This policy was reviewed by the Council on May 18th, 2015 and no changes were made.
STREET PARISH COUNCIL
EMPLOYER DISCRETIONS POLICY
EFFECTIVE FROM 13TH MAY, 2014
The Local Government Pension Scheme Regulations 2013 and
The Local Government Pension Scheme (Transitional Provisions
and Savings) Regulations 2014
GUIDANCE NOTES ON EMPLOYER DISCRETIONS POLICY
The Local Government Pension Scheme Regulations
-
Introduction
All employers who participate in the Local Government Pension Scheme are required to formulate a discretions policy in accordance with Regulation 66 of The Local Government Pension Scheme (Administration) Regulations 2008, and Regulation 60 of the Local Government Pension Scheme Regulations 2013.
The policy must be published and kept under review. A copy of the employer’s published policy statement must be sent to the Pension Fund administering authority (Peninsula Pensions). Any amendments to the policy must be sent to Peninsula Pensions within one month of the amendment.
There are different types of discretions
There are many discretions in the current regulations, together with several more extant from the previous regulations (full list at the back of these notes).
However, there are only a handful where there is a requirement for the employer to have a written policy statement and these are shown on the attached discretions template.
These notes will explain about these discretions and how they may affect the employer, together with some examples of what your policy might say, but it is up to every employer to decide on their own discretions.
The other discretions which do not need a written policy will be dealt with as and when they are required.
What employers must consider when making a policy
It is important that each employer considers the following:
Statements of policy about exercise of discretionary functions
Each employing authority must prepare a written statement of its policy
in relation to the exercise of its functions under regulations:
12. Power of employing authority to increase total membership of
active members
16. Shared Cost Additional Pension
18. Flexible retirement
30. Choice of early payment of pension according to the Benefits
Regulations
31. Power of employing authority to grant additional pension
TPSch 2. Power to ‘switch on’ the 85 year rule.
Before the expiry of the period of three months beginning with the start
date, each employing authority must send a copy of its statement to
each relevant administering authority and must publish its statement.
An employing authority must –
(a) keep its statement under review; and
(b) make such revisions as are appropriate following a change in
its policy.
Before the expiry of the period of one month beginning with the date
any such revisions are made, each employing authority must send a
copy of its revised statement to each relevant administering authority
and must publish its statement as revised.
In preparing, or reviewing and making revisions to its statement, an
employing authority must have regard to the extent to which the
exercise of any of the functions mentioned in paragraph (1) in
accordance with its policy could lead to a serious loss of confidence in
the public service and be satisfied that the policy is workable,
affordable and reasonable having regard to foreseeable costs.
In this regulation, a relevant administering authority – in relation to an
employing authority – is any authority which is an appropriate
administering authority for that employer’s employees.
STREET PARISH COUNCIL
EMPLOYER DISCRETIONS POLICY
The Local Government Pension Scheme Regulations 2008
Benefits, Membership and Contributions)
Effective from 13th May, 2014
Regulation R16(2)(e) and R16(4)(d) Policy decision
Shared Cost Additional Pension Scheme
An employer can choose to pay for or A review will be carried out on
contribute towards a member’s Additional a case by case basis and in
Pension Contract via a Shared Cost accordance with criteria to be
Additional Pension Contract (SCAPC) agreed in exceptional
circumstances. Each case as
and when it arises MUST be
considered in detail, having
regard to whether the policy
could lead to a serious loss of
confidence in the public
service and being satisfied
that the policy is workable,
affordable and reasonable
having regard to foreseeable
costs.
Regulation R30(6) and TP11(2) Policy decision
Flexible Retirement
Employers may allow a member from age 55 As above in Regulation 16
onwards to draw all or part of the pension
benefits they have already built up while still
continuing in employment. This is provided
the employer agrees to the member either
reducing their hours or moving to a position
on a lower grade.
In such cases, pension benefits will be reduced
in accordance with actuarial tables unless the
employer waives reduction on compassionate
grounds or a member has protected rights.
Regulation R30(8) Policy decision
Waiving of actuarial reduction
Employers have the power to waive, on As above in Regulation 16
compassionate grounds, the actuarial
reduction (in whole or part) applied to
members benefits paid on the grounds of
flexible retirement.
Employers may also waive, on compassionate
grounds, the actuarial reduction (in whole or
part) applied to member’s benefits for
deferred members and suspended tier 3 ill
health pensioners who elect to draw benefits
on or after age 60 and before normal pension
Employers also have the power to waive, in
whole or part, the actuarial reduction applied
to active members benefits when a member
chooses to voluntarily draw benefits on or
after age 55 and before age 60.
Regulation TPSch 2, para 2(2) and 2(3) Policy decision
Power of employing authority to
‘switch on’ the 85 Year Rule
An employer can choose whether to ‘switch As above in Regulation 16
on’ 85 year rule for members who
voluntarily retire on or after age 55 and
before age 60.
An employer can also choose to waive,
on compassionate grounds, the actuarial
reduction applied to benefits for a member
voluntarily drawing benefits on or after age
55 and before age 60.
Regulation R31 Policy decision
Power of employing authority to grant
additional pension
An employer can choose to grant additional As above in Regulation 16
pension to an active member or within 6
months of ceasing to be an active member
by reason of redundancy or business
efficiency (by up to £6,500* per annum).
(* the figure of £6,500 will be increased each
April under Pensions Increase orders).
These policies may be subject to review from time to time. Any subsequent change in this Policy Statement will be notified to affected employees.
Signed on behalf of: Street Parish Council
Signature of authorised officer: __________________________
Date: 15th May, 2014
Print name of authorised officer Mrs. L.A. Ruff
Job Title: Clerk and Responsible Financial Officer
Regulation B12 Policy decision
Power of employing authority to
increase total membership of active members
An employer may agree to increase the total As above in Regulation 16
membership of an active member who is
leaving on grounds of redundancy/efficiency
on or before 31st March, 2014. The maximum
award (including additional membership in
respect of different employments) must not
exceed 10 years.
An employer may also agree to award
augmented service to a member up to 6
months after they have left employment
provided that their termination of
employment was on redundancy/efficiency
grounds and date of leaving was before 1st
April, 2014.
NB This is a time limit discretion which
expires on 30th September, 2014 for those
whose employment is terminated on 31st
March, 2014.
Regulation B18 Policy decision
Flexible retirement
Employers may allow a member from age 55 As above in Regulation 16
onwards to draw all or part of the pension
benefits they have already built up while still
continuing in employment. This is provided
the employer agrees to the member either
reducing their hours or moving to a position
on a lower grade.
In such cases, pension benefits will be
reduced in accordance with actuarial tables
unless the employer waives reduction on
compassionate grounds or a member has
protected rights.
Regulation B30 Policy decision
Choice of early payment of pension
B30(2) Employers can also allow the early As above in Regulation 16
payment of deferred benefits to former
members of the LGPS between the ages
of 55 and 59.
Please note where a deferred member left
the LGPS before 1 April 2008 the employer
policy under the 1997 Regulations will
B30A(3) Employers may also grant an
application for reinstatement of a suspended
tier 3 ill health pension on or after age 55
and before age 60.
B30(5) and B30A(5) In such cases, pension
benefits will be reduced in accordance with
actuarial tables unless the employer waives
reduction on compassionate grounds or a
member has protected rights.
These policies may be subject to review from time to time. Any subsequent change in this Policy Statement will be notified to affected employees.
Signed on behalf of: Street Parish Council
Signature of authorised officer: ________________________
Date: 15th May, 2014
Print name of authorised officer: Mrs. L. A. Ruff
Job title: Clerk and Responsible Financial Officer
LOCAL GOVERNMENT PENSION SCHEME
STREET PARISH COUNCIL
POLICY STATEMENT ON THE EMPLOYER DISCRETIONS
Under the Local Government Pension Scheme regulations all employers are required to have a policy statement on the employer discretions. The employer discretions which are required to be in a policy statement for this Council are set out below for consideration. In some situations it could be in the Council’s interest to approve eg. to approve a flexible retirement and if the member is over 60 it would not cost the Council anything so the policy could be that the Council will only agree if there is no cost to it. A copy of the proposed policy has been approved by the Pensions Operations Manager, Somerset County Council and it would be acceptable for the Council to agree to consider any of these discretions as and when a situation arose having regard to the business case each time.
These documents list areas within regulations that provide that certain bodies “may” do certain things.
Discretions from 1st April, 2008 in relation to post 31st March, 2008 active members (excluding councillor members) and post 31st March, 2008 leavers (excluding councillor members), being discretions under:
– the Local Government Pension Scheme (Administration) Regulations 2008 (prefix A)
– the Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2007 (as amended) (prefix B)
– the Local Government Pension Scheme (Transitional Provisions) Regulations 2008 (prefix T)
– the Local Government Pension Scheme Regulations 1997 (as amended) (prefix L)
DISCRETION REGULATION EXERCISED BY
Whether to augment B12 Employer
membership of an active
member (by up to 10 years)
Whether to grant additional B13 Employer
pension to a member (by up to
£5,000 p.a.)
Whether all or some benefits B18(1) Employer
can be paid if an employee
reduces their hours or grade
(flexible retirement)
DISCRETION REGULATION EXERCISED BY
Whether to waive, in whole or B18(3) Employer
in part, actuarial reduction on
benefits paid on flexible
retirement
Whether to grant application for B30(2) Employer
early payment of benefits on or
after age 55 and before age 60
Whether to waive, on B30(5) Employer
compassionate grounds, the
actuarial reduction applied to
benefits paid early under B30
Whether to grant an application B30A(3) Employer
for reinstatement of a suspended
tier 3 ill health pension on or
after age 55 and before age 60
Grant application from a post 31(2) Employer
31.3.98/pre 1.4.08 leaver or
from a councillor for early
payment of benefits on or after
age 50/55 and before age 60
Waive, on compassionate 31(5) Employer
grounds, the actuarial reduction
applied to benefits paid early for
a post 31.3.98/pre 1.4.08 leaver
or a councillor leaver
Councillor optants out and pre 31(7A) Employer
1.4.08 employee optants out
only to get benefits paid from
NRD if employer agrees
Dated 20th November, 2012
LOCAL GOVERNMENT PENSION SCHEME
EMPLOYER DISCRETIONS POLICY
On 20th November, 2012 the Council agreed a policy statement on the employer discretions and that consideration would be given to discretions as and when a situation arose.
Under the LGPS 2014 all employers who participate in the LGPS are required to formulate, publish and keep under review a discretions policy. Peninsula have redesigned the guidance notes and example Employer Discretions Policy which are attached for consideration. Employers must publish new discretions and send a copy to Peninsula Pensions by 1st July, 2014.
It is suggested following consultation with Peninsula that the example Policy is agreed and that in each section under Policy decision it states that a review will be carried out on a case by case basis and in accordance with criteria to be agreed in exceptional circumstances. Each case as and when it arises MUST be considered in detail, having regard to whether the policy could lead to a serious loss of confidence in the public service and being satisfied that the policy is workable, affordable and reasonable having regard to foreseeable costs.
This was agreed by the Council on 13th May, 2014.
STREET PARISH COUNCIL
EMPLOYER DISCRETIONS POLICY
EFFECTIVE FROM 13TH MAY, 2014
The Local Government Pension Scheme Regulations 2013 and
The Local Government Pension Scheme (Transitional Provisions
and Savings) Regulations 2014
GUIDANCE NOTES ON EMPLOYER DISCRETIONS POLICY
The Local Government Pension Scheme Regulations
Introduction
All employers who participate in the Local Government Pension Scheme are required to formulate a discretions policy in accordance with Regulation 66 of The Local Government Pension Scheme (Administration) Regulations 2008, and Regulation 60 of the Local Government Pension Scheme Regulations 2013.
The policy must be published and kept under review. A copy of the employer’s published policy statement must be sent to the Pension Fund administering authority (Peninsula Pensions). Any amendments to the policy must be sent to Peninsula Pensions within one month of the amendment.
There are different types of discretions
There are many discretions in the current regulations, together with several more extant from the previous regulations (full list at the back of these notes).
However, there are only a handful where there is a requirement for the employer to have a written policy statement and these are shown on the attached discretions template.
These notes will explain about these discretions and how they may affect the employer, together with some examples of what your policy might say, but it is up to every employer to decide on their own discretions.
The other discretions which do not need a written policy will be dealt with as and when they are required.
What employers must consider when making a policy
It is important that each employer considers the following:
Statements of policy about exercise of discretionary functions
Each employing authority must prepare a written statement of its policy
in relation to the exercise of its functions under regulations:
12. Power of employing authority to increase total membership of
active members
16. Shared Cost Additional Pension
18. Flexible retirement
30. Choice of early payment of pension according to the Benefits
Regulations
31. Power of employing authority to grant additional pension
TPSch 2. Power to ‘switch on’ the 85 year rule.
Before the expiry of the period of three months beginning with the start
date, each employing authority must send a copy of its statement to
each relevant administering authority and must publish its statement.
An employing authority must –
(a) keep its statement under review; and
(b) make such revisions as are appropriate following a change in
its policy.
Before the expiry of the period of one month beginning with the date
any such revisions are made, each employing authority must send a
copy of its revised statement to each relevant administering authority
and must publish its statement as revised.
In preparing, or reviewing and making revisions to its statement, an
employing authority must have regard to the extent to which the
exercise of any of the functions mentioned in paragraph (1) in
accordance with its policy could lead to a serious loss of confidence in
the public service and be satisfied that the policy is workable,
affordable and reasonable having regard to foreseeable costs.
In this regulation, a relevant administering authority – in relation to an
employing authority – is any authority which is an appropriate
administering authority for that employer’s employees.
STREET PARISH COUNCIL
EMPLOYER DISCRETIONS POLICY
The Local Government Pension Scheme Regulations 2008
(Benefits, Membership and Contributions)
Effective from 13th May, 2014
Regulation R16(2)(e) and R16(4)(d) Policy decision
Shared Cost Additional Pension Scheme
An employer can choose to pay for or A review will be carried out on
contribute towards a member’s Additional a case by case basis and in
Pension Contract via a Shared Cost accordance with criteria to be
Additional Pension Contract (SCAPC) agreed in exceptional
circumstances. Each case as
and when it arises MUST be
considered in detail, having
regard to whether the policy
could lead to a serious loss of
confidence in the public
service and being satisfied
that the policy is workable,
affordable and reasonable
having regard to foreseeable
costs.
Regulation R30(6) and TP11(2) Policy decision
Flexible Retirement
Employers may allow a member from age 55 As above in Regulation 16
onwards to draw all or part of the pension
benefits they have already built up while still
continuing in employment. This is provided
the employer agrees to the member either
reducing their hours or moving to a position
on a lower grade.
In such cases, pension benefits will be reduced
in accordance with actuarial tables unless the
employer waives reduction on compassionate
grounds or a member has protected rights.
Regulation R30(8) Policy decision
Waiving of actuarial reduction
Employers have the power to waive, on As above in Regulation 16
compassionate grounds, the actuarial
reduction (in whole or part) applied to
members benefits paid on the grounds of
flexible retirement.
Employers may also waive, on compassionate
grounds, the actuarial reduction (in whole or
part) applied to member’s benefits for
deferred members and suspended tier 3 ill
health pensioners who elect to draw benefits
on or after age 60 and before normal pension
Employers also have the power to waive, in
whole or part, the actuarial reduction applied
to active members benefits when a member
chooses to voluntarily draw benefits on or
after age 55 and before age 60.
Regulation TPSch 2, para 2(2) and 2(3) Policy decision
Power of employing authority to
‘switch on’ the 85 Year Rule
An employer can choose whether to ‘switch As above in Regulation 16
on’ 85 year rule for members who
voluntarily retire on or after age 55 and
before age 60.
An employer can also choose to waive,
on compassionate grounds, the actuarial
reduction applied to benefits for a member
voluntarily drawing benefits on or after age
55 and before age 60.
Regulation R31 Policy decision
Power of employing authority to grant
additional pension
An employer can choose to grant additional As above in Regulation 16
pension to an active member or within 6
months of ceasing to be an active member
by reason of redundancy or business
efficiency (by up to £6,500* per annum).
(* the figure of £6,500 will be increased each
April under Pensions Increase orders).
These policies may be subject to review from time to time. Any subsequent change in this Policy Statement will be notified to affected employees.
Signed on behalf of: Street Parish Council
Signature of authorised officer: __________________________
Date: 15th May, 2014
Print name of authorised officer Mrs. L.A. Ruff
Job Title: Clerk and Responsible Financial Officer
Regulation B12 Policy decision
Power of employing authority to
increase total membership of active members
An employer may agree to increase the total As above in Regulation 16
membership of an active member who is
leaving on grounds of redundancy/efficiency
on or before 31st March, 2014. The maximum
award (including additional membership in
respect of different employments) must not
exceed 10 years.
An employer may also agree to award
augmented service to a member up to 6
months after they have left employment
provided that their termination of
employment was on redundancy/efficiency
grounds and date of leaving was before 1st
April, 2014.
NB This is a time limit discretion which
expires on 30th September, 2014 for those
whose employment is terminated on 31st
March, 2014.
Regulation B18 Policy decision
Flexible retirement
Employers may allow a member from age 55 As above in Regulation 16
onwards to draw all or part of the pension
benefits they have already built up while still
continuing in employment. This is provided
the employer agrees to the member either
reducing their hours or moving to a position
on a lower grade.
In such cases, pension benefits will be
reduced in accordance with actuarial tables
unless the employer waives reduction on
compassionate grounds or a member has
protected rights.
Regulation B30 Policy decision
Choice of early payment of pension
B30(2) Employers can also allow the early As above in Regulation 16
payment of deferred benefits to former
members of the LGPS between the ages
of 55 and 59.
Please note where a deferred member left
the LGPS before 1 April 2008 the employer
policy under the 1997 Regulations will
B30A(3) Employers may also grant an
application for reinstatement of a suspended
tier 3 ill health pension on or after age 55
and before age 60.
B30(5) and B30A(5) In such cases, pension
benefits will be reduced in accordance with
actuarial tables unless the employer waives
reduction on compassionate grounds or a
member has protected rights.
These policies may be subject to review from time to time. Any subsequent change in this Policy Statement will be notified to affected employees.
Signed on behalf of: Street Parish Council
Signature of authorised officer: ________________________
Date: 15th May, 2014
Print name of authorised officer: Mrs. L. A. Ruff
Job title: Clerk and Responsible Financial Officer
On 15th July, 2014 the Council added the following to the Employer Discretions Policy.
Regulations 22 (8 and 9) Policy Decision
Whether to extend 12 month period
to separate previous LG service A review will be carried out on a case
by case basis and in accordance
with criteria to be agreed in
exceptional circumstances. Each
case as and when it arises MUST be
considered in detail, having regard to
whether the policy could lead to a
serious loss of confidence in the
public service and being satisfied
that the policy is workable, affordable
and reasonable having regard to
foreseeable costs.
Regulation 100 (6) As above.
Whether to extend 12 month period
to allow a transfer-in of non-LG
pension rights
Regulation 9 (3) 2014 Regulations and guidance
Determine rate of employee noted by Council on 19.11.13
contributions including employee contribution
bands and that bands from 1.4.14
would be determined by actual
pensionable pay rather than by full
time equivalent pay.
These policies may be subject to review from time to time. Any subsequent change in this Policy Statement will be notified to affected employees.
Signed on behalf of: Street Parish Council
Signature of authorised officer: ______________________________
Date: 15th July, 2014
Print name of authorised officer: Mrs. L.A. Ruff
Job title: Clerk and Responsible Financial Officer
