Policy Statements
There are a number of discretions available to employer's under the LGPS regulations, many of which require the employer to publish and maintain a statement of policy.
Regulations for which an employer must have a policy
An employer may resolve to increase the total membership of an employee at any time whilst he is an active member of the Scheme with them. The maximum additional membership period that can be awarded is 10 years.
The employer must pay to the Pension Fund, within one month from the date that any additional membership is awarded (or such longer period as agreed between the employer and the administering authority), a sum as calculated in accordance with guidance issued by the Government Actuary.
An employer may resolve to award an employee, at any time whilst he is an active member of the Scheme with them, additional pension of not more than £5,000 a year payable from the same date as his pension is payable under any provisions of the Local Government Pension Scheme Regulations.
Additional pension may be paid in addition to any increase of membership under regulation 12 of the LGPS (Benefits, Membership and Contributions) Regulations 2007 (as amended).
The employer must pay to the Pension Fund, within one month from the date that any additional membership is awarded (or such longer period as agreed between the employer and the administering authority), a sum as calculated in accordance with guidance issued by the Government Actuary.
A member who has attained the age of 55 and who, with his employer's consent, reduces the hours he works, or the grade in which he is employed, may make a request in writing to the appropriate administering authority to receive all or part of his benefits under the Regulations, and such benefits may, with the employer's consent, be paid to him notwithstanding that he has not retired from that employment.
If the payment of benefits takes effect before the member's 65th birthday they will be reduced in accordance with guidance issued by the Government Actuary unless the employer agrees to waive, in full or in part, any such reduction at their cost.
In the case of a person who was an active member on 31st March 2008, and who makes a request before 31st March 2010, substitute the age of 55 above with the age of 50.
Regulation 30 of the LGPS (Benefits, Membership and Contributions) Regulations 2007 - Choice of early payment of pension
If a member leaves a local government employment before he is entitled to the immediate payment of retirement benefits, once he has attained the age of 55 he may choose to receive payment of them immediately. A choice by a member aged less than 60 is ineffective without the consent of his employer or former employer and the employer must pay to the Pension Fund a sum representing the capital cost of releasing those benefits early.
His pension must be reduced by the amounts shown as appropriate in guidance issued by the Government Actuary although the employer may determine on compassionate grounds to waive the actuarial reduction.
In the case of a person who was an active member on 31st March 2008, and who makes a request before 31st March 2010, substitute the age of 55 above with the age of 50.
Other Regulations for which an employer may have a policy
Regulation 16 of the LGPS (Administration) Regulations 2008 - Re-employed and re-joining deferred members
Where a deferred member becomes an active member again before becoming entitled to the payment of those deferred retirement benefits, he may elect to have his former deferred membership aggregated with his current active membership on or after the date that he again becomes an active member. An election must be made within 12 months from the date that the member re-joins the Local Government Pension Scheme or such longer period as his employer may allow.
It is worth noting that if the member has more than one former period of deferred membership, it is only the most recent deferred membership period that can be aggregated with his current active membership unless earlier periods of deferred membership have already been aggregated with the most recent period of deferred membership.
Regulation 22 of the LGPS (Administration) Regulations 2008 - Applications to make absence contributions
This provides for a scheme member to pay optional contributions, for a period of unpaid absence from work, within 30 days of returning to, or of ceasing, employment. The employer can agree to extend this time limit.
Regulation 25 of the LGPS (Administration) Regulations 2008 - Additional Voluntary Contributions (AVCs) and Shared Cost Additional Voluntary Contributions (SCAVCs)
An active member may elect to pay AVCs into a scheme established under contract between his appropriate administering authority and a body approved for the purposes of the Finance Act 2004.
Under paragraph 3 of this regulation an employer can, at its discretion, contribute to the AVC scheme and where they do the AVC scheme is known as a shared cost additional voluntary contributions arrangement and contributions to it as SCAVCs.
Regulation 83 of the LGPS (Administration) Regulations 2008 - Inward transfers of pension rights
This provides that an active scheme member may elect to transfer into the Local Government Pension Scheme relevant pension rights held elsewhere. The member must request the transfer of such rights in writing within 12 months of becoming a member of the Local Government Pension Scheme or such longer period as the employer may allow.
Regulation 5 of the LGPS (Benefits, Membership and Contributions) Regulations 2007 - Contributions payable by active members
An active member shall make contributions to the Scheme at the contribution rate from his pensionable pay in each employment in which he is an active member. The contribution rate to be applied to his pensionable pay in any financial year (starting with 1st April 2008) is the rate determined by the employer to represent the assumed pensionable pay for the forthcoming year.
Where there is a material change to a member's pensionable pay in the course of a financial year, the employer may re-determine the contribution rate to be applied in his case.
Please find below a pro forma policy statement which can be used as a template for your own employer policies.
