The Local Government Superannuation (Amendment) Regulations 1993

Explanatory Note

(This note is not part of the Regulations)

These Regulations make a number of amendments to the Local Government Superannuation Regulations 1986.

The Regulations allow up to 25% of the value of a fund which falls within the Local Government Superannuation Scheme to be invested by means of a single contract in a managed fund with an insurance company or other similar body.

The Regulations also allow for a greater concentration of investments by allowing up to 10% of a fund to be invested in a single holding, and by allowing up to 25% of a fund to be invested in unit trusts managed by a single body. The former restriction will not apply where an investment is made by an independent fund manager in a single unit trust scheme.

These Regulations amend regulation P6 of the Local Government Superannuation Regulations 1986, which requires an administering authority to obtain a certificate from an actuary specifying the common rate of employer’s contribution to a superannuation fund. The amendment provides for the common rate to be set so as to ensure the fund’s solvency, rather than, as at present, so as to ensure that the fund is able to meet 75% of its existing and prospective liabilities. A change is also made to the criteria to be applied for assessing individual adjustments to the common rate.

Provision is made for a new method of calculating the standard rate of interest in place of the existing reference to a syndicated base rate. The latter no longer exists following the dissolution of the Committee of London and Scottish Bankers.