Appendix B
THELOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997
(LGPS) AND THE LOCAL GOVERNMENT DISCRETIONARY PAYMENTS
(AMENDMENT)REGULATIONS 1999 (DPS REGS)
EARLY RETIREMENT AND PENSIONS POLICY
1.0 INTRODUCTION
1.1This policy sets the Rother District Council’s approach to early retirement and pensions with particular reference to the discretions available to Employing Authorities for employees who are in membership of the LGPS.
1.2In determining this policy the Council has taken account of the fact that it is required to act with prudence and propriety in respect of early retirement and pensions issues and this policy will ensure:
i)fairness and equity, in application;
ii)that funding and contribution levels are adequate to meet future demands; and
iii)that elected members are made aware of the financial consequences of decisions taken under it.
2.0 REQUESTS FOR EARLY RETIREMENT
2.1The Council has decided to accept provisions which allow early retirement. However, elections for such made in accordance with Regulation 31, LGPS, will only be agreed to in circumstances where it can be shown that there is a sufficient financial, or other, benefit to the Council. Exceptions to this practice will be employees who suffer permanent ill health, which are dealt with separately, or on compassionate grounds.
2.2The following criteria will apply to requests for early retirement.
i)Early retirement for staff aged 50-59 on unreduced benefits, even where they meet the “85” rule, will only be approved by the Licensing and General Purposes Committee where the costs of that early retirement can be met from identified savings within a five year period;
ii)Requests for early retirement on compassionate grounds on unreduced benefits will be considered in exceptional circumstances e.g. where there is a compelling domestic situation. However in these circumstances alternatives to early retirement will be explored, for example a career break, and it will be appropriate in accordance with the policy of the East Sussex County Council to abate the pension should a change in the particular circumstances occur; and
iii)Requests for early retirement on the basis of an actuarially reduced pension by employees who do not meet the “85” rule will be considered on their merits.
3.0 PROCEDURE FOR GAINING APPROVAL FOR EARLY RETIREMENTS
3.1All requests for early retirement, other than on ill health grounds, must be raised with the employee’s Director. Where potential eligibility is established and subject to consultation with the Head of Human Resources individual requests will be considered by the Licensing and General Purposes Committee for decision.
3.2Reports containing requests for early retirement must show the revenue and capitalised cost of funding any additional years. Information on costs are to be obtained form the East Sussex County Council as the Administering Authority.
3.3Reports will show the financial and non-financial benefits of allowing the requests for early retirement to be granted.
3.4In order to approve applications for early retirement savings must be identified in order to fund the costs involved within a five year period except where the reason is established as being on compassionate grounds when recovery may not be possible.
3.5Where it is intended savings are made either through the particular post not being replaced, or by the post being replaced at a lower grade, then this should be based on the relevant Director’s assessment of future staffing needs, given the information available at that time. The Annual Report on pensions will identify over the 5 year period the actual savings compared to forecast.
4.0 EARLY RETIREMENT ON THE GROUNDS OF REDUNDANCY AND
INTEREST OF THE EFFICIENCY OF THE SERVICE
4.1The Council has decided to continue with provisions to allow for the payment of enhancement of early retirement benefits. However, enhancements made in accordance with Regulation 52, LGPS or DPS Regs, will only be made in circumstances where it can be shown that there is a sufficient financial, or other, benefit to the Council.
4.2The Council has in place an Employment Stability Agreement which sets out the measures to be employed in order to reassure both employees and the Council that all alternatives to each particular proposed case of early retirement or redundancy have been explored and the correct procedures followed prior to any termination of employment under these provisions.
4.3All reports concerning proposed re-structuring of the Council’s Directorates, which include early retirement on the grounds of redundancy and/or interest of the efficiency of the service, must show the revenue and capitalised cost of funding any additional years and redundancy(s). These reports must show the general position when being made to the relevant Committee and the detailed position in individual cases when being made to the Licensing and General Purposes Committee. Information on costs of the pension related elements are to be obtained from the East Sussex County Council as the Administering Authority.
4.4In the cases where the reasons for the early retirement are in the interest of the efficiency of the service or redundancy then the payment of “added years” of service will be on the basis of the following sliding scale:
AGEMaximum availableAGEMaximum available
added years *added years *
503586
513596
524605
534614
544623
556632
566641
576 650
(*Subject to the added years not increasing the years of service above 40 years and a maximum of age 65)
4.5Where it is intended savings are made either through the particular post not being replaced, or by the post being replaced at a lower grade, then this should be based on the relevant Chief Officer’s assessment of future staffing needs, given the information available at that time. The Annual Report on pensions will identify over the 5 year period the actual savings compared to forecast.
5.0SUMMARY OF DISCRETIONS ADOPTED BY THE COUNCILUNDER THE 1997 REGULATIONS 1997 AND THE DISCRETIONARY PAYMENTS (AMENDMENT) REGULATIONS 1999.
5.1Within the LGPS and the DPS Regulations there are a number of areas giving the Council discretion over how it operates the Scheme for its employees. This section sets out the policy decisions taken by Rother District Council in relation to the Employing Authority discretions.
5.2Regulation 7(9)(a), LGPS
A scheme member who has opted out more than once can rejoin with the employing authority’s consent.
- The Council consents to not more than one re-entry into the LGPS by employees.
Regulation 14(3)(b), LGPS
A manual worker who returns to the LGPS after a period due to a CCT exercise has the right to opt to pay 5% as before within 30 days of returning or such longer period as the employing authority allows.
- The Council has not adopted this discretion.
Regulation 15, LGPS
Discretion for an employing authority to reduce/waive employee contributions after 40 years LGPS membership.
- The Council has not adopted this discretion.
Regulation 18(b) and (7), LGPS
A member of staff who elects to pay optional contributions in respect of a period of absence has to do so within 30 days of returning to work or such longer period as the employing authority allows.
- A member of staff entitled to pay optional contributions in respect of a period of unpaid absence has a period of not more than 6 calendar months from the date of return in which to make the payments in full.
Regulation 23(4), LGPS
An employing authority may issue a Certificate of Protection of Pension Benefits (reduction in earnings etc) without receiving an application to do so from the scheme member.
- A Certificate of Protection of Pension Benefits will be issued upon request only.
Regulation 31(2), LGPS
An employing authority has the discretion to give consent to early retirement between age 50 and 60. No actuarial reduction will apply if age plus service exceeds 85 (“Rule of 85").
- This discretion has been adopted, see Paragraphs 2 and 3 above.
Regulation 31(5), LGPS
An employing authority may waive the percentage reduction that would apply if the member does not satisfy the “Rule of 85" on compassionate grounds.
- This discretion has been adopted.
Regulation 52, LGPS and DPS Regulations
An employing authority can grant extra scheme membership to members leaving over the age of 50 (up to an additional 6 years of service).
- These discretions have been adopted, see Paragraph 4 above.
In addition where a member of staff is below the age of 50 or is over 50 with less than 5 years service the employing authority may award an enhanced service payment of up to 66 weeks pay,
- This discretion has been adopted.
Regulation 53, LGPS
An employing authority may grant additional scheme membership to a new employee within six months of joining.
- The Council has not adopted this discretion.
Regulation 67, LGPS
An employing authority can establish a shared cost AVC arrangement.
- The Council has not adopted this discretion.
Regulation 143, LGPS
An employing authority can pass across its liability for Compensatory Added Years Pensions to the Fund.
- Subject to the views of the County Council as Administering Authority this discretion has not been adopted.
Regulation 9 of the Transitional Regulations
An employing authority can pass a resolution to deem all contracts buying pre 1988 widowers benefits as paid up and grant service from 1 April 1972 to 6 April 1988 for all widowers benefits.
- This discretion has been adopted.
6.0POLICY REVIEW
6.1The policy in respect of Requests for Early Retirement and Early Retirement on the Grounds of Redundancy and Interest of the Efficiency of the Service will be reviewed on an annual basis in order to ensure it still meets the Councils objectives and is financially sustainable. It will form part of an Annual Report and will contain the latest available information relating to the state of the pension fund and the number and costs of early retirements in the previous year. Responsibility for presenting this Annual Report to be made to the first meeting of the Licensing and General Purposes Committee each Council year lies with the Head of Finance and the Head of Human Resources.
7.0FURTHER INFORMATION
7.1Further information concerning the application of this policy can be obtained from the Head of Finance or the Head of Human Resources.
August 1999
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