What's New

Auto-Enrolment

Auto-enrolment is being introduced with effect frm 1 October 2012 and will mean workers being automatically enrolled into their employer's qualifying pension scheme without any active decision on their part. Employers will have a duty to maintain pension provision for workers who:

• are already members of the scheme;
• become members of the scheme;
• are aged between 22 and state pension age and earn above the income tax personal allowance (£7,475 in 11/12);

LGPS regulations, however, currently dictate that any employee under the age of 75 with a contract of employment of at least 3 months should be automatically admitted to the scheme with a right to opt out (and where that opt out occurs in the first three months a refund of contributions is paid). The issue of 'auto-enrolment' under the new over-riding legislation for members of the LGPS is that anyone who has opted out of the scheme will be auto-enrolled every three years and will have to opt out every three years if they wish to abstain from making scheme contributions. We anticipate amendments being made to LGPS regulations in due course to reflect the over-riding nature of the Government's legislation in the hope that it will be made absolutely clear as to which employees will have to be auto-enrolled and those, subject to age and earnings levels if any, that may not have to be auto-enrolled (so-called casual employees in particular).

The Pensions Advisory Service (TPAS) has an excellent section on its website which covers auto-enrolment.

http://www.pensionsadvisoryservice.org.uk/future-pension-reforms/auto-enrolment

It also covers the dates from which employers will be required to make provisions between October 2012 and October 2016 dependent upon their size.

Reductions in Full-time equivalent pay

We have produced a leaflet containing informaiton on how a reduction in a member's full-time equivalent pay can affect a member's pension benefits. This leaflet can be viewed here.

Employer Bulletin April 2011

The latest employer bulletin has been published and can be viewed here.

Government Tax Relief Announcement - changes to Annual Allowance and Lifetime Allowance

In the June 2010 budget, it was announced that the Government planned to consult on proposals to restrict pensions tax relief. The Government has now outlined its approach to restricting pensions tax relief and this was published on 14th October. The full document can be viewed by clicking on the following link:

http://www.hm-treasury.gov.uk/consult_pensionsrelief.htm

As a result of this review there are two main changes being introduced as follows:

• The Government has announced that from 6th April 2011, the Annual Allowance for 2011/2012 will be reduced from £255,000 to £50,000 and;

• From April 2012 the lifetime allowance will be reduced from £1.8 million to £1.5 million.

The tax changes have been summarised in a leaflet produced by the Berkshire Pension Fund entitled "Changes to Pension Tax Relief from 6th April 2011"

The Hutton Report - Final Report 10 March 2011

Lord Hutton of Furness has published his final report on public service pension provision in which he set out his recommendations to the Government on pension arrangements. The full report can be viewed here. A Frequently Asked Questions page has also been produced via the HM Treasury website and is available to view here. Further informaiton and related documents can be found on the Hutton Report section of this website.

New Contribution Bandings for 2011/2012

Latest Employer Bulletin released

New LGS1B leaflet to be used from 1st April 2011

The LGS1B leaflet has been updated with the new employee contribution rates from 1st April 2011. The LGS1B is to be included in all new contracts of employment issued to your non-teaching staff. Please use this new version for contracts commencing on or after 1st April 2011.

Briefing note issued for schools converting to Academy Status

The main provisions of the Academies Act 2010 came into force on 28th July 2010. Part 1 of Schedule 2 of the Administration Regulations is amended to allow a school which becomes an academy in accordance with the Academies Act 2010 to be a Scheme employer i.e. a scheduled employer. This means that any existing employee of the school who is a member of the LGPS remains a member of the Scheme from the point that the school is designated as an Academy.

From a practical point, any Academy will require their own employer rate to be calculated by the actuary. A briefing note for schools converting to Academies is available to download here.

Combining Previous Scheme Membership

The LGPS (Miscellaneous) Regulations 2010 were laid before parliament on 25 August 2010 and have come into force from 30 September 2010. The most notable amendment within these Miscellaneous Regulations relate to the combining of previous LGPS membership with the membership currently building up within the Royal County of Berkshire Pension Fund.

Combining LGPS benefits - new rules

Regulation 16 of the LGPS (Administration Regulations 2007 (as amended) has now been amended under the Miscellaneous regulations regarding combining periods of LGPS membership. If a member leaves the LGPS they are entitled to leave your benefits in the Scheme (known as deferred benefits). If they later re-join the LGPS with another Local Government employer, they may add their previous deferred benefits to the benefits building up in their new employment. This is known as combining benefits.

What are the current rules?

Before 1 October 2010, the ability to combine benefits was restricted in two ways:

• A decision to combine benefits had to be made within the first 12 months of returning to Local Government employment (or such longer period as the employing authority allowed); and

• If you had a deferred benefit held with more than one previous LGPS employer, you could only combine the most recent period of membership with your current membership.

What has changed?

• Under the revised regulations, existing active members will have until 30 September 2011 to combine any period of former Local Government membership with their current membership; and

• Members are now permitted provided that they elect to do so in the first 12 months of their new period of membership. Current active members have, until 30 September 2011 to aggregate membership.

A Frequently Asked Questions leaflet has been produced which contains further information regarding combining previous Local Government membership which can be downloaded here. Members to investgate a transfer of previous Local Government membership before 30th September 2011 must complete form LGS13A and return this to the Berkshire Pensions team.

Annual Report and Accounts 2009/10