The Local Government Pension Scheme (Scotland) Regulations 1998

Transfer of sums from the pension fund to compensate for former member’s misconduct

115.—(1) This regulation applies where–

(a) a person has left an employment in which he was a member because of–

(i) an offence involving fraud, or

(ii) grave misconduct,

in connection with that employment;

(b) his former employing authority in that employment have suffered direct financial loss by reason of the offence or misconduct; and

(c) either–

(i) the former employee became entitled to benefits under Part II or the 1987 Regulations and a direction has been given under regulation 111(2), or

(ii) he did not become so entitled and on leaving the employment became entitled to a return of contributions under regulation 86 (whether or not he has waived his right).

(2) If the former employing authority are an administering authority, they may transfer an appropriate amount from their pension fund to the appropriate fund or account.

(3) Otherwise, the appropriate administering authority must pay the former employing authority an appropriate amount out of the pension fund, if requested to do so.

(4) However, if a payment in lieu of contributions is due or has been made in respect of the former employee, the administering authority may reduce a payment under paragraph (3) by half the amount of the payment in lieu of contributions.

(5) An appropriate amount is an amount not exceeding–

(a) the amount of the direct financial loss; or

(b) the amount of any contributions which could have been returned to the former employee, or paid to his spouse or a dependant, under regulation 87(2) above or regulation C12(5) of the 1987 Regulations, less the amount of any which have been so returned or paid,

whichever is the less.

(6) If after making a payment under paragraph (3) the appropriate administering authority are required to make any transfer payment under Chapter IV of Part IV of the Pension Schemes Act 1993 or under regulation 119 or to make a payment under regulation 126 for a former employee, the former employing authority must repay it, if requested to do so.