The Local Government Pension Scheme Regulations 1995

Explanatory Note

(This Note is not part of the Regulations)

These regulations retitle and consolidate, with amendments, the provisions of the Local Government Superannuation Regulations 1986 (S.I. 1986/24), as amended (“the 1986 regulations”), which constitute the occupational pension scheme for persons engaged in local government employment other than teachers, policemen and firemen.

The main changes are as follows—

• a whole-time employee is defined as an employee whose contractual number of hours is not less than the number of hours stipulated as whole-time in his contract of employment. (Regulation B3(3)(b)). There are saving provisions in Schedule M4 in respect of service before the commencement of these regulations;

• regulation B3(4)(iii) deals specifically with employees who work only those hours they are directed to work by their employers and whose contractual hours consequently vary in a non-cyclical fashion; —scheme membership is automatic for—

  (a)

  all new entrants except casual employees, and

  (b)

  existing employees who become eligible because of these regulations coming into force, for example part-timers working less than 35 weeks a year,

  unless they opt not to join the Scheme (Regulation B10(2));

• casual employees, eligible employees of admitted bodies and re-entrants may join, but it is not automatic (Regulation B10(3) and, for re-entrants, also B13);

• the definition of “remuneration” included in regulation C2 has been revised and now includes any payment or benefit specified in an employee’s contract of employment as being a pensionable emolument;

• provision is made for part-time employees to purchase part-time added years. However, part-timers currently buying whole-time added years will continue to do so unless they elect under regulation C12(5) to change their original election (Regulation C12 and Schedule C6, paragraph 3(1));

• provision is made for a member of the Scheme who leaves employment by reason of redundancy or in the interests of the efficient exercise of his employer’s functions and who is offered compensation under regulation 9 of the Local Government (Compensation for Redundancy) Regulations 1994 (S.I. 1994/3025) to waive his right to the immediate payment of benefits (Regulation D6(2));

• provision is made to clarify the treatment of the enhancement of benefits on ill-health retirement for members with part-time service. The additional period to be awarded is determined by reference to the actual length of the person’s service and then proportionately reduced to its whole-time equivalent when calculating benefits. Similarly, in the case of a person whose service consists of a mixture of whole-time and part-time service, the additional period to be awarded is determined by reference to the actual length of the person’s service and then adjusted in accordance with the formula contained in paragraph 4(3) of Schedule D3, unless the person spent the last 13 years and 121 days in whole-time employment, in which case no adjustment is made (Regulation D7(2) and Schedule D3 paragraph 4(4));

• women retiring at age 60 with less than 25 years' service will no longer be required to receive immediate payment of scheme benefits although, like men, they may opt to do so (Regulations D9(2), D11(2)(d) and D17(3));

• Regulation E1 increases the death in service grant to two rather than one year’s pensionable remuneration;

• provision is made to allow a member’s pension, other than his guaranteed minimum pension, to be commuted on retirement and paid to him as a lump sum where the member is in exceptionally serious ill-health. The appropriate administering authority must be satisfied by medical evidence that the expectation of life at retirement is less than one year. Commutation does not affect any widow's, widower’s or children’s pension payable after the death of the member (Regulation H6);

• in the case of combined benefits coming into payment, the previous authority is able to discharge its liability to make continuing payments to the new authority by means of a single payment. (Regulation K26(4)(a)). Regulation K26(4)(b) deals with cases where the previous authority is already making continuing payments to the new authority;

• provision is made for a certificate of material reduction in remuneration to be issued to a member who is transferred to a different employment or to a different Scheme employer as a result of local government reorganisation (Schedule D1, paragraph 4(4));

• no provision corresponding to regulation E2(1)(d) of the 1986 regulations which allowed a person to receive a pension and lump sum retiring allowance on reaching state pensionable age has been included, but a saving is made for people who—

  (a)

  became entitled before the commencement date to a pension or retiring allowance under that regulation (whether or not it became payable before that date);

  (b)

  attain state pensionable age before the expiry of two years beginning with the commencement date; or

  (c)

  would have any rights in respect of any person falling within (a) or (b).

(Schedule M4, paragraph 9).