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					Penfriend Autumn 2007
Welcome to Penfriend, the newsletter for Lothian Pension Fund retired members.
This edition
    Gives you a summary of our annual report;
    Explains a change in our investment strategy;
    Tells you about our performance; and
    Reveals the results of our latest survey.
We also tell you how you can give your views through your new Pensioner
Representative.

How do you get your pension payslip?

Ever wondered exactly what goes on behind the scenes to get your payslip to you
each month?

The City of Edinburgh Council payroll section works with us at Lothian Pension Fund
to make sure that the amount of pension paid and the account it is going to are right.

We send the data to the Council’s information technology (IT) partner. They were
chosen in a competitive tendering process by the Council’s e-Government section in
2001. They carry out all of the City of Edinburgh Council’s IT work, making it more
cost effective than using different suppliers.

The IT partner works with a sub-contractor to print and post payslips to pensioners.
Both BT and the sub-contractor comply with all relevant legislation, including the
Data Protection Act, to make sure information is safe and confidential. The system is
similar to how a bank would post your bank statement to you every month.

Pensions increase

Your Lothian Pension Fund pension increases each April based on the retail price
index at the end of the previous September. The spring issue of Penfriend will
explain exactly how pensions increase is paid. The Department for Work and
Pensions will confirm the retail prices index increase in March 2008. The increase for
2008 will probably be in the region of 3.9%.

Your voice

In March 2007 we set up a new Consultative Panel with member and employer
representatives to comment on pensions issues. The Panel will meet with the
Pensions and Trusts Committee – the quasi ‘trustees’ of the Fund. City of Edinburgh
Council local councillors choose the ‘trustees’ from among themselves.

You can contact the pensioner representative on the Consultative Panel below with
your opinions and suggestions. He has been appointed by trade unions, but will
represent everyone getting a pension from Lothian Pension Fund.

Pensioner Representative
Owen Murdoch
1 Ladeside Road
Blackburn
West Lothian
EH47 7JW
Tel: 01506 632032
Email: ryan.grier@talktalk.net

You can read more about how the Consultative Panel is chosen and how the
Committee operates in the policy documents in the ‘publications’ section of our
website. Or contact us if you would like printed copies.

National Fraud Initiative

Lothian Pension Fund is taking part in an exercise to ensure that public money is
being spent properly. We have to protect the public funds we administer. To do so,
we can share information with Audit Scotland, in order to prevent and detect fraud.
This will ensure that:
      no pensions are being paid to people who are no are longer entitled to them;
      pension income is being declared when they apply for housing benefit;
      people who go back to work when receiving a pension are receiving the
         correct amount of pension.
Information will only be shared for these purposes: your details are completely safe.

If we have overpaid a pension because a death has not been reported, we will ask
for the overpayment to be repaid.

Your opinions

Our latest customer survey showed some encouraging results.

What you said              Typical comments                     What we will do
97% felt that the          ‘I look forward to reading           We will continue to produce
Penfriend newsletter       Penfriend.’                          Penfriend twice a year.
was a good idea.           ‘Communication to me seems to
                           have improved recently, through
                           the newsletter.’
74% felt they always       ‘Basic info such as contact info     We will continue to include
knew who to contact –      very clear.’                         contact information in all of
an increase of 31%.                                             our publications and letters.
85% thought our            ‘Normally helpful if calling. Very   We have changed our
information was prompt     prompt with written                  administration teams to deal
and 95% said it was        communications.’                     with more key tasks quickly.
always accurate. 86%
said staff were always
helpful.
37% were aware of our      ‘Just spent some time on the         We include all key
website – an increase of   website, seems comprehensive         information in Penfriend,
19%.                       and clear.’                          which is posted to retired
                           ‘Why is it taken for granted that    members twice a year.
                           we all have access to the            Contact us if you would like
                           websites, when many do not.’         printed copies of any other
                                                                publications.
Some of you asked for      ‘Audio tape would be useful.’        Please give us your name
information to be                                               and address if you would like
provided in other                                               information in another format
formats.                                                        and we will try to provide it.
Some of you suggested      ‘If you ask people to return a       Our survey included a
improvements to the        questionnaire, you should            FREEPOST address, but
survey.                    enclose an addressed envelope.’      next year we will include a
                                                                pre-addressed envelope. We
                                                                 will also add an option to
                                                                 reply online.
Some members have           ‘Is there any way that the Pension   HM Revenue and Customs
contacted us to ask if we   Fund can arrange to have             does not allow the deduction
can take National           National Insurance Contributions     of National Insurance from a
Insurance contributions     deducted from the pensionable        registered pension, so we are
off their pension.          amount.’                             sorry we cannot do this.

The full results of the survey are available on our website at www.lpf.org.uk in the
‘pensioners’ section. We’ll be repeating the survey with a sample of pensioners next
year to make sure we are on track and that our service is improving. Thank you for
your input.

Abatement

It used to be the case that if you started working again for an employer which was
part of the Local Government Pension Scheme, your new pay plus your Lothian
Pension Fund pension could not be more than your pay when you first retired. This
meant that some re-employed retired members had their pensions reduced. This
policy was called ‘abatement’.

On 11 October, the Pensions and Trusts Committee of the City of Edinburgh Council
decided to end abatement. This means that retired members starting or continuing in
work after 11 October 2007 will not have their pension reduced. However, the
Committee has no discretion over the awarding of compensatory added years, which
may still be reduced.

We will be writing to all pensioners previously affected by abatement to let them
know of the change.

Nomination of a beneficiary

You can nominate someone to get a death grant if you die within five years of
retiring. This is in addition to a spouse’s, civil partner’s or dependants’ pensions.
Contact us if you would like to update your nomination form, or download one from
our website.

Annual Report 2006/07

The following information is a summary of our Annual Report and Accounts 2006/07.
You can download a full copy from our website, www.lpf.org.uk, or contact us to
request a printed copy.

Investment and accounts
Lothian Pension Fund’s investments increased 7.8% in 2006/07, which is 0.5% more
than it was aiming for. Over the last three years, the Fund has grown 15.1%. Over
ten years, it has grown 8.1%, significantly ahead of increases in inflation and average
earnings.

Over 2006/07, Lothian Pension Fund received £147 million in employee and
employer contributions and transfers in from other schemes. Its investments made
£197 million. It paid out £97.6 million in benefits and other expenditure.

Overall, at 31 March 2007 the Fund had £2,975.7 million, an increase of £246 million
over the year.
The Fund completed its move to a new investment benchmark – the split in different
types of investment that we aim for. The main changes were:

          10% reduction to the allocation of quoted equities (from 75% to 65%).
           Equities are stocks and shares.
          5% increase in alternative assets, including private equity, commodities and
           activism funds.

This chart shows the changes in the benchmark.


   40
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Within the allocation to equities, we have reduced our investments in UK equities in
favour of overseas equities. This will open up wider global markets where the
allocation between market sectors is different, and provide more opportunities to
invest in faster growing economies.

Other changes to the investment strategy include:

          2% increase in cash. This reflects the decision to manage the higher
           exposure to foreign currency risk as we increase the overseas equity
           allocation. The additional cash will act as a buffer for the active currency
           overlay mandates.
          2% increase to property to allow more opportunity to diversify into overseas
           property.

As the changes were significant, a transition manager was used to put the changes
in place over the year.

Independent advice

Lothian Pension Fund cannot give investment advice. You should consult an
independent financial adviser before making any major financial decisions. Find a
qualified adviser at www.mylocaladviser.co.uk or contact the Financial Services
Authority, tel: 020 7066 1000.

Our performance

In the 2006/07 financial year, 77.20% of key tasks were completed in target. Key
tasks include processing retirals and the payment of dependants’ benefits within five
working days. Key tasks not completed within target are treated as a priority.


                                                                Work Completed

                                  3000
                                  2500
                                  2000
             Task




                                                                                          Out Target
                                  1500
                                                                                          In Target
                                  1000
                                      500
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We monitor levels of telephone calls received and aim to answer them within seven
seconds. In the 2006/07 financial year we answered over 29,600 calls.
 Number of calls received




                                                        Calls answered within Target
                                  4000

                                  3000

                                  2000                                                 Out Target
                                                                                       In Target
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Complaints
In the 2006/07 financial year we responded to 21 complaints. This represents just
0.08% of tasks completed. All of these were resolved at the first level of the
complaints procedure. Most complaints relate to the statutory regulations we must
apply, rather than to the service we provide. We are working to publicise the
regulations clearly, so that members know what to expect.

Contact

Lothian Pension Fund
Waverley Court
Level 3/3
4 East Market Street
Edinburgh
EH8 8BG

Issue                        Contact                         Telephone          Email

How pension benefits are     Our pensions administration     0131               pensions@lpf.org.uk
calculated                   team                            529 4638



A change in your             Our pensions administration     0131               pensions@lpf.org.uk
circumstances – for          team                            529 4638
example to notify a
marriage or death


Your tax code, what          Payroll services                0131 529 4739      Bureau.services@
appears on your payslip or                                                      edinburgh.gov.uk
a change in address or
bank account
The National Fraud           Carole Thomson, Assistant       0131 529 4660      Carole.thomson@
Initiative                   Pensions Manager                                   edinburgh.gov.uk



This newsletter              Ruth Fry, Communications        0131               Ruth.fry@
                             Officer                         529 4510           edinburgh.gov.uk




Other formats

If you would like to receive Pension News in Braille, large print, computer formats or
a community language, please contact us.

				
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