The Local Government Pension Scheme Regulations 1997

Explanatory Note

(This Note is not part of the Regulations)

These regulations replace the provisions of the Local Government Pension Scheme Regulations 1995 (S.I. 1995/1019) and constitute the occupational pension scheme for persons engaged in local government employment (other than teachers, policemen and firemen) who are active members of the Scheme on or after 1st April 1998, and replace them in part for other members in accordance with the Local Government Pension Scheme (Transitional Provisions) Regulations 1997 (S.I. 1997/1613).

The main changes are as follows—

Part II

• the restrictions on eligibility for membership have been simplified to exclude only those who have access to another occupational pension scheme or are part-time firemen from membership;

• regulation 12 sets a standardised contribution rate of 6 per cent. for all new members, while regulation 14 protects the position of existing members currently paying contributions at the rate of 5 per cent.;

• regulation 15 gives employers a new discretion to reduce or waive a member's contribution rate once 40 years of local government employment have been served;

• regulations 16, 24, 51 and Schedule 4 set out overriding Inland Revenue limits;

• regulations 21 to 23 define final pay and make provision for protecting the value of a member's pension following a change in the circumstances of employment;

• regulation 25 defines the normal retirement age for new members as 65 but protects the position of existing members who may retire between the ages of 60 and 65;

• regulation 31 gives members aged at least 50 the right to apply for early payment of scheme benefits (subject, in the case of members aged less than 60 to the consent of the employer);

• regulation 32 places the onus on a deferred member to elect to carry earlier periods of membership forward on rejoining the Scheme, enabling an election to be made at any time during the fresh spell of membership;

• regulation 38 provides for a grant on the death of active members of two years’ pay; for pensioners there is a standardised death grant of five times the annual pension;

• regulations 40 to 43 set out the arrangements for spouse’s pensions which are payable for the life of the beneficiary;

• regulations 44 to 48 provide a simplified structure for the payment of children’s pensions;

Part III

• regulation 52 gives employers a new discretionary power to augment scheme membership by up to 6 years on the termination of a member's employment;

• regulations 58 and 59 allow for the conversion of the retirement grant to pension or vice versa;

• regulations 60 to 66 set out a simplified structure for the payment of additional voluntary contributions and give the member the option to transfer the accumulated value of the contributions into additional scheme membership;

• regulations 67 to 72 allow employers to operate a shared-cost additional voluntary contributions scheme and give members the option to transfer the accumulated value of the contributions into additional scheme membership;

Part IV

• regulation 78 gives administering authorities the power to set revised contribution rates for employers with immediate effect where the costs to the fund exceed the assumptions stated in the rates and adjustment certificate which would otherwise determine these rates;

• regulation 82 gives administering authorities the power to charge interest where an authority is more than one month overdue in making certain payments;

• regulations 109 and 110 give administering authorities the discretion to decide their own abatement policy;

• regulations 116 to 120 apply the provisions in the Pension Schemes Act 1993 about transfers of rights out of occupational pension schemes with a few modifications and enable an alternative basis to be used for bulk transfers out;

• regulations 121 to 126 set out a simplified procedure for transferring rights into the Scheme, operating on a cash equivalent transfer basis, and provide for adjustments between funds where internal transfers occur;

• regulation 143 gives employers the discretion to convert awards made under the Local Government (Discretionary Payments) Regulations 1996 into Scheme membership.