The Local Government Pension Scheme (Amendment) Regulations 2018

• Citation: S.I. 2018/493
• Sections: 31

Section 1 Citation, commencement and extent

(1) These Regulations may be cited as the Local Government Pension Scheme (Amendment) Regulations 2018.

(2) These Regulations come into force on 14th May 2018 but the provisions listed in paragraph (3) have effect from 1st April 2014.

(3) The provisions are—

(a) regulations 5 to 8;

(b) regulations 10 and 11;

(c) regulation 14;

(d) regulation 15(b);

(e) regulations 16 and 17;

(f) regulation 20 apart from paragraph (b);

(g) regulation 21 apart from paragraph (b)(i);

(h) regulation 22;

(i) regulation 24(b);

(j) regulation 26;

(k) regulation 28.

(4) These Regulations extend to England and Wales.

Section 2 Amendment of the Local Government Pension Scheme Regulations 2013

The Local Government Pension Scheme Regulations 2013 are amended in accordance with regulations 3 to 22.

Section 3 Amendment of the Local Government Pension Scheme Regulations 2013

In regulation 2 (introductory) after paragraph (1) insert—

(1A) In these Regulations “local government service” means employment with a body specified in Part 1 of Schedule 2.

(1B) A person is deemed to be in local government service for the purpose of these Regulations—

(a) if that person is employed by a body specified in Part 2 of Schedule 2 and is designated, or belongs to a class of employees that is designated, by that body as being eligible for membership of the Scheme; or

(b) if that person is specified in column 1 of the table in Part 4 of Schedule 2.

(1C) The Scheme may potentially relate to a person employed by an admission body.

Section 4 Amendment of the Local Government Pension Scheme Regulations 2013

(1) In regulation 3 (active membership) for paragraph (1) substitute—

(1) Subject to regulation 4 (restriction on eligibility for active membership), a person is eligible to be an active member of the Scheme—

(a) if working in local government service; or

(b) if—

(i) by virtue of regulation 2(1C) (introductory: potential eligibility for membership) the Scheme may potentially relate to that person;

(ii) a determination under section 25(5) of the Public Service Pensions Act 2013 has been made in respect of that person; and

(iii) that person’s employer has designated that person, or a class of employees to which that person belongs, as being eligible for membership of the Scheme.

(2) After paragraph (1) insert—

(1A) The following functions are delegated to administering authorities—

(a) the function of making a determination under section 25(5) of the Public Service Pensions Act 2013 (“a determination”), in relation to persons of the description in regulation 2(1C); and

(b) the function of publishing a list under section 25(9) of that Act of the persons to whom the Scheme relates by virtue of a determination.

(3) In paragraph (2) for “by virtue of paragraph 1(d)” substitute “by virtue of regulation 2(1B)(b)”.

Section 5 Amendment of the Local Government Pension Scheme Regulations 2013

In regulation 10(5) (temporary reduction in contributions) at the end of sub-paragraph (a) for “and” substitute “or”.

Section 6 Amendment of the Local Government Pension Scheme Regulations 2013

In regulation 11(4) (contributions during absence from work) omit the words after sub-paragraph (c).

Section 7 Amendment of the Local Government Pension Scheme Regulations 2013

In regulation 21 (assumed pensionable pay)—

(a) in paragraph (4), for “Subject to paragraph (4A)” substitute “Subject to paragraphs (4A), and (5A) to (5C)”; and

(b) after paragraph (5) insert—

(5A) Where the pensionable pay received by a member during any period specified in paragraph (4)(a)(i) or (4)(b)(i) was, in the opinion of the Scheme employer, materially lower than the level of pensionable pay that member normally received, for the purposes of this regulation the Scheme employer may substitute for the pensionable pay the member received, a higher level of pensionable pay to reflect the level of pensionable pay that the member would normally have received.

(5B) In determining what the level of pensionable pay a member normally receives for the purposes of paragraph (5A) a Scheme employer must have regard to the level of pensionable pay received by the member in the previous 12 months.

(5C) Where any pensionable pay that has been received by a member includes fees of the kind listed in regulation 20(2)(j)(i) to (iv) (returning officer fees), for the purposes of paragraph (4)(a)(i) or (4)(b)(i) the annual rate of pensionable pay in respect of the fees in that employment that the member received is the annual average of the pensionable pay relating to those fees during the three years preceding the date the absence, the ill-health retirement or death occurred, or during the membership in that employment if less than three years.

Section 8 Amendment of the Local Government Pension Scheme Regulations 2013

In regulation 30 (retirement benefits)—

(a) in paragraph (7)(b) for “that employment” substitute “that active member’s pension account”;

(b) after paragraph (12) insert—

(12A) In this regulation references to an employee in local government service include—

(a) a person who satisfies the conditions in regulation 3(1)(b); and

(b) a person who has been a member of the Scheme in an employment and would be eligible for membership of the Scheme in that employment but whose active membership has ceased as a consequence of a notice served under regulation 5(2) in relation to that employment.

Section 9 Amendment of the Local Government Pension Scheme Regulations 2013

In regulation 33(2) (election for lump sum instead of pension) for “excluding” substitute “including”.

Section 10 Amendment of the Local Government Pension Scheme Regulations 2013

In regulations 47(4)(a), 48(4)(a), 48(5)(a), 48(9)(a) and 48(10)(a) (survivor benefits: partners and children of pensioner members) after the words “earned pension” insert “(including any amount added under regulations 39(1)(a) or 39(2)(a) (enhancement of member’s Tier 1 and Tier 2 benefits))”.

Section 11 Amendment of the Local Government Pension Scheme Regulations 2013

In regulation 50(2) (limit on total amount of benefits) for “or fixed protection” substitute “, fixed protection or individual protection”.

Section 12 Amendment of the Local Government Pension Scheme Regulations 2013

In regulation 51 (guaranteed minimum pension) at the end insert—

(9) In this regulation “local government service” includes employment in respect of which the member satisfies the conditions in regulation 3(1)(b).

Section 13 Amendment of the Local Government Pension Scheme Regulations 2013

In regulation 64 (special circumstances where revised actuarial valuations and certificates must be obtained)—

(a) in paragraph (1) at the end add “or entitled to receive an exit credit”;

(b) in paragraph (2)(b) after “exit payment due from the exiting employer” insert “or exit credit payable to the exiting employer”;

(c) after paragraph (2) insert—

(2ZA) If an exit credit is payable to an exiting employer, the appropriate administering authority must pay the amount payable to that employer within three months of the date on which that employer ceases to be a Scheme employer, or such longer time as the administering authority and the exiting employer may agree.

(2ZB) When an administering authority has paid an exit credit to an exiting employer, no further payments are due from that administering authority in respect of any surplus assets relating to the benefits in respect of any current or former employees of that employer as a result of these Regulations.

(d) in paragraph (8) after the definition of “exiting employer” insert—

“exit credit” means the amount required to be paid to the exiting employer by the administering authority to meet the excess of assets in the fund relating to that employer over the liabilities specified in paragraph (2).

Section 14 Amendment of the Local Government Pension Scheme Regulations 2013

In regulation 68(2) (employer’s further payments) for “regulation 30(6) (flexible retirement) or (7) (early leavers on grounds of redundancy or business efficiency)” substitute “regulation 30(5) (early retirement), (6) (flexible retirement) or (7) (early leavers on grounds of redundancy or business efficiency)”.

Section 15 Amendment of the Local Government Pension Scheme Regulations 2013

In regulation 96 (rights to payments out of pension fund) in paragraph (1)—

(a) for “Chapter 4 or 5 of Part 4” substitute “Chapters 1 or 2 of Part 4ZA ”; and

(b) after paragraph (1) insert—

(1A) Where a transfer under paragraph (1) is a Club Transfer, the administering authority must comply with the provisions in the Club Memorandum in relation to that transfer.

Section 16 Amendment of the Local Government Pension Scheme Regulations 2013

In regulation 100 (inward transfers of pension rights), at the end insert—

(8) Where a relevant transfer is a Club Transfer, the administering authority must comply with the provisions in the Club Memorandum in relation to that transfer.

Section 17 Amendment of the Local Government Pension Scheme Regulations 2013

In regulation 101 (effect of acceptance of transfer value) for paragraph (2) substitute—

(2) The appropriate amount of earned pension for the purposes of paragraph (1) is calculated—

(a) in the case of a Club Transfer, in accordance with the Club Memorandum; and

(b) in any other case in accordance with actuarial guidance issued by the Secretary of State.

Section 18 Amendment of the Local Government Pension Scheme Regulations 2013

In regulation 102 ( EU scheme transfers) in paragraph (3)—

(a) omit the word “and” at the end of paragraph (a);

(b) insert the word “and” at the end of paragraph (b); and

(c) at the end, insert—

(c) “local government service” includes employment in respect of which a person satisfies the conditions in regulation 3(1)(b).

Section 19 Amendment of the Local Government Pension Scheme Regulations 2013

In regulation 103 (changes of administering authority) in paragraph (7) after “local government service” insert “(including employment in respect of which the member satisfies the conditions in regulation 3(1)(b))”.

Section 20 Amendment of the Local Government Pension Scheme Regulations 2013

In Schedule 1 (interpretation)—

(a) after the definition of “children’s pension” insert—

“Club Memorandum” means—

in respect of a Club Transfer completed before 1st April 2015, the memorandum published by the Cabinet Office under the title “The Public Sector Transfer Club – memorandum by the Cabinet Office” effective from 1st March 2012;

in respect of a Club Transfer completed in the period from 1st April 2015 to 28th February 2017, the memorandum published by the Cabinet Office under the title “The Public Sector Transfer Club – memorandum by the Cabinet Office” effective from 1st April 2015;

in respect of a Club Transfer completed on or after 1st March 2017, the memorandum published by the Cabinet Office under the title “The Public Sector Transfer Club – memorandum by the Cabinet Office” effective from 1st March 2017 ;

“Club Transfer” means a transfer of employment between members of the Public Sector Transfer Club in respect of which an employee is entitled under the terms of the Club Memorandum to benefit from the terms of the Club Memorandum;

(b) for the definition of “local government service” substitute ““local government service” has the meaning given in regulation 2(1A)”;

(c) in the definition of “partner” omit “in relation to an active member”;

(d) after the definition of “permanently incapable” insert—

“Public Sector Transfer Club” means the arrangements approved by the Secretary of State and detailed in the Club Memorandum as providing reciprocal arrangements between the Scheme and other registered occupational pension schemes for making and receiving transfer value payments;

(e) for the definition of “revaluation adjustment” substitute—

“revaluation adjustment” means—

in the case of a balance transferred under a Club Transfer, the adjustment that would have applied to that balance if it had not been transferred; and

in any other case the percentage specified as the change in prices in the relevant Treasury order made under section 9(2) of the Public Service Pensions Act 2013 which is to be applied to a sum in a pension account at the beginning of the next scheme year.

(f) in the definition of “statutory pay” before “maternity” insert “sick,”.

Section 21 Amendment of the Local Government Pension Scheme Regulations 2013

In Schedule 2 (Scheme employers)—

(a) in Part 2, in paragraph 5, for “local authority” substitute “body”;

(b) In Part 3—

(i) omit paragraph 11; and

(ii) at the end add—

(14) An admission agreement may take effect on a date before the date on which it is executed.

Section 22 Amendment of the Local Government Pension Scheme Regulations 2013

In the table in Part 2 of Schedule 3 (pension funds), in the 7th row (relating to an employee of a Scheme employer listed in paragraphs 5 or 6 of Part 2 of Schedule 2), in column 2 omit the words “local authority or authorities, or”.

Section 23 Amendment of the Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014

The Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014 are amended in accordance with regulations 24 to 30.

Section 24 Amendment of the Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014

In regulation 3 (membership before 1st April 2014)—

(a) after paragraph (5) insert—

(5A) Notwithstanding paragraph (1)(a)—

(a) regulation D11(2)(d) and (4) of the 1995 Regulations (entitlement to deferred retirement benefits) has effect with the substitution of the references to age 60 with references to age 55;

(b) regulations 31(2) (other early leavers: deferred retirement benefits and elections for early payment) and 154(4) (payment of benefits: pension credit member) of the 1997 Regulations have effect with the substitution of the references to age 60 with references to age 55;

(c) regulations 30(2) and 30A(3) of the Benefits Regulations (requirements for member aged between 55 and 60 to obtain consent for early payment of pension) cease to have effect.

(b) after paragraph (6) insert—

(6A) Notwithstanding paragraph (1)(a), where deferred benefits are aggregated in accordance with paragraph (6), the normal pension age in relation to deferred benefits in respect of membership that ceased before 1st October 2006, is age 65

Section 25 Amendment of the Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014

In regulation 7 (qualifying service for the 2014 Scheme) after paragraph (5) insert—

(5A) In paragraph (5)(c) the reference to cessation of local government service includes—

(a) cessation of employment deemed by regulation 2(1B) of the 2013 Regulations (introductory) to be local government service; and

(b) cessation of employment in respect of which the member satisfies the conditions in regulation 3(1)(b) of the 2013 Regulations (active membership).

Section 26 Amendment of the Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014

In regulation 9 (transfers)—

(a) in paragraph (1)—

(i) omit “before 1st April 2015”; and

(ii) at the end add “since ceasing active membership in the scheme from which the transfer payment is received”;

(b) after paragraph (1) insert—

(1A) Regulation 4 (statutory underpin) applies to a person of the description in paragraph (1) as if that person had been an active member of the 2008 Scheme in respect of the service in the different public service pension scheme.

Section 27 Amendment of the Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014

In regulation 10 (interfund adjustments etc ) for paragraph (6) substitute—

(6) A member with deferred benefits relating to the Earlier Schemes, who did not become a member of the 2014 Scheme by virtue of regulation 5(1) of these Regulations (membership of the 2014 Scheme), but who subsequently becomes an active member of the 2014 Scheme may—

(a) within 12 months of the active member’s pension account being opened, or

(b) such longer time as the Scheme employer permits,

elect to receive a transfer value payment in relation to the deferred benefits to be credited to the active member’s account to purchase earned pension in accordance with actuarial guidance issued by the Secretary of State.

(6A) Where the appropriate administering authority in relation to the active member’s pension account mentioned in paragraph (6) (“the current authority”) is different to the administering authority which is the appropriate administering authority in relation to the deferred benefits (“the previous authority”), the previous authority must make the transfer value payment to the current authority.

Section 28 Amendment of the Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014

In regulation 14(2) (contributions) after “refund of contributions” insert “(including additional contributions)”.

Section 29 Amendment of the Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014

In regulation 15 (additional contributions)—

(a) omit paragraph (1)(b);

(b) for paragraph (1)(d) substitute—

(d) regulation 14 (election in respect of additional pension) and 14A (election to pay additional contributions: survivor benefits) of the Benefits Regulations and regulations 23, 24, 24A and 24B of the Administration Regulations (payment, discontinuance and use of additional contributions) as they apply to a member who has elected before 1st April 2014 to pay additional contributions under those regulations.

(c) after paragraph (2) insert—

(2A) Regulation 17 of the 2013 Regulations (additional voluntary contributions) applies to an AVC arrangement entered into before 1st April 2014 as it applies to an AVC arrangement entered into on or after that date save that—

(a) the normal pension age in an AVC arrangement entered into before 1st April 2014 is the normal retirement age under the 2008 Scheme; and

(b) regulation 66(8) of the 1997 Regulations (persons making elections in relation to AVCs prior to 13th November 2001) continues to have effect in relation to persons of the description in that regulation .

(d) omit paragraph (4);

(e) in paragraph (5) for “paragraph (4)” substitute “paragraph (2A)”.

Section 30 Amendment of the Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014

In Schedule 2 (rule of 85) —

(a) in paragraph 1(1)(a) after “Benefits Regulations” insert “if the member was aged 60 or over at the date of making the request”;

(b) after paragraph 1(1)(a) insert—

(aa) regulation 30(1) (choice of early payment of pension) or 30A (choice of payment of pension: pensioner member with deferred benefits) of the Benefits Regulations, if the member is aged 55 or over but aged under 60 at the date of making the request and the former Scheme employer or, where the former Scheme employer has ceased to be a Scheme employer, the administering authority, agrees that paragraph 1(3) of this Schedule should apply;

(c) in paragraph 1(1)(c) after “of the 2013 Regulations” insert “, or regulations 30(1) (choice of early pension) or 30A (choice of payment of pension: pensioner member with deferred benefits) of the Benefits Regulations,”;

(d) omit the word “or” preceding paragraph 1(1)(d) and after that paragraph insert—

(e) regulation 31(1) of the 1997 Regulations (other early leavers: deferred retirement benefits and elections for early payment) if the member was aged 60 or over at the date of making the request; or

(f) regulation 31(1) of the 1997 Regulations (other early leavers: deferred retirement benefits and elections for early payment) if the member is aged 55 or over but aged under 60 at the date of making the request and the former employing authority or, where the former employing authority has ceased to be a Scheme employer, the administering authority, agrees that paragraph 1(3) of this Schedule should apply.

(e) in paragraph 1(2), for “1(1)(c)” substitute “1(1)(aa), 1(1)(c) or 1(1)(f)”; and

(f) in paragraph 2(3)—

(i) omit “to the payment of benefits prior to age 60 in the circumstances described in paragraph 1(1)(a) of this Schedule, or”, and

(ii) for “1(1)(c)” substitute “1(1)(aa), 1(1)(c) or 1(1)(f)”.

Section 31 Transitional Provision

(1) Any admission agreement which subsists at the date this regulation comes into force remains in force and is treated as if it had been the subject of a determination under section 25(5) of the Public Service Pensions Act 2013 .

(2) Each administering authority must, within 12 months of the date this regulation comes into force, include in its list published under section 25(9) of the Public Service Pensions Act 2013, details of the persons included in admission agreements to which it is a party, to whom the Scheme relates by virtue of the provision in paragraph (1).

(3) In this regulation “admission agreement” and “administering authority” have the same meaning as in the Local Government Pension Scheme Regulations 2013.