Sorry, I'm a bit confused. Does that mean that the pool is using a SMPPS system?
No, it doesn't use SMPPS.
Pool uses pure PPS. Pool doesn't pay for stales and orphans. Because we don't pay for orphans we must wait until block has certain amount of confirmations. 120 in case of LTC.
I still don't understand. In a pure PPS system, rewards must be completely independent of block finding, so it's not clear what you mean when you say that you "don't pay orphans".
How do you implement that? You link shares to a given block round and wait till the block is confirmed before paying the shares? So if the block gets orphaned you invalidate all the shares linked to that round?