September 2014
Cannock Chase High School
Local Government Pension Scheme
EmployerDiscretions–CompulsoryPolicyStatements
This document outlines Cannock Chase High School’s policy on the employer discretions specified in the Local Government Pension Scheme Regulations 2013, which come into effect from 1 April 2014.
BackgroundRegulations
- LocalGovernmentPensionSchemeRegulations2013(LGPS2013)
- LocalGovernmentPensionScheme(TransitionalProvisions,savingsandAmendment)Regulations2014(TP2014)
AreasofDiscretion
Thereare5areasofdiscretionwhereaSchemeEmployermustpublishapolicyby30June2014underRegulation60ofLGPS2013andTP2014.
- Regulation16LGPS2013(fundingofadditional pension)
- Regulation30(6)LGPS2013(FlexibleRetirement)
- Regulation30(8)LGPS2013(waivingofactuarialreductionincludedwith
- Regulation30(6)Regulation31LGPS2013(awardofadditionalpension)
- Schedule2TP2014(applicationofRuleof85)
In addition this document details the Academy’s policy for the allocation of LGPS employeecontribution bands and the Scheme of Delegation for decision making powers.
Regulation16LGPS2013:FundingofAdditionalPension
ASchememembercan“buy”anadditionalannualpensionbenefit(currently£6500peryearfor2014/2015)toenhancetheirbenefits,toreplacelostpensioncausedbyaperiodofauthorisedabsenceorindustrialdispute.Themembercan“buy”theadditionalpensioneitheroveraperiodoftimeorbyaoneofflumpsum payment.
Wherethepensionhasbeenlostbecauseofaperiodofauthorisedunpaidabsence,includingchildrelatedabsencetheregulationsrequiretheemployertocontributetothecostofthelostpensionwherethememberelectsto“buy”backthelostpensionwithin30daysofreturningtowork. Theemployercontributes2/3rdsofthetotalcostandtheemployee1/3ofthetotalcost. ThecostiscalculatedinaccordancewithguidanceprovidedbytheGovernmentActuary(GAD).
Wheretheabsencehasoccurredinconsequenceofatradedisputetheemployerisnotrequiredtosharethecostofthelostpensionandtherearenotimelimitsastowhentheemployeecanelectto“buyback”thelostpension.
Wheretheemployerdoesnotreceiveanelectionformfromtheemployeewithin30daysofreturningtoworkfromanauthorisedabsenceonnopaytheSchemeemployermayextendtheperiodbywhichtheywillacceptanelectionbeyondthe30daydeadline.
TheadditionalpensionmaybefundedinwholeorinpartbytheSchemeemployer.
Discretions
1. Whethertoextendthe30daydeadlineforamembertoelectto“buy”backthelostpensioninrespectofanunpaidperiodofauthorisedabsence.
2.WhetherCannock Chase High SchoolastheSchemeemployerwillcontributetowardsthecostof“buying”additionalpensionforaSchememembertoenhance theirpensionbenefits.
Policy
WhereaSchememembermakesanelectionafterthe30daydeadlineto“buy”backanamountoflostpension,asaresultofunpaidauthorisedabsence,anditcanbedemonstratedthatthereasonformissingthedeadlinewasbecausethememberwasnotinformedbyCannock Chase High Schoolthatthisdeadlineexisted,Cannock Chase High SchoolasaSchemeemployerwillacceptalateelectionupto30daysafterthereceiptofthefirstAnnualBenefitstatementreceivedbythemember,followingtheemployeesreturntoworkfromtheperiodofunpaidauthorisedabsence.
Cannock Chase High SchoolasaSchemeemployerwillonlycontributetothecostof”buying”additionalpensionwheretheSchemememberis“buying”additionalpensioninrespectofaperiodofauthorisedabsencewhereanelectionformwasreceivedfromtheSchemememberwithin30daysofreturningtowork.
Regulation 16 (2)(e ) and 16(4)(d). Additional pension contributions
Discretions
This regulation allows Cannock Chase High Schoolto fund employees additional pension
contributions (in whole or in part). However funding additional pension contributions for employees would incur considerable costs for the Academy.
Policy
Cannock Chase High Schoolwill not fund in whole or in part employees additional pensioncontributions.
Regulation30(6)LGPS2013:FlexibleRetirement
ASchemeemployerhasthediscretiontoallowflexibleretirementforanemployeeage55oroverwhowiththeemployer’sconsentreducestheirhoursorgrade. Ifanemployerchoosestoexercisethisdiscretion,allorpartoftheaccruedbenefitscanbepaideventhoughthepersonremainsinemployment. Benefitswillbereducedonaccountofearlypayment(subjecttocertainprotectionsforpre1April2014members).
WheretheSchemeemployerpermitsflexibleretirementthemembermusttakeallofthebenefitsbuiltuppriorto31March2008.
Discretions
Whethertopermitflexibleretirementforstaffage55orover,whowiththeagreementofCannock Chase High SchoolasaSchemeemployer,arepermittedtoreducetheirworkinghoursorgrade.
Whethertopermitthemembertodraw:
allpartornoneofthepensionbenefitsbuiltupafter31March2008andbefore1April2014and/or
allpartornoneofthepensionbenefitsbuiltupafter31March2014
WhethertheSchemeemployer,willagreetowaiveinwholeorinpartanyactuarialreductionwhichwouldotherwisebeappliedtothebenefitstakenonflexibleretirementbeforeNormalPensionAge.
Policy
ThatCannock Chase High SchoolasemployingauthoritywillconsideranapplicationreceivedinwritingfromaSchememembertoelectforflexibleretirementunderRegulation30(6). EachcasewillbeconsideredbytheCannock Chase High SchoolonitsmeritsandwillbesubjecttotheapprovaloftherelevantManagerundertheCannock Chase High School’s Schemeofdelegation,andingivingthatapprovaltheyaresatisfiedthat:
- There are no pension costs to the Academy arising form the employee's flexible retirement.
- Thereisanoperational,businessorfinancialcaseforpermittingflexibleretirementwhich will not result in any detriment to the level of service.
- Areductiontothetotalcostsofemployingthepersonofatleast40%.
- Anyagreedchangetotheemployee'scontractunderthispolicywillbeapermanentchangetotheircontractualtermsandconditions.
- Wherearequestforreleaseofretirementbenefitsunderthisprovisionhasbeenrefused,nofurtherapplicationundertheprovisionmaybeconsidereduntilthefollowingfinancialyear.
Regulation30(8)
The Academywill not waive in whole or in part any reduction applied toindividuals drawing their pension benefits before their normal retirement age under regulations30(5) or 30(6).
Regulation31LGPS2013:Poweroftheemployingauthoritytoawardadditionalpensiontoactivemembers
ASchemeemployermayresolvetoawardanactivememberoramemberwhowasanactivememberwhowasdismissedbyreasonofredundancyorbusinessefficiencyorwhoseemploymentwasterminatedbymutualconsentongroundsofbusinessefficiencyadditionalannualpension.
Discretions
Activememberwhowasdismissedbyreasonofredundancy
The AcademyastheSchemeemployerwillexercisethisdiscretionwhereanactiveLGPSmemberisdismissedonthegroundsofredundancyunderregulation30(7)ofLGPS2013andwherethatpersonisentitledtoaredundancypayment.
WhereanemployeeofCannock Chase High SchoolasemployingauthorityisdismissedonthegroundsofredundancyandqualifiesforastatutoryredundancypaymenttheywillawardlumpsumcompensationundertheLocalGovernment(EarlyTerminationofEmployment)(DiscretionaryCompensation)(EnglandandWales)Regulations2006.
Atthemember'srequest,theCannock Chase High Schoolwill,asanalternativetothiscompensationpayment,allowthemembertoreceiveadditionalannualpension underRegulation31oftheLGPS2013whichwillbeassessedhavingregardtothecapitalvalueofthelumpsumcompensationotherwisepayable,andinaccordancewithfactorssuppliedbytheFundActuary.
Activemembersandactivemembersdismissedbyreasonofbusinessefficiencyorwhoseemploymentwasterminatedbymutualconsentongroundsofbusinessefficiencyadditionalannualpension.
Atthistime,theAcademywillnotnormallyusethispowerinanyothercircumstances.
Regulation30LGPS2013: Earlyretirementafterage55beforeNormalPensionAge(NPA)whereemploymentceasesonorafter1April2014
Background
- ASchemememberwholeavestheiremploymentafter1April2014andhasattainedage55ormorecanelecttoreceivetheirpensionbenefitsimmediatelyunderRegulation30(5).
- Aformeremployee,whoceasedtheiremploymentandSchememembershipafter1April2014withoutentitlementtoimmediatepaymentofbenefits,attainsage55theycanelectfortheirdeferredbenefittobebroughtintopaymentbeforeNPA.
- AformeremployeewhoceasedtheiremploymentandSchememembershipafter1April2014withaTier3Illhealthbenefitwhichhasceasedtobepaid(paidforamaximumof3years),attainsage55theycanelectfortheirdeferredbenefittobebroughtintopaymentbeforeNPA.
Discretions
1. WhereanelectionisreceivedunderRegulation31Cannock Chase High SchoolasaSchemeEmployercanexercisetheirdiscretionastowhethertowaiveallorpartofanyactuarialreduction(oncompassionateorothergrounds)thatwouldapplytothemember’spensionbenefitsunderRegulation30(8)ofLGPSRegulations2013.
2.WhereanelectionisreceivedunderRegulation31Cannock Chase High SchoolasaSchemeEmployercanexercisetheirdiscretionastowhethertoapplythe“Ruleof85”protectionsto“relevantemployees”underSchedule2ofTP2014.
AreasofDiscretionthataSchemeEmployercanexerciseinrelationto1and2above.
WhereanemployeeorformeremployeewasnotaSchemememberbefore1October2006
Whetherto,
waiveoncompassionategrounds,anyactuarialreductionthatwouldbeappliedtobenefitsbuiltupbefore1April2014and/or;
waive,inwholeorinpart(onanygrounds),anyactuarialreductionthatwouldbeappliedtobenefitsbuiltupafter31March2014.
WhereanemployeeorformeremployeewasaSchemememberbefore1October2006andwillbe60ormoreon31March2016.
Whetherto,
waiveoncompassionategrounds,anyactuarialreductionthatwouldbeappliedtobenefitsbuiltupbefore1April2016and/or;
waive,inwholeorinpart(onanygrounds),anyactuarialreductionthatwouldbeappliedtobenefitsbuiltupafter31March2016.
WhereanemployeeorformeremployeewasaSchemememberbefore1October2006andwillnotbeage60ormoreon31March2016andwillnotattainage60between1April2016and31March2020.
Whetherto,
waiveoncompassionategrounds,anyactuarialreductionthatwouldbeappliedtobenefitsbuiltupbefore1April2014and/or;
waive,inwholeorinpart(onanygrounds),anyactuarialreductionthatwouldbeappliedtobenefitsbuiltupafter31March2014.
WhereanemployeeorformeremployeewasaSchemememberbefore1October2006andwillnotbe60ormoreon31March2016butwillattainage60between1April2016and31March2020
Whetherto,
waiveoncompassionategrounds,anyactuarialreductionthatwouldbeappliedtobenefitsbuiltupbefore1April2020and/or;
waive,inwholeorinpart(onanygrounds),anyactuarialreductionthatwouldbeappliedtobenefitsbuiltupafter31March2020.
Regulation 30(8) – Waiving of actuarial reduction
Policy
The Academywill not waive in whole or in part any reduction applied toindividuals drawing their pension benefits before their normal retirement age under schedule 2 2(1).
Rule of 85 protections
The Academy will not allow the rule of 85 protections to apply.
Cannock Chase High School policy for the allocation of LGPS employee contribution bands
Members of the Local Government Pension Scheme (LGPS) will be assigned to the relevant contribution band for the year 2014/15 based upon the pensionable pay that they earned in2013/14. For employees who did not work for the whole of that year, the relevant LGPS contribution band will be allocated based upon their annual salary rate.
The Academy’s policy is to set contribution rates based on actual pay as at 1 April each year and notto make any changes during the year, except in the following circumstances:
(i)pay is permanently reduced, such that it would cause a move to a lower band
(ii)pay is permanently increased, such that it would cause a move to a higher band
(iii)a contractual additional payment is applied that would cause a move to a higher band
In all other circumstances assessment will be made on the actual pay at the end of March each year.
Cannock Chase High School
Scheme of Delegation for LGPS
This Scheme of Delegation is subject to review every 3 years or at the point of statutory, regulatory or organisational change.
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