Local Government Pension Scheme (Amendment No. 2 and Transitional Provisions) Regulations (Northern Ireland) 2002

Preliminary provisions

Citation, commencement and retrospection

1.—(1) These Regulations may be cited as the Local Government Pension Scheme (Amendment No. 2 and Transitional Provisions) Regulations (Northern Ireland) 2002 and shall come into operation on 1st February 2003 and except as provided for in paragraphs (2) and (3) shall have effect from that date.

(2) Paragraphs 3 and 4(a) of Schedule 3 shall have effect from and including 1st April 1998.

(3) Paragraphs 2 and 4(b) of Schedule 3 shall have effect from and including 15th December 1999.

Interpretation

2.—(1) In these Regulations–

“the 2002 provisions” means the 2002 Regulations, these Regulations and the Investment Regulations;

“the 2002 Regulations” means the Local Government Pension Scheme Regulations (Northern Ireland) 2002(1);

“the common provisions” means regulations 51 and 52 and Part IV of the 2002 Regulations and the Investment Regulations;

“the Investment Regulations” means the Local Government Pension Scheme (Management and Investment of Funds) Regulations (Northern Ireland) 2000(2);

“the old provisions” means the 2000 Regulations, the additional regulations specified in Schedule 1 (so far as they relate to the Scheme) and any other regulations relating to the Scheme and made under Article 9 or 14 of the Superannuation (Northern Ireland) Order 1972, so far as they continue in effect;

“the replaced provisions” means regulations C21, C26A, H1, H3 to H7, M2, M3, M4 and Parts J, K L, and N of and Schedules K1, K2, L1 and L2 to the 2000 Regulations;

“the saved provisions” means the old provisions (other than the replaced provisions), in so far as they remain capable of having effect and subject to the provisions of these Regulations and, in particular, the amendments specified in Schedules 3 and 4.

(2) For these Regulations, a member must be treated as remaining an active member throughout–

(a) a period of maternity absence;

(b) any period which is treated as membership by virtue of regulation B13(1)(b) of the 2000 Regulations (absence for illness or injury); and

(c) any period as respects which a notice under regulation C7(2) of those Regulations (trade disputes absence) has been given,

whether or not he or she otherwise would be so treated.

(3) Paragraph (2) shall not apply as respects any part of such a period which falls after a time when the member ceases to be an active member by virtue of regulation B11 of the 2000 Regulations (leaving the Scheme).

(4) Subject to the previous provisions of this regulation, expressions used in these Regulations and in the 2002 Regulations have the same meaning as in those Regulations.

(5) So far as is necessary for the purposes of regulation 1(2) and (3) these Regulations shall be deemed to have effect from and including 1st April 1998.

Application of 2002 Regulations and old provisions

Cessation of old provisions for active members

3.—(1) Any person who is an active member of the Scheme immediately before the commencement date shall continue to be an active member on that date and, subject to the provisions of these Regulations, the old provisions shall cease to apply to him.

(2) Paragraph (1) shall not apply to any person who ceases to be an active member on the day before the commencement date–

(a) by virtue of regulation B11 of the 2000 Regulations (leaving the Scheme); or

(b) by virtue of leaving local government employment on that date and becoming a pensioner member on the commencement date,

and these Regulations shall apply to any such person as if he had already so ceased immediately before the commencement date.

(3) If any person has notified his employer under regulation B11(2) of the 2000 Regulations before the commencement date that he wishes to cease to be an active member, but would not (apart from this paragraph) have ceased to be an active member immediately before the commencement date–

(a) paragraph (1) shall not apply to him;

(b) he shall cease to be such a member on the day before the commencement date; and

(c) these Regulations shall apply to him as if he had already so ceased immediately before the commencement date.

(4) Where (apart from these Regulations) a person away on relevant reserve forces service would be treated under the 2000 Regulations as an active member on the commencement date, paragraph (1) shall apply to him, unless as a result of a cancelling notice his relevant reserve forces service on and after the commencement date is not to be treated as such service.

(5) Where such a notice is served, these Regulations shall apply to such a person as if he had already ceased to be an active member immediately before the commencement date.

Deferred members and pensioners: general

4.—(1) Except where these Regulations provide otherwise, in relation to the persons specified in paragraph (2)–

(a) the saved provisions shall continue to apply;

(b) the common provisions shall apply; and

(c) Part II (except regulations 51 and 52) and Parts III and V of the 2002 Regulations shall not apply (except in so far as they affect the common provisions).

(2) Those persons are–

(a) any person who immediately before the commencement date was a deferred member or a pensioner member and does not on or after that date become an active member; or

(b) any person who is or may become entitled to any benefit under the Scheme in respect of such a person; or

(c) any other person whose entitlement to the payment of any pension or other benefit has arisen before that date or who may become so entitled by virtue of the death of any person who has died before that date.

Re-employment of members (Schedule D5 to the 2000 Regulations etc.)

5.  Schedule 2 shall have effect for the purpose of making provision concerning cases where members are re-employed and regulations 3(1) and 4 are subject to that Schedule.

Counting old membership of existing members under 2002 Regulations

Entitlement of active members to count old membership

6.  Any person who continues as an active member of the Scheme on the commencement date by virtue of regulation 3 may count for regulation 8(1)(d) of the 2002 Regulations the same length of membership as the total period he was entitled to count under the old provisions immediately before that date (but see regulations 8 to 11 and Schedule 2).

Entitlement of re-employed members to count old membership

7.—(1) Any member to whom regulation 3 does not apply who becomes an active member again on or after the commencement date may count for regulation 8(1)(d) of the 2002 Regulations the same length of membership as he would have been entitled to count for that regulation if regulation 6 had applied to him (but see Schedule 2).

(2) Where paragraph (1) applies to a member who is entitled to count a period of membership under regulation B13(1)(a) of the 2000 Regulations by virtue of regulation 9(5)(c) of these Regulations, for paragraph (1) the member shall be deemed to have been entitled to count that period immediately before the commencement date.

Membership before 1st April 1972

8.—(1) If immediately before the commencement date a member–

(a) was entitled to count a period of membership before 1st April 1972; and

(b) had not, being eligible to do so, made a relevant election; or

(c) having made such an election ceased to make payments under it,

for regulation 6 that period of membership or, as the case may be, the unpaid part of it must be reduced to 89 per cent. of its length.

(2) Paragraph (1) only applies to a female member if she duly elected under regulation E12(1)(b) or (2)(b) of the 1992 Regulations (election by wife of dependent and permanently incapacitated husband).

(3) A relevant election is an election wholly or partly in respect of membership before 1st April 1972, made or having effect as if made under regulation C13 of the 2000 Regulations or made under regulation C9 of the 1992 Regulations (payments to avoid reduction of retirement grant and death grant).

(4) Where a member to whom paragraph (1) would have applied if he had been married immediately before the commencement date marries on or after that date while he is an active member and before he becomes entitled to benefits under the Scheme, paragraph (1) shall apply to him as if he had been married immediately before that date.

(5) Despite anything in these Regulations, a relevant election under which payments were being made immediately before the commencement date shall continue to have effect on and after that date to the extent that it relates to a period of membership before 1st April 1972 (subject to the continuation of payments under it at the same rate as they were made before the commencement date) whether or not immediately before the commencement date the election also related to a later period.

(6) But if a member to whom paragraph (1) would have applied apart from his continuing to make payments under a relevant election until the commencement date (“a continuing member”), fails after that date to complete the payments due under that election in respect of membership before 1st April 1972 (otherwise than by virtue of his death or his becoming entitled to a retirement pension under regulation 29 of the 2002 Regulations), paragraph (1) shall apply to him as if he had so ceased before the commencement date.

(7) If a continuing member–

(a) completes the payments due under the election in respect that membership; or

(b) fails to complete them by virtue of his death or his becoming entitled to a retirement pension under regulation 29 of the 2002 Regulations,

for regulation 8(1)(d) of those Regulations he may count the full period of membership in relation to which he made the election.

(8) For paragraph (1) the unpaid part of the period is the part of it in respect of which payments (including payments by instalments of a lump sum) have not been made.

(9) Where paragraph (1) applies by virtue of paragraph (6) any payments made on or after the commencement date must be taken into account for paragraph (8).

Rights under old provisions affecting membership periods (extra payments, absences etc.)

9.—(1) Any notice given or having effect as if given or deemed to have been given under–

(a) regulation C5(3) or (4) of the 2000 Regulations (payments in respect of leave of absence);

(b) regulation C6(5) of those Regulations (payments in respect of maternity absence);

(c) regulation C7(2) of those Regulations (payments in respect of absence owing to trade dispute); or

(d) regulation C9 of those Regulations (payments to increase membership),

by a member to whom regulation 3(1) applies shall cease to have effect (but see regulation 12).

(2) Where a member to whom paragraph (1) applies has made any payment under regulation C5(3) or, as the case may be, regulation C6(4), C7(2) or C9(2) of the 2000 Regulations in pursuance of the notice, the Committee must calculate the period as respects which payment has been made.

(3) The Committee must notify the member of that period as soon as practicable after the commencement date.

(4) The period the member may count for regulation 8(1)(d) of the 2002 Regulations includes the period calculated under paragraph (2).

(5) Nothing in these Regulations affects–

(a) any right of any person who has ceased to be employed before the commencement date to give a notice under regulation C5(3) or C6(5) of the 2000 Regulations not later than 30 days after he ceased to be employed;

(b) any right of any person who has ceased to be employed before the commencement date (or his personal representatives) to give a notice under paragraph (2) of regulation C7 of the 2000 Regulations within the period mentioned in paragraph (4) of that regulation; or

(c) if such a person as is specified in sub-paragraph (a) or (b) makes a payment in pursuance of the notice, his right to count the period as respects which the payment is made under regulation B13(1)(a) of the 2000 Regulations.

(6) In the case of a notice served under regulation C7(2) of the 2000 Regulations where the member has died, references in this regulation to the member shall be taken where appropriate as references to the member’s personal representatives.

Rights under Schedule C5 to the 2000 Regulations: counting of membership

10.—(1) Where any member to whom regulation 3(1) applies has any rights to make any payments which remain payable immediately before the commencement date by virtue of paragraph 1(3) of Schedule C5 to the 2000 Regulations–

(a) those rights shall cease (but see regulation 13);

(b) the Committee must calculate the period as respects which payment has been made and notify the member of that period as soon as practicable after the commencement date; and

(c) the period the member may count for regulation 8(1)(d) of the 2002 Regulations includes the period so calculated.

(2) The period mentioned in paragraph (1)(c) is such period as the Committee determines to be appropriate.

(3) A period is only appropriate if the rights in respect of that period under the 2002 Regulations will be at least equal in value to the member’s rights in respect of the payments he has made under the old provisions.

(4) Where the Committee thinks fit, it must obtain the advice of an actuary appointed by it before making a determination under paragraph (2) and a statement as to the actuarial basis of that advice.

Augmentation

Duty of employing authority to increase total membership of members with membership before the commencement date

11.—(1) Where a relevant event occurs–

(a) in relation to a member who is entitled to count membership by virtue of regulation 6 or 7; or

(b) in relation to a member to whom paragraph 6(6) of Schedule 2 applies as respects a period of membership,

the relevant authority must determine whether his rights under the Scheme in respect of that membership are at least equal in value to the rights to which he was entitled immediately before the commencement date (“his 2000 rights”).

(2) If the relevant authority determines that a member’s 2000 rights were of a greater value than his rights under the Scheme in respect of the membership mentioned in paragraph (1), it must resolve to increase the member’s total membership for the 2002 Regulations by an additional period so that his rights under the Scheme in respect of the membership mentioned in paragraph (1) are at least equal in value to his 2000 rights.

(3) But if that additional period would exceed the period which would be the maximum addition under Schedule 4 to the 2002 Regulations if the resolution were made under regulation 55 of those Regulations–

(a) it must be reduced to the amount of the maximum addition; and

(b) the relevant authority must resolve that the appropriate multiplier for one or both of the purposes mentioned in regulation 19(2) and (3) of those Regulations (calculations of pensions and retirement grants) must be increased accordingly so that (taking the effects of the reduced additional period and the increase in any such multiplier together) his rights under the Scheme in respect of the membership mentioned in paragraph (1) are at least equal in value to his 2000 rights.

(4) Before–

(a) making a determination under paragraph (1); or

(b) determining the additional period under paragraph (2) or the increase in any appropriate multiplier under paragraph (3)(b),

the relevant authority must consider the advice of an actuary if it considers it appropriate.

(5) Where the relevant authority has passed a resolution under paragraph (2), the additional period counts as part of the member’s total period of membership for regulation 8(1)(d) of the 2002 Regulations.

(6) The relevant authority must give notice of the making of such a resolution to the member before the expiry of the period of six months beginning with the relevant date.

(7) The relevant authority is–

(a) in the case of a member who is an active member when the relevant event occurs, his employing authority; and

(b) otherwise, the Committee.

(8) A relevant event occurs in relation to a member if–

(a) he becomes immediately entitled to payment of a benefit under the 2002 Regulations or any other person whose entitlement is in respect of him becomes so entitled; or

(b) he applies under section 89A of the Pension Schemes (Northern Ireland) Act 1993(3) for a statement of entitlement; or

(c) he is provided with such information as is mentioned in regulation 122(3) of the 2002 Regulations (bulk transfers etc.).

(9) The relevant date is–

(a) in the case mentioned in paragraph (8)(a), the date on which the amount of the benefit is determined;

(b) in the case mentioned in paragraph (8)(b) or (c), the date on which the member’s membership ceases.

Special provisions about rights relating to old membership

Continuity of elections within regulation 9(1)

12.—(1) An active member who has given or is deemed to have given a notice which ceases to have effect under regulation 9(1) must be informed by the Committee in writing that it proposes to treat the notice–

(a) as having been given under the corresponding provision of the 2002 Regulations; but

(b) as if the notice related only–

(i) to so much of the amount remaining to be paid in pursuance of the notice as has not been paid before the commencement date, and

(ii) to so much of the period as respects which he gave the notice as he may not count by virtue of regulation 9(4); and

(c) as enabling the member to make additional contributions at the protected rate.

(2) Where a member is so informed, the notice is to be so treated as from the commencement date unless the member (or, in a case where the member has died, his personal representative) has informed the Committee in writing before the expiry of the period of three months beginning with that date (or such longer period as it may allow) that he does not wish it to be so treated.

(3) Any election by a member to whom regulation 3(1) applies which–

(a) was made or had effect as if made under regulation C24 of the 2000 Regulations (additional voluntary contributions); and

(b) was in effect immediately before the commencement date,

shall continue to have effect as if it had been made under the 2002 Regulations.

(4) The protected rate is the rate at which the member was making payments by virtue of the notice immediately before the commencement date, expressed as a percentage of his remuneration at that time.

Continuity of rights within regulation 10(1)

13.—(1) Regulation 12 applies in relation to a right which ceases to have effect under regulation 10(1)(a) as if–

(a) that right arose under a notice which ceases to have effect by virtue of regulation 9(1); and

(b) the corresponding provision of the 2002 Regulations was regulation 57,

(but see the following provisions).

(2) If the right arose under regulation 38 of the 1981 Regulations and immediately before the commencement date the member had the right to make any payments by lump sum payable by instalments, then for regulation 12 the protected rate is the rate at which he was paying instalments immediately before the commencement date, expressed as a percentage of his remuneration at that time.

(3) Regulation 57(5) of the 2002 Regulations does not apply where regulation 57 applies by virtue of paragraph (1), and instead the Committee must calculate the amounts of the additional contributions by reference to the preferential rate.

(4) The preferential rate is the rate at which the member was making payments (including payments by instalments of a lump sum) by virtue of paragraph 1(3) of Schedule C5 to the 2000 Regulations immediately before the commencement date, expressed as a percentage of his remuneration at that time.

Temporary right to pay off liabilities under regulation 13 by capital payment

14.—(1) A member to whom regulation 12 applies by virtue of regulation 13(1), may make an election to make a capital payment in full satisfaction of his liabilities in respect of any period for which he remains liable to make any payment by virtue of regulation 13(1).

(2) Such an election may only be made by notice in writing to the Committee before the end of the period of six months beginning with the commencement date.

(3) When the Committee receives such an election it must notify the member of the amount of the capital payment required.

(4) But if that capital payment, when aggregated with the member’s total contributions (as mentioned in regulation 15(2) of the 2002 Regulations) payable in the tax year in which he makes the election, would exceed the maximum amount so payable by him, such an election is ineffective.

(5) Where following a payment under such an election any body’s liabilities in respect of the member under regulation L6 of the 2000 Regulations continue by virtue of regulation 17(3), then, despite that regulation, he is entitled to count a period of membership of the same length as if all payments to be made in respect of that period under regulation L6 of the 2000 Regulations had been made.

Equivalent pension benefits

15.—(1) This paragraph applies where–

(a) when a member left his local government employment he was not entitled in relation to that employment to a retirement pension under regulation 26, 28, 29 or 33 of the 2002 Regulations (or any corresponding provision of any earlier Regulations) and he receives a return of contributions;

(b) the whole or some part of his period of membership was in service in a non-participating employment or in service which relates to employment with a non-local government employer in a non-participating employment;

(c) a period of his service in a non-participating employment came to an end by reason–

(i) of the repeal of section 55(1) of the National Insurance Act (Northern Ireland) 1966(4), or

(ii) of the provisions of regulation 2(2) of the National Insurance (Non-Participation Assurance of Equivalent Pension Benefits) Regulations (Northern Ireland) 1960(5) (as modified by regulation 10(2)(a) or (b) of the National Insurance (Non-participation Transitional Provisions) (Northern Ireland) Regulations 1975 (“the 1975 Regulations”))(6); and

(d) at some time during the settlement period (within the meaning of regulation 2 of the 1975 Regulations) he became, and has remained, assured of equivalent pension benefits.

(2) Where paragraph (1) applies, the member is entitled under the 2002 Regulations in relation to that employment to an annual retirement pension payable at the rate of the equivalent pension benefits applicable to him in respect of any period of membership–

(a) in service in a non-participating employment; or

(b) which relates to service with a non-local government employer in a non-participating employment.

(3) That pension is payable from the first date on which he–

(a) has attained state pensionable age; and

(b) is no longer in any local government employment.

(4) Where a pension is payable under paragraph (2) to a member who attains state pensionable age for a period of service in a non-participating employment, which counts for the purpose of calculating any benefits payable to the member (other than excepted service), no relevant provision shall apply so as to reduce the pension below the minimum rate of equivalent pension benefits applicable for that period of service under the Insurance Act.

(5) A relevant provision is a provision of the 2002 Regulations for the surrender, assignment, reduction, termination or suspension of a pension.

(6) Paragraph (4) does not apply to any relevant provision for the reduction, termination or suspension of a pension, which is used for a purpose prescribed by regulations made, or deemed to have been made, under section 56(1)(c) of the National Insurance Act (Northern Ireland) 1966 (equivalent pension benefits).

(7) For these Regulations and the 2002 Regulations, a member to whom paragraph (1) applies shall be treated as having ceased to hold the employment for which he receives a return of contributions on the day before the date of receipt.

(8) Entitlement to a pension under paragraph (2) must be disregarded–

(a) for regulations 19(4), (6) and (8), 31, 37(1), 41(5), 44, 47(5), 48(7) and 88(1)(a) of the 2002 Regulations; and

(b) for determining whether a person is at any time a pensioner member or a deferred member.

(9) For this regulation a member may count the excess period referred to in regulation 127(1) of the 2002 Regulations (service not matched by period credited on transfer into the Scheme).

(10) In this regulation–

• “non-participating employment” has the same meaning as in section 55 of the Insurance Act or the corresponding provision of the Great Britain Acts or the Isle of Man Act.

• “excepted service”, in relation to any person, is any earlier period of such service as is mentioned in paragraph (4), being service in respect of which–

  (a)

  a payment in lieu of contributions has been made; or

  (b)

  equivalent pension benefits satisfying the requirements of the Insurance Act have already been assured to him.

The fund and the Committee

The fund and the Committee

16.—(1) The fund for the old provisions immediately before the commencement date shall continue to be the fund for those provisions and shall be the fund for the 2002 Regulations.

(2) Without prejudice to paragraph (1), any liabilities under the old provisions, as they continue to apply by virtue of these Regulations, shall continue to be payable by the Committee from the fund as respects those liabilities immediately before that date.

(3) Where immediately before that date any body is or may become liable to make payments to the Committee or to the fund in respect of any liability arising under the old provisions in respect of any person, liabilities in respect of whom continue to arise on or after that date under those provisions, that body shall continue to be the body which is or may become so liable.

Continuation of employer’s liability for certain payments

17.—(1) Nothing in these Regulations affects the liability of any body to make payments under regulation L6 of the 2000 Regulations in respect of any member who continues as an active member on the commencement date by virtue of regulation 3(1).

(2) But if the member (or his personal representative) informs the Committee under regulation 12(2) (as applied by regulation 13(1)) that he does not wish a right which ceases to have effect under regulation 10(1)(a) to be treated as mentioned in regulation 12(1), regulation L6 of the 2000 Regulations shall cease to apply in relation to that member’s payments so far as they become due on or after the commencement date.

(3) Where, in a case in which payments continue to be made under regulation L6(1) of the 2000 Regulations by virtue of paragraph (1), following an election under regulation 14(1) a member makes a capital payment in full satisfaction of his liabilities in respect of any period, any liabilities which any body has in respect of him under that regulation are not affected.

Special Cases

Community scheme transferees

18.—(1) Community scheme transferees and their surviving spouses, dependants and children are entitled to such rights under the Scheme as are specified in guidance issued by the Government Actuary.

(2) A Community Scheme transferee is a person–

(a) who became employed by a Community institution after having been employed in local government employment;

(b) in respect of whom the scheme managers of the Communities' scheme were paid a transfer value under Chapter IV of Part IV of the Pension Schemes (Northern Ireland) Act 1993 or Part K of the 2000 Regulations or any corresponding earlier provisions; and

(c) in respect of whom the Committee has been repaid for the credit of the fund an amount which in accordance with that guidance may be treated as equivalent to that transfer value.

(3) The rights to which any person is entitled by virtue of guidance under this regulation must not be less valuable than those to which he would have been entitled if regulation K13 of the 2000 Regulations still applied to him.

Supplementary provisions

Cost of resolutions

19.  Any extra charge on the fund resulting from a resolution under these Regulations by an employing authority in relation to any member must be repaid to the fund by that authority.

Amendments to the Local Government Pension Scheme Regulations (Northern Ireland) 2000

20.  The 2000 Regulations shall be amended as provided by Schedule 3.

Minor and consequential amendments

21.  The provisions specified in Schedule 4 shall have effect with the amendments made by that Schedule.

Transitional and transitory provisions and savings

22.—(1) Schedule 5 shall have effect for the purpose of making transitional and transitory provisions and savings.

(2) Nothing in that Schedule affects the general operation of sections 28 and 29 of the Interpretation Act (Northern Ireland) 1954(7).

Revocations

23.  The replaced provisions are hereby revoked, but subject to the provisions of these Regulations and, in particular, Schedule 5.

Sealed with the Official Seal of the Department of the Environment on 19th November 2002.

L.S.

J. Ritchie

A senior officer of the

Department of the Environment