish information not to be published if successful
should secure agreements with the Ministry of Justice prior to submission.
This could include key commercial interest, would be trade secrets and commercial interests which would be prejudiced by publication, all following the test in section 43 of the Freedom of Information Act 2000

Only documentation related to the award will be published.
The prescribed grounds for redaction are:
(a) national security;
(b) personal data;
(c) information protected by intellectual property rights;
(d) information which is not in the public interest to disclose (following tests under the Freedom of
Information Act 2000)
(e) third party confidential information;
(f) IT security; and
(g) Prevention of fraud.
Appointment of Provider and Award of Contract.
The Ministry of Justice reserves the right to reject all or any of the bids for the competition and not to appoint any potential provider, without any liability on its part.
Nothing in the OJEU prior information notice shall generate any contractual obligations prior to the signature of acontract following the completion of the tender process.
Freedom of Information (FOI).
The Freedom of Information Act came fully into force in 2005. If any organisation considers that any information supplied by them is either commercially sensitive or confidential in nature, this should be highlighted and the reasons for its sensitivities specified. In such cases the relevant material will in response to FOI requests be examined in the light of exemptions provided for in the Act.
Further Information
Will all the individual services listed in the ‘Future Service Provision' be required?
We have identified a number of services which we think are essential, these are marked accordingly. In addition to which, there are a number of services which we have marked ‘For consideration'. These are services for which a number of factors remain to be resolved before we decide to include in any future contract. If included in any tender documentation however, we would expect that they are costed separately by bidders. At this stage however, we would be interested to hear thoughts and comments regarding these ‘additional' services. For example, their suitability, and whether or not there would be a cost reduction for the provision of the services if in the event it was decided to include the ‘total service' package in any future contract.
Would any future contract permit the option to increase the scale of the services?
There is the possibility in the future that we may wish to repackage the provision of services for the LSC pension scheme together with those associated with a number of other pension schemes. As such we would be interested in the ability of service providers to handle any increased member and transaction volumes, and of any associated cost reduction per unit that this may attract.
What are the preferred payment terms?
The LSC is a ‘closed' scheme, i.e. there are no ‘active' members accruing service. It is in view of the stable nature of the scheme that a ‘fixed fee' may be the most appropriate manner in which to determine the cost of services. There are two services however, namely ‘Consultancy' and ‘Investment Advice', where instead the cost may be more appropriately based on a price per hourly rate basis. Despite the above, we are keen to consider other costing structures, and invite service providers to both comment on our ideas and to suggest alternatives.
What are the required service standards?
It is anticipated that there would be an overall minimum performance requirement of:
- c.98 % within time and accuracy standards
- c. 95+% for all
- 100 % for awards involving death of a member
(There would be lower level measures for individual transaction types)
We would expect that there would be a return of costs for each instance that service standards are not met. We invite all bidders to indicate how and what penalty clause they think appropriate, and of the level of financial impact.
What is the intended length of the contract?
Given the activity type and the stability of the scheme, it is anticipated that the length of the contract would be 6 years. In part, this is to ensure that the contract cycle is different to that of the provision of actuarial valuations. We would also envisage that any contract would include the provision for the possibility of 2 extensions. Longer contract length, with cost reduction, would be considered. It is also anticipated that there would be a break clause, after 3 years, to protect the Trustees.

Section III: Legal, economic, financial and technical information

III.1)Conditions relating to the contract
III.1.1)Main financing conditions and payment arrangements and/or reference to the relevant provisions governing them:
III.2)Conditions for participation
III.2.1)Information about reserved contracts

Section VI: Complementary information

VI.1)Information about European Union funds
The contract is related to a project and/or programme financed by European Union funds: no
VI.2)Additional information:
VI.3)Information on general regulatory framework
VI.4)Date of dispatch of this notice: