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EMPLOYERS’
ADMINISTRATION MANUAL
LOCAL
GOVERNMENT
PENSION
SCHEME
Norfolk Pension Fund
Lawrence House
St Andrews Hill
NORWICH
NR2 1AD
September 2013
Check our website for the latest version of this Manual
www.norfolkpensionfund.org
You can print our standard forms from the website
Contents
Employers’ Administration Manual
Introduction
Page 5
Legal Background
Page 6
Membership Conditions
Page 7
New Employee : What You Need To Do
Page 8
New Scheme Member : What To Send Us
Page 9
Changes to be Notified to NPF
or Member Options Required During Membership
Page 12
Which form to use to tell us
Change of Name or Address
Change of Hours
Change of Contribution Rate (mid-year)
Unpaid Leave, Family Leave, Strikes
Reduction or Restriction in Rate of Pay
Page
Page
Page
Page
Page
Page
12
12
13
13
13
14
Member Contributions
Page 15
Employer Contributions
Page 17
Monthly Contribution Payovers
Page 18
Annual Contribution Returns
Page 19
Pensionable Pay : Contributions
Page 20
Absence or Leave from Duty
Page 21
Unpaid Leave (Authorised)
Unpaid Leave (Unauthorised)
Sick Leave
Maternity Leave
Jury Service
Absence on Strike
Reserve Forces Service Leave
Additional Contributions or AVCs during Unpaid Leave
Additional Member Contributions
Page
Page
Page
Page
Page
Page
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Page
21
21
21
22
23
23
23
23
Page 24
Page 3 of 46
Contents
Employers’ Administration Manual
Employee Opting Out
Page 26
Member Leaving, Retiring or Dying
Page 28
When a Member Leaves, Retires or Dies in Service
Ill-Health Retirement
Completing a Termination Form
Pensionable Pay : Benefits
Pensionable Pay Calculation Examples
Page
Page
Page
Page
Page
28
29
32
34
35
Employers’ Discretions
Page 38
Policy Statements
Page 38
Late Transfer Applications
Page 42
Dispute Procedure
Page 43
NPF Contact Details
Page 45
Stationery - Standard Forms and Guides
Page 46
Page 4 of 46
Introduction
Employers’ Administration Manual
This manual has been designed to help the employers in the Norfolk Pension Fund.
Norfolk County Council is the administering authority for the Norfolk Pension Fund
and so is responsible for managing the Local Government Pension Scheme (LGPS),
including the Fund’s investments, throughout Norfolk.
Employers have a statutory duty to provide prompt and accurate information to the
Norfolk Pension Fund so that it can meet its legal responsibilities.
Employers failing to do so may incur fines, interest and additional administration fees
as laid down by law.
It’s therefore very important that employers understand their responsibilities.
Our manual sets out to explain these and the processes you need to follow.
If you have any queries about them or about the LGPS in general, please ask us.
Norfolk Pension Fund, Lawrence House, St Andrews Hill, NORWICH, NR2 1AD
01603 495923
pensions@norfolk.gov.uk
www.norfolkpensionfund.org
Page 5 of 46
Legal Background
Employers’ Administration Manual
The detailed rules of the LGPS are set out in three sets of legislation :
The LGPS (Benefits, Membership & Contributions) Regulations 2007.
These are known as ‘the Benefits Regs’.
The LGPS (Administration) Regulations 2008.
These are known as ‘the Admin Regs’.
The LGPS (Transitional) Regulations 2008.
These are known as ‘the Transitional Regs’.
The LGPS is fully approved by the Inland Revenue.
Members' contributions qualify for full income tax relief on the ‘net pay system’.
You need to make sure your payroll provider knows how to operate this.
The LGPS is contracted-out of the State Second Pension (S2P).
Your payroll provider needs to be aware of this.
If you administer your own payroll, you’ll need to ask HM Revenue & Customs
(HMRC) for the contracted-out National Insurance tables (tables D & E) if you don’t
use them already.
The LGPS is a qualifying pension scheme under the automatic enrolment
provisions of the Pensions Act 2008.
You may occasionally be asked (mainly by HMRC) to quote an Employer's
Contracted-Out Number (ECON) or Scheme Contracted-Out Number (SCON).
The ECON is E3900002R and the SCON is S2700160F.
These numbers only apply to the LGPS.
Don’t use them for members of other pension schemes unless HMRC tells you to.
If you use Norfolk County Council’s payroll service, they’ll carry out many of the
processes set out in this manual for you.
Whoever administers your payroll, it’s your responsibility to make sure that
they know their responsibilities and carry them out promptly and correctly.
Page 6 of 46
Employers’ Administration Manual
New Employee : What You Need To Do
There are three main types of LGPS employer.
Different rules apply to each type as to which of their employees can join.
Scheduled Bodies
The County Council, District Councils, Broads Authority, Further and Higher
Education Colleges and all LEA and Foundation Schools are designated as
Scheduled Bodies (as they appear in a schedule in the scheme regulations).
Other than firefighters and teachers, all employees of these bodies are subject to the
Local Government Pension Scheme (LGPS). This is not discretionary.
The law says you must treat such staff in accordance with this guide.
Employees of Scheduled Bodies have the right to join the LGPS provided they meet
the entry requirements (see “General Requirements” below).
Designating Bodies (previously known as Resolution Bodies)
This mainly covers Town and Parish Councils and Internal Drainage Boards, though
companies run by Scheduled Bodies (e.g. Norse Commercial Services, NPS
Property Consultants) are also treated as Designating Bodies.
Employees of Designating Bodies have the right to join the LGPS if they are covered
by the employer’s published admission policy or (if there’s no admission policy) if the
employer designates them as a member. (See page 38 for employer policies).
Admitted Bodies
Employers associated with Local Government (Housing Associations, charities, etc)
can arrange a legal Admission Agreement with the Norfolk Pension Fund.
Sometimes such arrangements cover members who’ve been transferred to the
employer but not new employees – this is called a ‘closed scheme’.
Employees of an Admitted Body can join the LGPS if the Agreement allows it.
General Requirements
All new employees must have a contract of employment (or a series of contracts)
lasting for 3 months or more for automatic entry to the LGPS.
This includes casual staff; but only if they have a mutual obligation to work.
If an employee has fixed contract for less than three months then they can opt to
join.
If an employee has a contact of no mutual obligation, from 1 October 2012, they can
opt to join.
Page 7 of 46
Employers’ Administration Manual
New Employee : What You Need To Do
There’s no minimum age for entry to the LGPS.
The upper limit (for tax reasons) is two days before the member’s 75th birthday.
New Employees – (not fixed term less than 3 months)
New employees who meet the General Requirements on page 7 should have
contributions deducted from their pay from the date of appointment
•
Inform the employee on appointment that "your post entitles you to membership
of the Local Government Pension Scheme and you will be assumed to be a
member unless you specifically request otherwise; such requests will only be
accepted on the official Opt Out Form available from Norfolk Pension Fund’s
website www.norfolkpensionfund.org/actives or by contacting us directly.
Provided this form is completed and received back less than three months from
appointment, any contributions already deducted would be refunded through the
payroll."
•
Tell your payroll provider to collect contributions from the date of appointment.
Please make sure they deduct the correct rate of National Insurance (C, D or E).
•
Give the employee a New Member Pack which includes a scheme booklet.
The employee should complete the Membership Form (SR95) and return it to
you as soon as possible. Please chase them regularly if they don’t.
•
Complete a Notification of New Scheme Member Form (SR46) and send it to
us, together with the Membership Form. (See the next page for more details).
New Employees (fixed term less than 3 months)
If the employee is to be offered membership, you should give them the New
Member Pack. If they opt not to join, you don’t need to tell us. If they opt to join, you
should straight away:•
Tell your payroll provider to collect contributions from the date of appointment
(or from the next available payroll if the option was returned later).
Please make sure they deduct the correct rate of National Insurance (C, D or E).
•
Complete a Notification of New Scheme Member Form (SR46) and send it to
us, together with the Membership Form (SR95) – please complete the Section I
before sending to us.
Page 8 of 46
Employers’ Administration Manual
New Scheme Member : What To Send Us
When an employee joins the LGPS, please send us the following documents :
•
•
Notification of New Scheme Member form (SR46).
Notes to help you fill in this form are on the next two pages.
Membership Form (SR95) and any other forms from the New Member Pack
(e.g. Transfer Request Forms SR96, Expression of Wish forms the member has
completed)
•
A photocopy of the employee's Birth Certificate or Passport
•
Any documents about previous pension rights.
When we get these, we’ll set up an individual pension record for the new member.
Any delay in sending us these forms may affect the member's pension rights.
It’s your responsibility to make sure the member completes the Membership
Form. Please chase them regularly if it doesn’t come back to you promptly.
Statutory Notifications
Once our record has been set up, we’ll send the member a ‘statutory notification’
which shows the details held on our records.
If we don’t issue a Statutory Notification the details will be included on the member’s
Annual Benefit Statement.
Page 9 of 46
Employers’ Administration Manual
New Scheme Member : What To Send Us
Please complete and send us Form SR46 (Notification of New Scheme Member)
within 15 working days of an employee joining the LGPS.
Most items on it are self-explanatory but please take care with the following:
Employer Name
If the employer is part of a group, please be sure you fill in the right name.
Date of Birth
We do need to check dates of birth so we can be sure of members’ retirement dates
and pay them the right benefits.
Please send us form SR46 straight away. Don’t hold it up for the birth certificate.
If the birth certificate isn’t available, send it to us later.
If the member hasn’t got a birth certificate, we can accept a valid passport instead.
Date Became Pensionable Employee
A new employee should normally become a member immediately on appointment.
An existing employee who opts into the LGPS later should become a member from
the next available pay period.
Annual Pensionable Pay on Entry : Actual and WTE (Whole-Time Equivalent)
We use this figure to check that the pension contributions paid by the member in
their first year match the employment details we hold.
It’s also used in calculating any transfer credits from previous schemes.
It’s very important this figure is accurate. It should be calculated as shown below.
Salaried Staff
The annual rate of pay will be the salary as at joining the LGPS.
You should add an estimate of any pensionable extras the member is likely to get
(e.g. contractual overtime, enhanced hours, shift pay, sleeping-in allowance etc.).
Hourly Paid Staff
If the pensionable pay is the same every week, the annual rate of pay should be the
current weekly amount multiplied by 52.
If the pay varies every week (e.g. because of changing hours, variable bonus or shift
pay), please work out an average over a representative period and multiply it by 52.
Page 10 of 46
Employers’ Administration Manual
New Scheme Member : What To Send Us
Whole-time / Part-time Code
The hours shown on the form should only be contractual hours.
Other hours worked (e.g. non-contractual overtime) should not be included.
Code
W
Description
The member works whole-time.
What to put in ‘Hours Worked’ boxes
Leave the ‘hours worked’ boxes blank
Please fill in all three boxes
The member works part-time.
P
Member works less than full-time
or less than 52 weeks per year
(e.g. term-time school staff)
Actual hours
Enter the actual hours worked per week,
regardless of whether or not the
member works 52 weeks a year.
Average hours
If the member works 52 weeks a year,
this figure will be the same as ‘Actual’.
If they work for less than 52 weeks
(e.g. term-time staff), enter the weekly
average calculated over 52 weeks.
Whole-time hours
Enter the weekly hours a whole-time
member doing the same job would work.
Please fill in all three boxes
The member is employed on
a casual or irregular basis.
C
There are no fixed contractual
hours or the hours vary
from week to week.
Actual and Average hours
Put the same figure in both boxes.
This should be an estimate of the
weekly average contractual hours the
member will work in the current tax year.
We’ll ask you at the end of each tax year
to tell us the actual average for that year.
Whole-time hours
Enter the weekly hours a whole-time
member doing the same job would work.
Leave Blank
Variable-time
V
There is a set pay for the job
but no fixed contractual hours.
Examples include :
Acting Returning Officers
Parish Council Clerks without fixed hours
Page 11 of 46
Changes During Membership
Employers’ Administration Manual
We need to know straight away when any of the following things happen :
Notification of Changes Form A (form SR47A)
•
Change of Name
•
Change of Address
Notification of Changes Form B (form SR47B)
•
Change in Basic Contribution Rate
•
Family (Maternity or Adoption) leave
•
Unpaid Leave of Absence
Notification of Changes Form C (form SR47C)
•
Change in Contractual Hours
Notification of Absence Due to a Trade Dispute (form SR76)
•
Strike / Industrial Action (including options made by members).
Reduction or Restriction in Rate of Pay (form SR90)
•
This option form is to be completed by affected employees and
incorporates some guidance notes
Change of Name
Please tell us about all changes of name straight away so we can update the
member’s record. Attach a copy of the Marriage Certificate, Deed Poll or other
relevant document. A photocopy is acceptable provided you’ve checked the original.
Change of Address
Annual benefit statements, AVC statements and occasional scheme updates are
sent direct to home addresses so it’s important you keep us informed of moves.
Page 12 of 46
Employers’ Administration Manual
Changes During Membership
Change in Basic Contribution Rate
If you change a member’s basic contribution rate in mid-year (e.g. on promotion), we
need to know. Annual changes as at 1st April will be picked up from your returns.
Unpaid Leave of Absence, Maternity Leave, Adoption Leave and Strikes
These are dealt with under “Absence from Duty” below (see page 21).
Please tell us promptly about any relevant cases. If our records are out-of-date,
benefit estimates and annual benefit statements may be inaccurate.
Change of Hours
LGPS benefits are based on membership (i.e. service) and pay. The service side of
the equation is reduced in proportion for any periods of part-time employment. For
example, if a member working full-time (37 hours p.w.) drops to 18½ hours p.w.,
future service will only count at half (18½ / 37) of its calendar length.
We therefore need to know about all hours changes as soon as they happen.
Some members have no fixed contractual hours (e.g. those who work on an ‘as and
when’ basis). We deal with this by giving them an annual membership credit based
on the pensionable hours worked each year compared with the hours of a wholetimer. At the end of each financial year, you’ll need to complete the return showing
the average hours (including hours that would have been worked but for sickness,
etc) that year. It’s important you complete the annual return promptly as calculations
will be inaccurate until our records are up-to-date.
Please give details of previous hours as well as the change in hours. This will help
us check we’re holding correct details for your member.
Whole-time / Part-time Code
The hours shown on the form should only be contractual hours.
Other hours worked (e.g. non-contractual overtime) should not be included.
The codes are :
W
P
C
V
=
=
=
=
Whole-time
Part-time
Casual
Variable-time
Please see the table on page 11 for a more detailed explanation of these codes.
Page 13 of 46
Changes During Membership
Employers’ Administration Manual
Reduction (or Restriction) in Rate of Pay
As LGPS benefits are based on pay, these can be adversely affected if a
member’s pay rate is reduced or restricted. We need to know if a member
wishes to keep periods of membership separate in these circumstances.
You will need to give the member the SR90 form and notes so that they can
make the necessary option.
•
•
•
•
this includes ‘protected pay’ cases, where future pay rises are being restricted.
this includes cases where pensionable ‘extras’ are being lost.
(e.g. bonus, unsocial hours enhancements)
this does not include reductions in hours unless the hourly pay rate also falls.
this does not include returning to a lower salary from a temporary promotion.
A member whose pay is reduced or begins being restricted could opt for a separate
deferred benefit which would be protected against rises in the cost of living and then
start a new period of membership from the date of the change.
Before April 2008, if the pay reduction or restriction was compulsory, the employer
could give the member (and had to if they asked) a Certificate of Protection of
Pension Benefits. These can no longer be issued but existing ones are still valid.
These Certificates gave some benefit protection for up to thirteen years afterwards.
From April 2008, where a members pay rate has fallen, voluntarily or compulsory, in
one of the ways mentioned above, they will be able to opt when they retire for their
benefits to be based on an earlier year’s pay than the final one. They no longer
need a certificate.
These earlier years will all end on 31 March (i.e. in line with year-end payrolls).
The member will be able to go back for up to ten years.
You’ll need to keep detailed pay records covering the previous decade.
This protection would begin on the first day the pay reduction or restriction caused
the member’s pay packet, including any temporary protections, to be less than it
would otherwise have been.
Page 14 of 46
Member Contributions
Employers’ Administration Manual
Until April 2008, the contribution rate for most members was 6%, regardless of their
pay. There were protections for some manual workers, who continued to pay 5% if
they joined the scheme before April 1998.
An "Officer" was defined as "an employee whose duties are wholly or mainly
administrative, professional, technical or clerical".
This covered such posts as School Secretary; Bursar; Administrative and Clerical
staff; Welfare and Nursery Assistants; Librarian; Library Assistant; Laboratory,
Workshop and Visual Aids Technicians and Assistants.
A "Manual Worker" was defined very simply as "an employee who is not an Officer".
This covered such posts as Caretaking and Cleaning staff; Kitchen staff (including
Cook Supervisors); Grounds Maintenance staff; Swimming Pool Attendants.
From 1 April 2008, all members of the LGPS have paid contribution rates that
depend upon their band in the following table, according to their whole-time
equivalent pensionable pay at the date of joining or on 1 April each year.
The employer may adjust this during the year if there’s a substantial change to the
member’s contract : but doesn’t have to if they’d prefer to wait until April.
Employers need to show basic contributions separately from any additional
contributions on the monthly payover spreadsheet (form SR71); and for each
member separately on the year-end return (form SR56).
Contribution Bandings for 2013/14
Band
1
2
3
4
5
6
7
Range for 2012/13
£0 - £13,700
£13,701 - £16,100
£16,101 - £20,800
£20,801 - £34,700
£34,701 - £46,500
£46,501 - £87,100
More than £87,100
Contribution rate
5.5%
5.8%
5.9%
6.5%
6.8%
7.2%
7.5%
The pay ranges will be revised each April in line with inflation. We’ll tell you the new
ranges each year.
It’s your responsibility to make sure your payroll provider implements them
promptly.
Term-Timers
Staff who work term-time only should have their contribution band rate determined
by reference to their full equivalent term-time pay (not grossed up to 52 weeks pay).
Page 15 of 46
Member Contributions
Employers’ Administration Manual
Example : If whole-time is 37 hours a week, a member working 37 hours a week for
45 weeks a year earning £12,800 would be in Band 2 (5.8%).
A member working 32 hours a week for 52 weeks earning £12,800 would be in Band
3 (5.9%) as their whole-time equivalent pay would be £12,800 x 37 / 32 = £14,800.
Part-Timers
The contribution band for a part-time member is assessed with reference to their
whole-time equivalent pay. This ensures that, for example, a member with two halftime jobs, earning the same as a single whole-time member, pays the same
contribution rate.
For example, a whole-timer earning £28,000 a year would pay 6.5%.
A member holding two half-time posts, each pro-rata to £28,000 (i.e. £14,000) would
also pay 6.5%, in both jobs.
Multiple Jobs
If a member has more than one job, each job should be assessed separately to work
out which contribution band applies.
Irregular Pay or Fees
Members with fluctuating pay or enhancements (e.g. bonuses, enhanced hours) or
whose pay is based on fees will be difficult to place in the right band. However, to
ensure fairness, you need to make an estimate rather than just using basic pay.
Decisions
Employers are responsible for deciding which band applies to each member.
We’ll help you where we can, to ensure a consistent approach for all our members.
The employer must legally tell each member in writing which band they’ve been
allocated each year and tell them about the appeal procedure in case they disagree.
It’s also your responsibility to make sure the correct contribution rate is always
deducted from each scheme members’ pay.
We’ll tell you if any members opt to pay extra contributions.
It’s your responsibility to see that your payroll provider sets these up
correctly.
Page 16 of 46
Employer Contributions
Employers’ Administration Manual
Normal Employer Contributions
Employers contributions are expressed as percentage of members’ pensionable
pay.
The employer's contribution rate changes every three years following an actuarial
valuation of the Norfolk Pension Fund.
We’ll tell you the correct rate to use after each valuation.
You’ll get a copy of the actuary’s valuation report, which also shows it.
Valuations are due as at 31 March 2013 and every third year afterwards.
They usually take several months to complete.
Any contribution rate change takes effect from 1 April in the following year (so 2014,
2017, etc.). In exceptional circumstances, if the actuary considers it advisable, the
rate may be amended before the next valuation. We’d tell you if this happened.
Normal Employer Contributions – Deficit Payments
Following the 2010 Valuation existing employers may also be requested to pay a
cash sum each month in addition to the standard percentage. This is known as the
“Deficit” amount.
Additional Employer Contributions – Early Retirements
If you retired a member early (on redundancy or business efficiency grounds) or let
them draw their benefits before age 60 (voluntary or flexible retirement), it’s likely it
would place an additional ‘strain’ on the pension fund. Any ‘strain costs’ have to be
paid by the employer and we’d invoice you for them on an individual basis.
You should ask us for cost details before agreeing to any such retirement.
Page 17 of 46
Employers’ Administration Manual
Monthly Contribution Payovers
The total members' and employer's pension contributions should be paid over to us
each month, by BACS if at all possible.
Each month, you should send us the SR71 spreadsheet, showing the contribution
breakdown.
Each payment must legally reach us by the date shown on that month’s SR71.
We send the SR71 spreadsheet whenever a new employer joins the Scheme; and at
the start of each financial year for existing scheme employers.
SR71’s are ‘personalised’ for each employer with the details we need to allocate the
payment efficiently within the pension fund.
Page 18 of 46
Employers’ Administration Manual
Annual Contribution Returns
We need you to give us a detailed contribution return (form SR56) as at 31 March
each year, showing every member who paid pension contributions in the previous
year, including those who left or retired during it.
Any discrepancies between the annual totals on form SR56 and the aggregate of
your twelve monthly payovers (on SR71) need to be investigated and corrected.
A ‘personalised’ SR56 will be sent to you at the end of each financial year.
A member of our staff will be allocated to help you with any problems.
Form SR56 needs to be completed electronically.
If you need any training, please ask us.
Your form SR56 needs to reach us by 30 April each year; earlier if possible.
Late returns hold up our end-year processing for the whole pension fund.
This in turn delays our providing data to the scheme actuary and the production of
members’ annual benefit statements.
The law allows us to charge you for any additional administration costs this causes.
Returning Officers and Acting Returning Officers
This section only applies to the District, City and Borough Councils, who are
responsible for the Returning Officers and Acting Returning Officers for general,
local and European elections.
We need a standardised return for these members at the end of each financial year
so we can make sure our records are updated correctly.
We’ll send you a special return form for this (SR73) at the end of each financial year.
Page 19 of 46
Employers’ Administration Manual
Pensionable Pay : Contributions
The pay on which contributions should be deducted includes :
•
•
•
•
•
•
basic salary or wages
contractual overtime
bonus
qualification allowance
occupational and statutory sick pay
unsocial hours
Contributions should not be deducted on:
•
•
•
•
•
•
•
non-contractual overtime
reimbursement of expenses
pay in lieu of notice
pay in lieu of holiday
any amount representing the money value of providing a motor vehicle
any payment made under a School Achievement Award
any non-taxable payment
If you’re not sure how to treat any particular pay item, please contact us.
Page 20 of 46
Employers’ Administration Manual
Absence or Leave from Duty
Unpaid Leave (Authorised) including Paternity Leave
If a member takes unpaid leave of absence, contributions are compulsory for the first
30 days of each absence and if possible, should be collected in advance.
Contributions after the first 30 days are voluntary and it’s acceptable for them to be
collected in instalments when the member returns to work.
You should ask the member for a written decision either way by giving them the
Guide and Option to Pay Voluntary Contributions Form (SR91). A copy should be
sent to us when you tell us about the absence (on form SR47B).
Compulsory and voluntary contributions should be based on the pay the member
would have received but for the absence.
If the member pays voluntary contributions, employer’s contributions are also due,
based on the full pay that would have been received but for the absence.
Unpaid Absence (Unauthorised)
Any unpaid absence that wasn’t authorised by the employer doesn’t count in any
way for pension purposes and the member can’t cover it by voluntary contributions.
Please tell us about any period of unauthorised unpaid leave (on form SR47B).
Sick Leave
Any (authorised) absences due to sick leave count in full for pension purposes.
Contributions are payable on the pay actually received.
Members receiving less than full pay due to sickness pay contributions on the pay
received, but membership counts in full.
If the member is still employed but receiving no pay due to sickness then no
contributions are due, but the membership counts in full.
Page 21 of 46
Employers’ Administration Manual
Absence or Leave from Duty
Family Leave (e.g. Maternity Leave/Adoption Leave/Paternity Leave)
During 'ordinary maternity leave', i.e. the first 26 weeks, the member should pay
contributions based on whatever reduced pay they actually receive, including any
Statutory Maternity Pay (SMP) and Occupational Maternity Pay (OMP).
However, if at any time during those 26 weeks they're unpaid, they get the
membership as normal but don't have to pay a contribution.
Usually this wouldn't be a problem as SMP lasts for 39 weeks, regardless of any
occupational pay entitlement. However, some people don't qualify for SMP (e.g. if
they don't earn enough; or if they don't give the employer the required legal notice;
or if they were already pregnant when they took up their post).
Members in this position (nil pay at any time during the first 26 weeks of statutory
maternity leave) should not be offered the chance to pay voluntary contributions as
they don't need to. They get credited with LGPS membership regardless. So when
assessing voluntary maternity contributions, please check that you're not charging
for any period of unpaid 'ordinary maternity leave'.
Members who take 'additional maternity leave' (up to another 26 weeks after their
'ordinary maternity leave' expires) should pay contributions on whatever reduced pay
they actually receive; but if their pay runs out, they do have to pay voluntary
contributions if they want to count their membership. These should be based on the
pay rate received on the last day of paid maternity leave (e.g. SMP plus OMP).
It’s your responsibility to ask the member for a written decision either way by giving
them the Guide and Option to Pay Voluntary Contributions Form (SR91). A copy
should be sent to us when you tell us about the absence (on form SR47B).
If the member pays voluntary contributions, employer’s contributions are also due,
based on the full pay that would have been received but for the absence.
Adoption leave – contributions are payable in the same way as maternity leave.
Paternity leave – see Unpaid Leave.
Page 22 of 46
Employers’ Administration Manual
Absence or Leave from Duty
Jury Service
Unlike unpaid leave, pension contributions are compulsory for the whole period of
absence and should be based on the pay that the member would have received,
ignoring any deduction in respect of Jurors' Allowance.
There’s no need to tell us about jury service as there’ll be no break in membership.
Absence on Strike
Absence from duty due to industrial action doesn’t automatically count in the LGPS.
However, there’s an option for the member to pay to reinstate the strike period.
The payment is 16.00% of the pensionable pay the member would have received.
There’s no employer contribution.
Industrial action for less than one day doesn’t count as absence for LGPS purposes.
Please tell us about any member absent on industrial action (using the spreadsheet
form SR76).
It’s the employer’s responsibility to give members their strike contribution option.
See the separate guide for employers for more details and template letters and
forms for use.
Reserve Forces Service Leave
Where an armed forces reservist is called up, pension contributions must be
collected as normal if their reserve forces pay equals or is more than the pay they
would have received in their post with you.
If it’s more, contributions should be paid on the reserve forces pay and the service
will count as normal LGPS membership. You’ll need to arrange collection with the
member concerned and contributions should be paid over to us in the normal way.
If the reserve forces pay is less than the pay they would have received in their post
with you, the member is deemed to have paid their contributions so don’t collect any.
Additional Contributions or AVCs during Unpaid Leave
Any additional contributions members may be paying to buy additional membership
or pension must continue to be collected throughout any period of unpaid leave,
even if the member opts not to pay their normal contribution.
They should be based on the normal full pay the member would have received.
Additional Voluntary Contributions (AVCs) paid to Clerical Medical, Prudential or
Equitable Life should also continue to be deducted as normal unless the member
asks to reduce or suspend them (in which case, you should refer them to us).
Page 23 of 46
Employers’ Administration Manual
Additional Member Contributions
Members often ask about paying extra contributions to increase their LGPS benefits.
We’re happy to provide detailed quotations for this and members should be
encouraged to contact us to discuss the possibilities before committing themselves
to private arrangements elsewhere. Our extra contribution options all qualify for full
income tax relief and have very low charges or no charge at all.
There are three ways of improving benefits in the LGPS :
•
additional fixed contribution to buy additional pension
•
additional percentage contribution to buy additional service (closed to new options)
•
AVCs (Additional Voluntary Contributions)
These are explained below :
Buying Additional Pension
Members can opt to buy additional LGPS pension (in units of £250 p.a.) by paying a
fixed additional contribution. This would normally start on the next payroll after they
opted to do it and would run for a fixed number of years (chosen by the member).
We provide quotations to members on request.
We’ll tell you the additional amount to collect and when it should start and finish.
Please don’t accept instructions direct from the member.
Please deduct the extra contributions from the exact starting date we tell you,
backdated if need be, or arrange for your payroll provider to do so.
These contributions should be shown separately on year-end contribution returns.
Buying Additional Service
Before April 2008, members could opt to buy additional LGPS membership by
paying an additional percentage contribution, starting the birthday after their option
was made and ending on the birthday at or immediately before Normal Retirement
Date. Existing contracts remain in force but no new ones can be started.
These contributions should be shown separately on year-end contribution returns.
Unlike when paying AVCs (see next page) there’s no management charge for
buying pension or service.
Page 24 of 46
Additional Member Contributions
Employers’ Administration Manual
AVCs (Additional Voluntary Contributions)
The alternative to buying pension is to pay into the In-House AVC scheme, which is
an investment arrangement running in tandem with the main scheme. The Norfolk
Pension Fund has AVC arrangements with Clerical Medical, Prudential Assurance
and Equitable Life; though the Equitable Life option is closed to new AVC members.
All three companies provide a range of investment funds for members to choose
from. They do levy a management charge but it’s very low (usually between 0.5%
and 0.75%). We supply AVC information packs to members on request.
AVCs arranged privately (i.e. not through the LGPS) are called ‘Free Standing AVC
Schemes’ or FSAVCs. If you receive a letter from an insurance company telling you
that a member has taken out an FSAVC policy, please send it to us.
If one of your members opts to start an In-House AVC, we’ll tell you what to do.
The AVC deduction should be shown separately on payslips and you should send us
a separate return of members’ AVCs at the end of each financial year.
We’d tell you how to make any monthly AVC payovers, which should be sent direct
to the insurance companies, not to us at NPF. AVCs must legally reach the AVC
company by the 19th of the month following the one in which they were deducted.
Please try to make your payover much more promptly than that as members won’t
get any return on their investment until the AVC companies receive the money.
AVC payovers should be sent with a simple remittance sheet on the lines of the
specimen below. Your own format is acceptable provided all five sets of information
are included. Please don’t leave out the National Insurance Number as this is also
the AVC membership number. All three AVC companies accept electronic
payments and remittance sheets but may insist on their own standard format.
Annual AVC statements, prepared by the insurance companies, will be sent direct to
AVC members after the end of each financial year, usually in May or June.
Specimen AVC remittance sheet :
Employer’s Name
AVC Remittance for Pay Period Ending : 31 October 2009
Name
NI No
Payroll Ref
AVC Amount
ADAMS, J
AA123456B
123456
£450.00
JONES, D J
BB456123C
654321
£200.00
SMITH, A
CC554433D
447788
£ 10.00
-----------------£660.00
------------------
Total AVCs paid to Insurance Company
Page 25 of 46
Date Left
16/10/09
Employee Opting Out
Employers’ Administration Manual
Membership of the LGPS is not compulsory. However, all eligible employees must
be treated as members unless they opt in writing on the official Opt Out Form
(SR97) not to be.
It’s up to you as employer to deal with any options out. The processes and legal
requirements are explained on these two pages. If you don’t process your own
payroll, make sure your provider knows what they need to do.
If you receive the Opt Out Form before they’ve been in post for three months, they
should be treated as never having been a member (see below).
It’s therefore vital that you let new employees know that the Opt Out Form is
available from our website www.norfolkpensionfund.org.uk (or by writing to us or by
telephone on our normal enquiry number (see page 45).
Employees whose option opt out is received three months or more after joining must
be treated as having been members until the option takes effect (see next page).
Employee Opting Out Less Than 3 Months After Joining
• Please complete Employer Notification of Employee Opting Out Form (SR88)
and send it to us with the employee’s Opt Out Form.
• As you’ve received the option out less than three months after starting, the law
says the employee is treated as never having joined. You should therefore refund
any contributions already collected through the next available payroll, including
any that relate to a previous financial year. You should also retrospectively adjust
the national insurance from Table D or E back to Table A or B.
• If the refund period crosses a financial year-end, you should correct the previous
year’s national insurance on the new year’s payroll. HMRC permits this provided
it’s done before the end of the tax-year following the one the adjustment relates
to. Any underpayment not collected by then must be ‘stood’ by the employer.
Arrears collected in any pay period must not exceed the NI that would have been
paid anyway (i.e. a maximum overall deduction of twice the normal NI).
• Any employee’s and employer's pension contributions already paid over to us
should be set against your next monthly payover.
Page 26 of 46
Employee Opting Out
Employers’ Administration Manual
Member Opting Out 3 Months or More After Joining the LGPS
• Members wanting to opt out of the LGPS should visit our website for an Opt Out
Form (SR97). (or by writing to us or by telephone on our normal enquiry number
(see page 45).
• The complete form should be returned to you as employer.
• Any forms returned to us in error will be forwarded to you to be processed.
• Don’t stop collecting contributions unless and until you receive an official Opt Out
Form
• If you receive the form three months or more after starting, the option out cannot
legally be backdated.
• You should stop collecting LGPS contributions from the next available payroll; but
you should not refund any contributions already collected.
• You should adjust the National Insurance from Table D or E back to Table A or B.
Once again, this should not be backdated.
• Complete a termination form (L28) in the same way as you would for a member
leaving (see the next section, ‘Member Leaving, Retiring or Dying’).
• The date of termination (of LGPS membership) is the last day of the pay period
before the one in which you stop collecting contributions. So if you stop the
contributions on the August payroll, the LGPS termination date is 31 July.
• Complete Employer Notification of Employee Opting Out Form (SR88) and
send it to us with the employee’s Opt Out Form (SR97) and Termination Form
(L28). Please send them together.
• If you haven’ already sent us the Notification of New Scheme Member Form
(SR46) (see page 8) please attach that too.
• We’ll then tell the member about their deferred benefit entitlement for their
membership up to the termination date.
• A member who opts out is allowed to opt back in at any time.
Page 27 of 46
Employers’ Administration Manual
Member Leaving, Retiring or Dying
When a Member Leaves, Retires or Dies in Service
•
We need to know straight away when a member leaves, retires or dies.
•
Please tell us on the standard Termination Form (form L28).
•
See page 32 for details of how to complete the termination form.
•
Please tell us about retirements well in advance wherever possible. This
allows us to update our records and sort out paperwork with the member without
having to wait until you have all the details needed to complete a full termination
form. As a result, we can pay members’ benefits more promptly.
Please use form R25 (Early Notification of Member Retiring). If you prefer to use
a letter or an alternative format, please include the date and type of retirement
and the member’s home address and NI number.
Please follow this up with the standard termination form (L28) as soon as all the
pay and other details are available. We can’t calculate the member’s benefits
without this. Fax copies are welcome as they too help us process members’
benefits more quickly (our fax number is 01603 495795).
•
If a retirement is an ‘early retirement’ (i.e. it’s on the grounds of redundancy,
efficiency or employer’s consent), form R16 (Early Retirement Authorisation
Form) should always be sent to us with your termination form.
•
If a retirement is on ill-health grounds, form R16 may sometimes be needed: but
only if you intend to award any augmented membership or pension at your own
expense as employer (i.e. over and above any membership enhancement that
the LGPS would give anyway).
The ill-health retirement process is explained on the next two pages, together
with details of the ill-health forms you need to send us with your termination form.
Page 28 of 46
Ill-Health Retirement
Employers’ Administration Manual
Ill-Health Retirement : How It Works
A member can be retired on ill-health grounds if they’re medically certified as being
‘permanently incapable of discharging efficiently the duties of his or her current employment’.
The LGPS provides three levels of ill-health retirement benefit, depending on how likely it is
that the member will be able to find work again before retirement age.
There’s no lower age limit. First and second tier pensions are paid for life. A third tier
pension is payable for a maximum of three years and must be reviewed after 18 months.
When it ends, it becomes a suspended pension and is reinstated at normal retirement date
unless the member successfully applies to reinstate their pension on the grounds of
becoming permanently incapable of undertaking gainful employment.
The employer decides if a member qualifies for ill-health retirement and if so, which tier;
but must have regard to the advice of a doctor qualified in occupational health medicine.
The doctor used must be an independent registered medical practitioner, qualified in
occupational health medicine (as defined in the LGPS) and approved by the Norfolk Pension
Fund.
The Three Tiers of Ill-Health Retirement
•
First Tier
This tier applies to the more serious cases of ill health, where the member has little prospect
of being capable of undertaking gainful employment before age 65. Immediate benefits
would be payable. In calculating them, the member’s scheme membership would be made
up to age 65.
•
Second Tier
This tier applies to members who have little prospect of being capable of undertaking gainful
employment within the next three years but are likely to be able to do so before age 65.
Immediate benefits would be payable. In calculating them, the member’s scheme
membership would be made up by 25% of their remaining service to age 65.
•
Third Tier
This tier applies to members who have little prospect of being capable of undertaking gainful
employment straight away but are likely to be able to do so within the next three years.
Immediate benefits would be payable but there would be no award of extra membership.
You should allocate the member to one of these three tiers, depending on their likely
capability of being capable of undertaking gainful employment. Your decision should be
made only on medical considerations, based on a doctor’s certificate. Economic
considerations (e.g. the local availability of work) should not be taken into account by the
employer or the doctor.
Gainful employment means paid employment for at least 30 hours a week for at least a year.
Page 29 of 46
Ill-Health Retirement
Employers’ Administration Manual
Ill- Health Retirement for Active Members: What You Need To Do
If a potential ill-health retirement arises, please follow the flow chart below as a
guide to the Ill Health process.
Members with a deferred benefit within the LGPS, can also apply for benefits to be released
early on ill health grounds. Benefits are paid based on the member’s scheme membership
only. The forms required in such cases are; R53 Early Payment of Deferred Benefit
Employer Decision Notice and R18 (DB) Ill Health Retirement Certificate for Early Payment
of Deferred Benefit.
Page 30 of 46
Employers’ Administration Manual
Completing a Termination Form
A completed Termination Form (L28) should be sent to us straight away when a
member leaves. We can’t process their benefits or give them their options without it.
Those employers whose payroll is administered by Norfolk County Council
should complete the front of the form and the signature box on the back. The two
remaining sections, ‘Pensionable Pay’ and ‘Employee Pension Contributions and
Contracted-Out Earnings’, will be dealt with for you by NCC’s payroll staff.
All other employers (or their payroll provider if authorised to do so on their behalf)
should complete the termination form in full.
Many items on the form are self-explanatory; the rest are explained below:
•
Termination Date should be the last day of LGPS membership.
•
Reason for Termination (please use the appropriate code from the list given)
•
Ill Health Retirements
Please see the previous two pages for details of the two forms you need to send us
with your termination form. We can’t pay any ill-health benefits without these.
•
•
•
Retirement on Redundancy or Efficiency Grounds
Voluntary Early Retirement (below age 60 with employer’s consent)
Flexible Retirement (with employer’s consent)
For these three, please send an authorisation form (R16) with the termination form.
We can’t pay any benefits without one.
For flexible retirements, please also send a new member form for the ‘new’ post.
There may well be a cost to the employer for releasing the benefits early :
You should ask us for figures before agreeing to these three types of retirement.
The minimum age for these three retirement types is 55
•
Death in Service
Please put the next-of-kin details in the ‘address after leaving’ box.
•
Other Voluntary Leavers
The range of V codes should be used when a member under 60 resigns voluntarily.
•
Maternity is covered under the Absence From Duty section above.
•
Opted Out is covered under the Opting Out section above.
Page 31 of 46
Employers’ Administration Manual
•
Completing a Termination Form
Pay Award Outstanding
Delete ‘Yes’ or ‘No’ to show whether a pay award is outstanding that may affect the
pensionable pay figures. When the award is eventually paid, pension contributions
should normally* be deducted from the arrears at the member’s usual rate. Please
then complete form L1 to tell us about the additional pensionable pay and pension
contributions. We will use this to recalculate the members’ benefits.
*Pension contributions should not be deducted from the pay award arrears if the
member has taken a refund of contributions. Please check with us if you’re not sure.
This could only affect a member with less than three months calendar membership.
NI contributions are payable at the non-contracted-out rate (A or B) if payment is
made more than six weeks after the termination date (see HMRC NI manual).
•
Service to be Augmented
Delete ‘Yes’ or ‘No’ to show whether you intend to award any augmented service.
This would be entirely at the employer’s cost: so get a quote from us first.
•
Annual Remuneration
This should be the rate of pensionable pay in force on the last day of pension
scheme membership (not the final year’s pay, which is covered later). It should be
calculated on the same lines as ‘Annual Pensionable Pay on Entry’ (see the ‘New
Scheme Member’ section above).
•
Employee Pension Contributions and Contracted-Out Earnings
Please enter the total amount of employee's pension contributions paid by the
member during the current and previous tax years.
In the final column, please enter the employee’s contracted-out earnings between
the lower earnings limit (LEL) and the upper accrual point (UAP) for the same two
tax years. This includes any married women or widows still paying reduced-rate
(Table E) national insurance. The figure needed is the cumulative total of columns
1b and 1c on HMRC deductions sheet P11 (or your equivalent).
If a member has earnings under both Table E and Table D, show them separately.
Late payments are sometimes made in the financial year after leaving. In these
cases, please also complete the third row of this box.
Page 32 of 46
Pensionable Pay : Benefits
Employers’ Administration Manual
LGPS benefits are based on pensionable pay.
It’s therefore important that the figures you enter on the termination form have been
calculated thoroughly and accurately. Estimates will not do.
Please enter the total pensionable pay earned by the member during the exact
twelve months up to the termination date; and during the two previous years.
If you issued a Certificate of Protection of Pension Benefits for a drop in pay that
took place before 1 April 2008, please also give us figures on a year-by-year basis
for the ten years ending on the anniversary of leaving prior to the normal three.
Members whose pay rate has fallen since 1 April 2008 will also be able to opt for
their benefits to be based on an earlier year’s pay than the final one. These earlier
years will end on 31 March and the member will be able to go back for up to ten
years. You’ll need to keep detailed pay records covering the previous decade.
Please enter the exact final three years and then the ten historic financial years.
Please pay particular attention to the following points in assessing pensionable pay:
•
Make your calculation to the nearest day (e.g. the exact year from 11 June 2008
to 10 June 2009). Pay periods should be split manually as necessary.
•
Exclude any payments made during the relevant period that were earned before
it began (e.g. a member paid in arrears or a pay award implemented late).
•
Use the separate column for any pay lost through sickness, maternity or
adoption leave (or through unpaid leave of absence if pension contributions have
been paid) as this will be added back in for calculating benefits.
•
Use the separate column for any emoluments on which pension contributions
have been paid (e.g. the value of free or subsidised accommodation).
•
Only pensionable pay received or lost through sickness, etc. should be included.
Non-pensionable pay (e.g. non-contractual overtime) should be excluded.
•
Payments in lieu of holiday or notice are non-pensionable so should be excluded.
•
Please split pensionable pay periods at each change of hours (if any) so that we
can calculate accurate whole-time equivalent figures.
It’s important you tell us about significant changes in the member’s contract of
employment (see the Section above on Changes).
Please contact us if you have any problems filling in the pensionable pay box.
Examples of pensionable pay calculations are shown on the next three pages.
Page 33 of 46
Pensionable Pay Calculation Examples
Employers’ Administration Manual
Pensionable Pay Calculations: Example 1: Sick Leave
This calculation is for illustration purposes only and ignores any adjustments that
might be needed to take account of statutory sick pay or social security benefits.
A whole-time manual worker retires on 23 March 2009 on the grounds of permanent
ill health. His pay record for the last year was as follows:24.3.08 to 21.4.08:
22.4.08 to 12.8.97:
13.8.08 to 2.12.08:
3.12.08 to 10.2.09:
11.2.09 to 23.3.09:
Normal hours worked
Sick leave on full pay
Sick leave on half pay
Sick leave on no pay
Sick leave on full notice pay
Weekly Rates of Pay:
Basic wage as at 24.3.08 :
£298.00 per week
Average bonus up to 23.4.08 : £ 59.60 per week
Basic wage from 1.7.08:
£307.00 per week
Notional average bonus from 1.7.08 : [£59.60 x £307 ÷ £298] = £61.40 per week
Pensionable Pay 24.3.08 to 23.3.09
£
Period 24.3.08 to 21.4.08 (4 weeks 1 day)
Basic Pay 4.2 x 298.00
Bonus 4.2 x 59.60
1,251.60
250.32
Period 22.4.08 to 30.6.08 (10 weeks)
Basic Pay 10 x £298.00
Bonus 10 x £59.60
2,980.00
596.00
Period 1.7.08 to 23.3.09 (38 weeks)
Basic Pay 38 x £307.00
Bonus 38 x £61.40
Total pensionable pay
11,666.00
2,333.20
-----------19,077.12
------------
In other words, you should calculate (as near as possible) the pensionable pay the
member would have earned if they hadn’t lost any pay to sickness.
The figure for the Annual Remuneration box on the termination form should be
calculated as : [£307.00 + £61.40 =] 368.40 x 52 = £19,156.80.
Page 34 of 46
Pensionable Pay Calculation Examples
Employers’ Administration Manual
Pensionable Pay Calculations : Example 2 : Part-Time
A part-time officer leaves on 30 June 2008. The contractual hours of employment
and salary rates during the last year of service were as follows:-
Effective
Date
Hours
Part-time
salary p.a.
£
1.7.07
21.9.07
1.2.08
1.4.08
25 / 37
30 / 37
30 / 37
25 / 37
15,175.00
16,448.11
16,598.92
15,704.05
Pensionable Pay 1.7.97 to 30.6.98
months
01.7.97 to 20.9.97
21.9.97 to 31.1.98
01.2.98 to 31.3.98
01.4.98 to 30.6.98
:
:
:
:
2 20/30
4 10/30
2
3
£
@
@
@
@
£15,175.00
£16,448.11
£16,598.92
£15,704.05
÷
÷
÷
÷
12
12
12
12
Total pensionable pay
=
=
=
=
3,372.22
5,939.60
2,766.49
3,926.01
------------= 16,004.32
-------------
Benefits will be based on the whole-time equivalent. So that we can calculate this,
please show the split periods when completing the pensionable pay box on the
termination form.
The figure for the Annual Remuneration box on the termination form is £15,704.05.
Page 35 of 46
Pensionable Pay Calculation Examples
Employers’ Administration Manual
Pensionable Pay Calculations: Example 3: Backdated Pay Award
A manual worker retires on 31 August 2008.
£196.48 arrears were paid in November 2007 in respect of a late pay award
backdated to 1 July 2007.
This member worked irregular shifts so the pensionable pay has had to be
calculated from payroll cumulatives.**
Pensionable Pay 1.9.07 to 31.8.08
Cumulative pay at week 52 (2007/8)
minus cumulative pay at week ending 2.9.07
plus pay for 1st & 2nd September 2007
plus cumulative pay to 31.8.08
minus the part of the November 2007 arrears
that related to membership before 1.9.07*
Total pensionable pay
£
17,210.96
7,346.80
-----------9,864.16
96.61
-----------9,960.77
7,540.41
-----------17,501.18
99.04
-----------17,402.14
------------
* £196.48 ÷ 123 days (1.7.07 - 31.10.07) x 62 days (1.7.07 - 31.8.07) = £99.04.
This part of the arrears was paid in the final year but doesn’t count towards the
benefit calculation because it was earned before the final year started.
The figure for the Annual Remuneration box on the termination form should be an
annual average, calculated over a representative period (e.g. the final 3 months).
**Even in cases where your calculations haven’t been based on payroll cumulatives,
it’s a good idea to check your figures against them (to make sure that whatever’s
been paid matches what you would expect to have been paid; any discrepancies
between the two need to be resolved).
Page 36 of 46
Employers’ Discretions
Employers’ Administration Manual
Employers’ Policy Statements
Since 1997, the LGPS legislation has required every Employing Authority to issue a
written policy statement on how it will exercise the various discretions provided by
the scheme; to keep it under review; and to revise it as necessary.
The LGPS Regulations required an updated policy document to be published and
notified to the Norfolk Pension Fund within 3 months of 1 April 2008.
Your policy statement should show the basis on which the employer would make its
decisions on the various discretions. The government has advised that employers
should not ‘fetter their discretion’; i.e. policies should not be so rigid or restrictive as
to prevent flexibility where a (possibly unanticipated) situation requires it.
You may wish to consult your employees or their representatives before making or
changing your policy statement.
The law says you should publish your policy statement.
This could be done by placing it on your staff notice boards or intranet site.
Once you’ve issued a policy statement, you should arrange for it to be reviewed from
time to time, particularly if and when there’s a change to any of your stated policies.
If the review results in any alteration to your policy statement, the new version must
be published and a copy sent to NPF within one month of the changes being made.
The following pages explain the various employer discretions from April 2008.
By law the first four (page 38) must be included in your policy statement.
This requirement is in Reg 66(1) of the LGPS (Administration) Regulations 2008.
It’s also a legal requirement that you have regard to the extent to which your policy
on these discretions might lead to a serious loss of confidence in the public service.
This requirement is in Reg 66(5) of the LGPS (Administration) Regulations 2008.
The remaining items (pages 39 & 40) need not be included but we would
recommend it, especially for our larger employers.
Templates are available on our website to help you put your statement
together.
In the next three pages,
‘A Regs’ means the LGPS (Administration) Regulations 2008
‘B Regs’ means the LGPS (Benefits, Membership & Contributions) Regulations 2008
Page 37 of 46
Employers’ Discretions
Employers’ Administration Manual
COMPULSORY ITEMS for inclusion in an Employer’s Policy Statement :
Awarding Additional Membership : B Regs, Regulation 12
An employer may increase a member’s benefits by awarding additional membership
up to a maximum of 10 years. The cost of this would fall on the employer.
Awarding Additional Pension : B Regs, Regulation 13
An employer may increase a member’s benefits by awarding additional pension up
to a maximum of £5,000 p.a. The cost of this would fall on the employer.
Flexible Retirement : B Regs, Regulation 18 (two decisions to be made)
An employer may give consent for a member aged 55 or more who reduces their
grade or hours of work (or both) to receive all or part of their LGPS benefits
immediately, even though they haven’t left its employment.
Any cost for the early payment of benefits would fall on the employer.
If the benefits payable on flexible retirement would normally be reduced for early
payment, the employer may agree to waive all or part of the reduction.
The cost of doing so would fall on the employer.
So policy decisions are needed on when (if at all) flexible retirement might be
permitted and when (if at all) any early payment reductions might be waived.
Early Payment of Pension : B Regs, Regulation 30 (two decisions to be made)
An employer may give consent for a member aged 55 or more who leaves its
employment without an entitlement to immediate LGPS benefits to receive them
straight away regardless. Any cost for the early payment would fall on the employer.
If the benefits payable would normally be reduced for early payment, the employer
may agree to waive all or part of the reduction on compassionate grounds.
The cost of doing so would fall on the employer.
So policy decisions are needed on when (if at all) immediate payment of benefits
might be permitted and when (if at all) any benefit reductions might be waived.
NON-COMPULSORY ITEMS are covered on the next two pages.
Page 38 of 46
Employers’ Discretions
Employers’ Administration Manual
NON-COMPULSORY ITEMS
Absence Contribution Time Limit : A Regs, Regulation 22(2)
A member who has been away from work as a result of maternity, paternity or
adoption leave, industrial action (mainly strikes) or unpaid leave of absence has the
right to pay voluntary pension contributions to prevent any gap in membership. Their
request to do so normally has to be made within 30 days of returning to work (or
within 30 days of their last day of service if they don’t return).
The employer has discretion to extend the 30 days time limit.
LGPS Membership Aggregation : A Regs, Regulation 16(4)(b)(ii)
A member who transfers from another LGPS employer, either directly or after a
break, may opt to aggregate the two periods of membership provided they do so
while still an active member in the new post and within twelve months of joining.
The employer has discretion to extend the twelve months time limit. (See page 42).
Shared Cost AVCs : B Regs, Regulation 15(3) and A Regs, Regulation 25(3)
Whilst it doesn’t seem to be explicitly stated anywhere, it’s implicit in these two
Regulations that an employer may contribute towards a Shared Cost AVC Scheme,
i.e. an AVC Scheme into which the employer pays contributions as well as the
member. We’re not aware of any NPF employer having done so.
Forfeiture of Pension Rights : A Regs, Regulations 47(2), 72, 73, 74 & 76
If a member leaves as a result of a conviction for an offence in connection with their
LGPS employment or as a result of their own criminal, negligent or fraudulent act in
connection with that employment, the employer has discretion (within the terms of
these five regulations) to direct that all or part of their LGPS pension rights should be
forfeited and / or paid over to the employer or specified dependants of the member.
‘Specified Person’ for Member Disagreements : A Regs, Regulation 57(5)(c)
There’s a three-stage dispute procedure (see page 43) for members who disagree
with any LGPS decision made by their employer. The first stage is handled by an
independent referee appointed by the employer. You may appoint internally or
externally but if you pick somebody internal, they should be someone who would
have no part in making pension decisions and is completely ‘at arms length’ from
those who would. Norfolk County Council (as a scheme employer) uses an external
appointee: Chris Harding, MBE, LL.B, Solicitor, c/o Norfolk Police Authority, Jubilee
House, Falconers Chase, WYMONDHAM, Norfolk, NR18 0WW.
Mr Harding has confirmed that he’d be happy to act for other NPF employers as well
but you’d need to make your own arrangements with him direct.
Page 39 of 46
Employers’ Discretions
Employers’ Administration Manual
NON-COMPULSORY ITEMS (continued):
Transfers of Pension Rights : A Regs, Regulation 83(8)
A member who has previous pension rights in a different pension scheme* may
transfer them into the LGPS provided they opt to do so within twelve months of
joining it. The employer has discretion to extend the twelve months time limit.
See page 42 for more details on this.
*This does not include previous rights in the LGPS, which are dealt with under
Membership Aggregation above.
Members’ Contribution Rates : B Regs, Regulation 3(4)
Employers have to allocate members into the appropriate contribution band for
2008/9 and every financial year from then on. If a member’s pay moves into a
different band during a financial year, the employer has discretion to implement the
new band immediately but may prefer to wait until the next annual review.
Admission Policy (‘designating bodies’ only) : A Regs, Regulation 4(3)
This discretion only applies to ‘designating bodies’. As far as the NPF is concerned,
‘designating bodies’ are Parish and Town Councils, Internal Drainage Boards and
companies under the control of Norfolk County Council and / or a District Council.
Employees of ‘designating bodies’ are not automatically members of the LGPS but
are allowed to join it if they (or the class of employee to which they belong) have
been designated by the employer for membership.
The policy statement of a ‘designating body’ should therefore show the criteria it
uses in allowing employees to join the LGPS.
If you need any help or advice with your policy statement,
please contact us.
Please send a copy of your published policy statement and any changes to :
Norfolk Pension Fund, Lawrence House, St Andrews Hill, NORWICH, NR2 1AD
Please also send us an electronic copy to :
pensions.systems@norfolk.gov.uk
Page 40 of 46
Late Transfer Applications
Employers’ Administration Manual
Members wanting to transfer previous pension rights from the LGPS or from outside
schemes normally have to opt within 12 months of joining the scheme.
Employers have discretion to extend the time limit.
The normal procedure would be for the member to apply to you, setting out their
reasons for not applying at the proper time.
Common ones are the member receiving a statement from a previous scheme
they’d forgotten about; or other time commitments, leading to pension forms not
being given priority.
In making your decision, you may wish to bear in mind that if there’s a known
likelihood of the member retiring early (e.g. they’re in their mid-50s and part of an
ongoing staffing review), any transfer credit would increase the cost to you as
employer of releasing their benefits before normal retirement date.
Transfers are not allowed once a member reaches age 64.
If you’ve included this discretion in your Employer Policy Statement (see pages 40
and 41), you should normally have regard to it when making your decision.
If you decide to allow a late transfer, please write to us saying so and enclose
a copy of the member’s application.
Page 41 of 46
Dispute Procedure
Employers’ Administration Manual
Decisions, Complaints and the ‘Specified Person’
Both the employer and the NPF are required by the LGPS to make decisions; for instance:
The employer decides member contribution rates and whether they’re entitled to benefits.
We at NPF decide what previous pension rights count and the amount of any benefits.
When you notify a member of a decision, the law says you must tell them about the dispute
procedure and its time limits and give contact details for your ‘Specified Person’.
This is the legal name for a local ‘referee’ appointed by the employer or by the Norfolk
Pension Fund (depending which of these the complaint is against) to consider disputes.
It could be someone external or a member of your own staff : but in the interests of natural
justice, it should be someone who’s had no previous involvement in the case.
Before Using the Dispute Procedure
If you receive a complaint from a member or their representative about a decision that you
or we have made under the LGPS, the law lays down a legal dispute procedure.
However, we’d suggest that first of all, the member should contact whoever made the
decision they’re complaining about (the employer or the Norfolk Pension Fund).
Most problems are easily sorted out this way but if the member is still unhappy, they’re
entitled to put their complaint through the official procedure.
Help : The Norfolk Pension Fund
We have a guide designed to help a member who wants to make an official complaint or
appeal against a decision. The “Dispute Procedure – A Guide for Members is available on
on our website.
The Dispute Procedure
The dispute procedure is in three stages.
The member must complete each stage, in order, before moving on to the next one.
The three stages are explained on the next page.
First Stage : Specified Person
This involves having the case looked at by the Specified Person (see above).
If he feels the complaint is justified, he’ll issue a new decision, which will be binding.
However, he can only overturn the original decision if he thinks it was legally wrong.
Page 42 of 46
Dispute Procedure
Employers’ Administration Manual
Members can refer their case directly to the Specified Person or ask us to do it for them.
They should normally do this within six months of the decision they’re complaining about.
The Specified Person may extend this time limit if he thinks it’s reasonable to do so.
He should normally make his decision within two months of receiving the complaint.
Second Stage : Administering Authority
If the member is unhappy with the Specified Person’s decision, the second stage is for
them to ask the administering authority, Norfolk County Council, to reconsider their case.
They should do this in writing to : The Head of Finance, Norfolk County Council, Norfolk
Pension Fund, County Hall, Martineau Lane, Norwich, NR1 1DJ.
They should do it within six months of the date of the Specified Person’s decision.
As before, the administering authority can only correct legal errors.
A decision would normally be made within two months; and again, it would be binding.
Third Stage : Pensions Ombudsman
If the member is still unhappy, the third stage is for them to refer their case to the Pensions
Ombudsman, whose address is : 11 Belgrave Road, LONDON, SW1V 1RB.
The Ombudsman is less restricted in his powers and can consider wider issues than the
strictly legal ones, such as whether the case has been handled fairly or reasonably.
Even so, the member must go through the first two stages before he could consider it.
Help : The Pensions Advisory Service (TPAS)
If a member needs help during any of these stages, The Pensions Advisory Service (TPAS)
is a free and independent service that helps people sort out pension problems.
TPAS can also be contacted at : 11 Belgrave Road, LONDON, SW1V 1RB
Telephone : 0845 6012923 (Monday to Friday, 9-5). Fax : 020 7592 7000
E-mail : enquiries@pensionsadvisoryservice.org.uk
They can also be contacted through local Citizens’ Advice Bureaux.
Page 43 of 46
NPF Contact Details
Employers’ Administration Manual
Norfolk Pension Fund staff are based at:
Norfolk Pension Fund
Lawrence House
St Andrews Hill
NORWICH
NR2 1AD
We have facilities for meetings and small training events
and would be very pleased to see you at any time.
Please contact us first to make sure we’ll be available.
For general enquiries, please ring our
General enquiry line : 01603 495923
Fax : 01603 495795
Email : pensions@norfolk.gov.uk
If you have a more specific query or need something more than general advice,
please contact one of our Team Leaders.
The teams deal with work alphabetically by surname of the member concerned:
Surnames
Team Leader
Telephone
Email
A to K
Patsy Bradley
01603 495793
patsy.bradley@norfolk.gov.uk
L to Z
Matthew Crane
01603 495789
matthew.crane@norfolk.gov.uk
Each employer is allocated to one of the teams, who’ll be its main point of contact
for particular work relating to it (e.g. year-end contribution processing).
Your contact is shown on your monthly remittance spreadsheet (SR71).
For queries about pensions payroll, payroll recharges, etc, please ring:
Pensions Payroll Team: 01603 495788
Page 44 of 46
Stationery - Standard Forms
Employers’ Administration Manual
We provide all the standard forms and stationery you’ll need to run the LGPS and
send information to us.
We print the following, which you can request from us
(see “general enquiries” on page 45).
New Member Pack, this includes:
Membership Form (SR95)
Transfer Investigation Request Form (SR95)
Expression of Wish Form (SR81)
Cohabitating Partner Nomination Form (SR83 and SR84)
You can download all other forms and guides from our website:
www.norfolkpensionfund.org
Notification of new scheme member (SR46)
Notification of changes form A (SR47A)
Notification of changes form B (SR47B)
(including family (maternity or adoption) leave)
Guide and Option to Pay Voluntary Contributions Form (SR91)
Notification of changes form C (SR47C)
Pension Option – Reduced or Restricted Pay (SR90)
Notification of absences due to trade dispute (SR76)
Monthly contribution remittance advice (SR71)
Employer Notification of Employee Opting Out form (SR88)
Advance warning of member retiring (R25)
Member leaving pensionable employment (termination form) (L28)
Ill-health retirement certificate : current member (R18)
Ill-health retirement : employer’s decision notice (R45)
Ill-health 3rd tier review medical certificate (R18(IH3))
Ill-health 3rd tier review employer’s decision notice (R46)
Ill-health : deferred benefit referral (R53)
Ill-health : deferred benefit ill-health certificate (R18(DB))
Employer’s authorisation (R16)
(early retirement, waiving reductions, awarding additional pension or membership)
Pensionable pay paid to a member after leaving (L1)
Please ensure you always use the latest version of our forms as we regularly
review and update them.
We might have to return forms you send us if they’re out of date.
We’re developing electronic versions of many of our forms and these will be
available via our secure Employer website. More details will be sent to employers
as they become available.
Page 45 of 46
Norfolk Pension Fund
Lawrence House
St Andrews Hill
NORWICH
NR2 1AD