Ceasing Employers

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For all employers in the Fund, a situation may occur when you no longer have any current employees who are member of the LGPS. If this happens, we will normally cease the membership status of the relevant Employer.

An employer in the Wiltshire Pension Fund is defined as ceased if:

  1. They have no active members left and the Fund determines that they shall no longer be able to admit any new members to the Fund or
  2. As the result of the termination of the employer’s Admission Agreement. The conditions for this are set out in the employer’s Admission Agreement (Admitted Bodies only).

Note: We will discuss the situation with the employer to see whether it is likely that they will have active members again in the future before we take the decision to make them officially ceased under the circumstances in 1.

Cessation procedures, and subsequently cessation deficits, do not apply to Resolution Bodies.

What happens next?

In the interests of consistency and transparency, Wiltshire Pension Fund has created a Cessation Policy which dictates the approach we will normally take regarding the cessation of admitted bodies.

A new Cessation Policy came into force on the 1st April 2016, however, the old cessation policy will still cover those employers who ceased before this date.

Costs

1. Actuary and administration fees (which only apply to new instructions from 01/04/09, before this time no charges applied)

The table below shows who is liable to pay these fees

Ceased Employer type / Who pays
Scheduled Body / The Scheduled body that is ceasing
Resolution Body / N/A
Community Admission Body (CAB) (with no guarantor) / The Community Admission Body
Community Admission Body (with guarantor) / The guarantor
Transferee Admission Body (TAB) (with guarantor) / The guarantor

Note: If you were an admitted body before the terminology of CAB and TAB came into use, as in the table above, there may not be any charge due.

Actuary fees will typically be several thousand pounds but will vary depending on the number of people employed historically and complexities involved.

We will not normally charge an administration fee for compiling and sending the data to our Actuary or for the officer’s time spent on this. However, we reserve the right to charge where we believe we have spent an excessive amount of time in completing the points covered in the cessation policy.

2. Repayment of the deficit

The cessation valuation, as produced by the Actuary, will calculate a final deficit figure due to Fund. The valuation will be based on a number of factors, determined by the guidelines in our cessation policy, and will vary hugely from employer to employer. Hence, it is difficult to give any estimates or figures in this respect, although the cessation valuation will typically be significantly higher than the total monetary deficit currently due by most employers unless the admitted body concerned has a guarantor in place.

Surpluses

In the unlikely event that a surplus exists, the LGPS regulations say that the amount is deemed to be zero and thus no repayment to the employer shall be made.

For further information regarding any of the above please contact Denise Robinson (Pension Fund Relationship Manager) on 01225 713505: email