The Local Government Pension Scheme (Amendment) Regulations 2008

Acts of Parliament

Employment

Crown Copyright Acknowledged

STATUTORY INSTRUMENTS

The Local Government Pension Scheme (Amendment) Regulations 2008


	Made		14th April 2008
	Laid before Parliament		16th April 2008
	Coming into force		7th May 2008

	These Regulations are made in exercise of the powers conferred by sections 7 and 12 of the Superannuation Act 1972(1).

	In accordance with section 7(5) of that Act, the Secretary of State has consulted (a) such associations of local authorities as appeared to her to be concerned; (b) the local authorities with whom consultation appeared to her to be desirable; and (c) such representatives of other persons likely to be affected by the Regulations as appeared to her to be appropriate.

	The Secretary of State makes the following Regulations:

1-	Citation, application, commencement and interpretation

	(1)	These Regulations may be cited as the Local Government Pension Scheme (Amendment) Regulations 2008.
	(2)	These Regulations apply in relation to England and Wales(2).

	(3)	These Regulations shall come into force on 7th May 2008 but have effect from 1st April 2008.
	(4)	In these Regulations “the Benefits Regulations” means the Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2007(3).

2-	Amendment of the Benefits Regulations
	The Benefits Regulations are amended in accordance with regulations 3 to 23.
3-	In regulation 1 (citation, commencement, interpretation and application) —

		(a)	after the definition of “the 1997 Regulations”, insert—

				““the Administration Regulations” means the Local Government Pension Scheme (Administration) Regulations 2008(4);”; and

		(b)	after the definition of “the 1997 Scheme”, insert—

				““administering authority” has the meaning ascribed by Schedule 1 to the Administration Regulations;”.

4-	For regulation 2 (active members) substitute—

“2.

	(1)	The term “active member” in relation to the Scheme is to be construed in accordance with regulation 4(1) of, and Schedule 1 to, the Administration Regulations.
	(2)	An active member of the 1997 Scheme is an active member of the Scheme for as long as he continues to be in employment which makes him eligible to be such in accordance with Part 2 of the Administration Regulations.
	(3)	But a person is not an active member unless he is employed under a contract of employment for at least three months.”.

5-	In regulation 3 (contributions payable by active members) —

		(a)	for paragraph (2), substitute—

“(2)

Subject to paragraph (4) the annual contribution rate to be applied to a person who becomes an active member is determined by his employing authority at the commencement of his membership on the basis of his pensionable pay in accordance with the following table.

Band	Range	Contribution rate


1	£0 to £12,000	5.5%

2	£12,001 to £14,000	5.8%

3	£14,001 to £18,000	5.9%

4	£18,001 to £30,000	6.5%

5	£30,001 to £40,000	6.8%

6	£40,001 to £75,000	7.2%

7	More than £75,000	7.5%”

		(b)	for paragraph (3), substitute—

	“(3)	On 1st April 2009, and each subsequent anniversary, the figures in the second column of the table in paragraph (2) (“Range”) are increased by applying the appropriate increase and rounding the result down to the nearest £100.
	(3A)	In paragraph (3), “the appropriate increase” means the amount by which the figures would be increased with effect from 6th April of the relevant year if they were pensions to which the Pensions (Increase) Act 1971 applied”.

		(c)	for paragraph (4) substitute—

“(4)

		(a)	Where there has been a permanent material change to the terms and conditions of a member’s employment which affect his pensionable pay in the course of a financial year, his employing authority may determine that the contribution rate to be applied in his case is not to be calculated in accordance with paragraph (2).
		(b)	In such a case, the authority shall inform the member of the contribution rate applicable to him, and the date from which it is to be applied.”

		(d)	in paragraph (6), for the words “But a term-time worker” substitute “But a whole time term-time worker”.
		(e)	in paragraph (10), at the end add “at the rate applicable to the sum of his pensionable pay in each such employment”.

6-	In regulation 5 (benefits) at the end insert—

	“(3)	Subject to paragraph (4), a member who has satisfied one of the conditions in paragraph (1) need not satisfy either of them again if he ceases to be an active member and subsequently becomes such a member again before drawing benefits under regulation 16, 17, 19, 20, 30 or 31.
	(4)	Paragraph (3) does not apply to a member in respect of whom a transfer payment has been made under regulations 79 to 82 of the Administration Regulations.”

7-	For regulation 6 (periods of membership), substitute—

“6.

These are the periods that count as periods of membership (and which may accordingly be aggregated under regulation 16, or as the case may be, 17 of the Administration Regulations)—

		(a)	any period for which a member has paid (or is treated as having paid) contributions under regulation 3;
		(b)	any period added under regulation 12 or 20; and
		(c)	any period added following a transfer in of pension rights under regulations 83 to 87 of the Administration Regulations.”.

8-	In regulation 7(5) (calculation of length of periods of membership) for the word “benefit” substitute “annual pension”.


9-	(1)	In regulation 8 (final pay: general) for paragraphs (1) and (2) substitute—

	(1)	Subject to regulations 9 to 11, a member’s final pay for an employment is his pensionable pay for as much of the final pay period as he is entitled to count as active membership in relation to that employment.
	(2)	A member’s final pay period is the year ending with the day on which he stops being an active member or, if that would produce a higher figure, either of the two immediately preceding years.”

(2)

Omit regulation 8(2A)(5).

10-	Omit regulation 9(5) (final pay: reserve forces, maternity leave etc.).
11-	For regulation 10 (final pay: reductions), substitute—

“10.

(1)	Subject to paragraph (2), where a member’s pensionable pay in a continuous period of employment is reduced because he chooses to be employed by the same employer at a lower grade or with less responsibility, he may choose to have his final pay calculated as mentioned in paragraph (3).
(2)	Paragraph (1) does not apply if the member’s employment at a lower grade or with less responsibility—

		(a)	commences before the beginning of the period of ten years ending with his last day as an active member; or
		(b)	immediately follows a period in which he occupies a post on a temporary basis.

	(3)	The calculation is made by dividing by three the member’s annual pensionable pay in any three consecutive years of his choice ending with 31st March within the period of ten years ending with his last day as an active member.
	(4)	Paragraph (1) applies to a member who has been the subject of a transfer to which the Transfer of Undertakings (Protection of Employment) Regulations 2006(6) apply as if the transferor employer were the same employer as the transferee employer.” .

12-	In regulation 18 (flexible retirement)—

		(a)	in paragraph (1), for “and the authority may pay those benefits”, substitute “and such benefits may, with his employer’s consent, be paid”.
		(b)	in paragraph (4), for “In”, substitute “Subject to paragraph (4A), in”.
		(c)	after paragraph (4), insert—

	“(4A)	Paragraph (4) only applies to a member whose employment has been continuous with that same employer throughout that period.
	(4B)	For the purposes of paragraph (4A), the employment of a member who has been the subject of a transfer to which the Transfer of Undertakings (Protection of Employment) Regulations 2006 apply shall be treated as being continuous employment with the transferee employer.”.

		(d)	for paragraph (5), substitute—

“(5)

The value of any benefits paid to a member under paragraph (1) shall be taken into account in any subsequent calculation of his benefits under regulation 16, 17, 19, 20, 30 or 31 in accordance with guidance issued by the Government Actuary.”.

13-	For regulation 20 (early leavers: ill-health) substitute—

“20.

(1)	If an employing authority determine, in the case of a member who satisfies one of the qualifying conditions in regulation 5—

		(a)	to terminate his employment on the grounds that his ill-health or infirmity of mind or body renders him permanently incapable of discharging efficiently the duties of his current employment; and
		(b)	that he has a reduced likelihood of obtaining any gainful employment before his normal retirement age,
			they shall agree to his retirement pension coming into payment before his normal retirement age in accordance with this regulation in the circumstances set out in paragraph (2), (3) or (4), as the case may be.

(1)

If an employing authority determine, in the case of a member who satisfies one of the qualifying conditions in regulation 5—

		(a)	to terminate his employment on the grounds that his ill-health or infirmity of mind or body renders him permanently incapable of discharging efficiently the duties of his current employment; and
		(b)	that he has a reduced likelihood of obtaining any gainful employment before his normal retirement age,
			they shall agree to his retirement pension coming into payment before his normal retirement age in accordance with this regulation in the circumstances set out in paragraph (2), (3) or (4), as the case may be.

(2)

If the authority determine that there is no reasonable prospect of his obtaining any gainful employment before his normal retirement age, his benefits are increased—

		(a)	as if the date on which he leaves his employment were his normal retirement age; and
		(b)	by adding to his total membership at that date the whole of the period between that date and the date on which he would have retired at normal retirement age.

(3)

If the authority determine that, although he cannot obtain gainful employment within three years of leaving his employment, it is likely that he will be able to obtain any gainful employment before his normal retirement age, his benefits are increased—

		(a)	as if the date on which he leaves his employment were his normal retirement age; and
		(b)	by adding to his total membership at that date 25% of the period between that date and the date on which he would have retired at normal retirement age.

(4)

If the authority determine that it is likely that he will be able to obtain any gainful employment within three years of leaving his employment, his benefits—

		(a)	are those that he would have received if the date on which he left his employment were the date on which he would have retired at normal retirement age; and
		(b)	unless discontinued under paragraph (8), are payable for so long as he is not in gainful employment.

(5)

Before making a determination under this regulation, an authority must obtain a certificate from an independent registered medical practitioner qualified in occupational health medicine as to whether in his opinion the member is suffering from a condition that renders him permanently incapable of discharging efficiently the duties of the relevant employment because of ill-health or infirmity of mind or body and, if so, whether as a result of that condition he has a reduced likelihood of obtaining any gainful employment before reaching his normal retirement age.

(6)

A person who receives benefits under paragraph (4) shall—

		(a)	inform the authority if he obtains employment; and
		(b)	answer any inquiries made by the authority as to his current employment status, including as to his pay and working hours.

(7)

		(a)	Once benefits have been in payment to a person for 18 months, the authority shall make inquiries as to his current employment.
		(b)	If he is not in gainful employment, the authority shall obtain a further certificate from an independent registered medical practitioner as to the matters set out in paragraph (5).

(8)

		(a)	The authority shall discontinue the payment of benefits under paragraph (4) if they consider—

			(i)	that the person is in gainful employment; or
			(ii)	in reliance on the certificate obtained under paragraph (7)(b), that he is capable of obtaining such employment
				and may recover any payment made in respect of any period before discontinuance during which they considers him to have been in gainful employment.

		(b)	The authority shall in any event discontinue the payment of benefits under paragraph (4) after they have been in payment to a person for three years.
		(c)	The authority shall forthwith notify the appropriate administering authority of any action they have taken under this paragraph.

(9)

A person in respect of whom the payment of benefits is discontinued under paragraph (8) shall be treated as a pensioner member with deferred benefits from the date the suspension takes effect, and shall not be eligible to receive benefits under paragraph (4) in respect of any future period.

(10)

If a person in respect of whom the payment of benefits is discontinued under paragraph (8) subsequently becomes an active member of the Scheme, his earlier period of active membership in respect of which benefits were paid under paragraph (4) shall not be aggregated with his later active membership.

(11)

		(a)	An authority which has made a determination under paragraph (4) in respect of a member may make a subsequent determination under paragraph (3) in respect of him.
		(b)	Any increase in benefits payable as a result of any such subsequent determination is payable from the date of that determination.

(12)

		(a)	Subject to sub-paragraph (b) and to paragraph (13), in the case of a member in part-time service, the period to be added under paragraph (2)(b) or (3)(b), as the case may be, is calculated in accordance with regulation 7(3) as if he had remained in such part-time service until his normal retirement age.
		(b)	If the certificate obtained under paragraph (5) states that, in the medical practitioner’s opinion, the member is wholly or partly in part-time service as a result of the condition that has caused him to be incapable of discharging efficiently the duties of the relevant local government employment, no account shall be taken of such reduction in his service as is attributable to that condition.

(13)

But if, in the case of a person who is a member before 1st April 2008, and who has attained the age of 45 before that date, the period to be added under paragraph (2)(b) or (3)(b) is less than the period that would have been added had regulation 28 of the 1997 Regulations applied, then his benefits are increased by adding the latter period.

(14)

In this regulation –

			“gainful employment” means paid employment for not less than 30 hours in each week for a period of not less than 12 months;
			“permanently incapable” means that the member will, more likely than not, be incapable until, at the earliest, his 65th birthday; and
			“qualified in occupational health medicine” means—

		(a)	holding a diploma in occupational medicine (D Occ Med) or an equivalent qualification issued by a competent authority in an EEA State; and for the purposes of this definition, “competent authority” has the meaning given by the General and Specialist Medical Practice (Education, Training and Qualification) Order 2003(7); or
		(b)	being an Associate, a Member or a Fellow of the Faculty of Occupational Medicine or an equivalent institution of an EEA State.

	(15)	Where, apart from this paragraph, the benefits payable to a member in respect of whom his employing authority makes a determination under paragraph (1) before 1st October 2008 would place him in a worse position than he would otherwise be had the 1997 Regulations continued to apply, then those Regulations shall have effect in relation to him as if they were still in force instead of the preceding paragraphs of this regulation.”.