Q Who can join the LGPS?A Entry to the LGPS is automatic for employees holding a contract of at least 3 months duration, unless a request has been made in writing not to join. You can choose to opt out of the LGPS at a later date. Casual employees are not automatically entered in the pension scheme but can request to join the scheme. Q Will the contribution rate remain the same each year?A The band ranges are increased each April in line with rises in the Consumer Price Index (formerly Retail Price Index), therefore the contribution rate payable may change each year. Q What is the minimum period of time an employee must be in the scheme to receive benefits?A An employee leaving before age 65 only needs to be a member of the Scheme for 3 months, or have brought in a transfer from another pension scheme in order to qualify for a pension.Q Do employers match the contribution rate of their employees?A An employer pays the balance of the cost of providing benefits after taking into account investment returns. The employer's rate contribution rate is set following a valuation of the Pension Fund by an actuary every three years. While the amount will vary, generally the underlying assumption up till now has been that for benefits accruing in respect of future services an employee will contribute just under one third of the scheme's costs and the employer will contribute the remainder. So the employer would contribute slightly over double what the employee pays. In many cases, however, the employer's contribution is currently much more than this to cover the increasing cost of provding the benefits. Q Can an employee work after their state pension age?A If your employee continues to work after their state pension age they will remain a member of the LGPS and continue to accrue further membership in the LGPS. They are not allowed to remain in the scheme from age 75.Q How are pension scheme benefits calculated?A Pension benefits are calculated using membership in the LGPS and final pay (the last 365 days ending with the date of retirement)Membership prior to 01.04.2008 using 1/80 accrual rateMembership after 01.04.2008 using 1/60 accrual rate Membership after 01.04.2014 using 1/49 accrual rate Q What retirement options are available?A If an employee is over the age of 55, they can retire with the consent of the employer on early retirement, redundancy and flexible retirement grounds, and receive immediate payment of their pension benefits. The retirements will only be allowed subject to the policy and approval of the employer by completion and authorisation of all necessary forms. Ill health retirement can be from any age, but the employee must be medically certified as being permanently unable to perform the duties of their employment and unlikley to obtain any other gainful employment before age 65. Depending upon the Tier of Ill Health benefits awarded, enhancements of service could apply.
LGPS Early Payment of Deferred Benefits
Award of Deferred Benefits Where an employee leaves the Council without the immediate payment of retirement benefits, they are awarded deferred benefits by the West Yorkshire Pension Fund (WYPF).The deferred benefits are calculated by reference to the employees length of membership in the LGPS to 31 March 2014, and their final pensionable pay up to the date of leaving and the value of their Care Average Revalued Earnings (CARE) pension from 1 April 2014 onwards.WYPF will issue a deferred benefits statement to the employee, outlining their membership information and the pension and lump sum (if applicable) that will become payable at normal retirement date. Normal retirement date in LGPS 2014 is equivalent to an employees State Pension Age, but could be earlier depending upon any protections carried forward from earlier LGPS Regulations.Circumstances for consideration The deferred benefits statement from WYPF outlines under what circumstances the deferred benefits can be brought into payment earlier than normal retirement age. This will include:Ill health grounds - subject to appropriate medical clearance following certification by an Independent Registered Medical Practitioner (IRMP), irrespective of age and date of leaving.Compassionate grounds from age 55 onwards for leavers up to 31 March 2014Deferred members who left the LGPS before 1 April 2008 can still make an application for the early payment of deferred benefits from age 50 onwards. However under HMRC rules such payments would be classed as ‘unauthorised’ and would be subject to additional punitive tax charges.Ill Health Grounds Regulation 38 LGPS Regulations 2013Regulation 31 LGPS Benefit Regulations 2007Regulation 31 (6) LGPS Regulations 1997Process An application for early payment on health grounds is made to the Pensions Team.A medical appointment is made for the ex-employee to attend for a medical examination with Occupational Health. The IRMP will be asked to complete form DBM (the equivalent of a medical certificate of permanent incapacity for deferred members).An assessment will be made as to whether the ex-employee would be deemed to be, on the balance of probabilities permanently incapable of discharging efficiently the duties of the former employment because of ill health or infirmity of mind or body and that they have a reduced likelihood of undertaking any gainful employment within 3 years of the date of application, or normal pension age if earlier. The assessment will be based upon medical examination and any supporting medical evidence available at the time.Where the ex-employee is under the age of 55, the IRMP would also have to make an assessment as to whether the ex-employee was permanently incapable of engaging in any regular full-time employment. This is for index linking purposes only and will not apply where the ex-employees age is 55 or over at the time of the application.If the opinion of the IRMP declares the ex-employee to be permanently incapable, WYPF will be instructed to bring the deferred benefits into payment on the grounds of ill health from the date the initial application was received by the Council.The deferred benefits are paid without any enhancements being applied to them.Costs of early payment There is no early payment cost for the employer in these cases. Any costs will be picked up via the valuation process as is the case for ill health retirements from current employment, and any adjustments made to the employers contribution rate (if necessary).Compassionate groundsRegulation 30(2) and 30(5) of the LGPS Benefits Regulations 2007 andRegulation 31(2) and Regulation 31(5) of the LGPS Regulations 1997Process Applies to leavers prior to 1 April 2014.Application is made by the ex-employee to the Pensions Team.The ex-employee is asked to provide financial and other relevant information to back up their request.Any early payment costs are requested from WYPF.Information is then considered by the Pensions Advisor and HR Business Partner who will make recommendations to the Corporate Director who will determine whether the request should be approved.Cost In most cases there will be an early payment cost which the Council would have to pay to WYPF to release the pension payments. However the Council could choose to agree to the payment of the benefits on a reduced basis resulting in no cost to the Council.Policy statement The Council will consider applications made under this Regulation having regard to the particular circumstances surrounding each case. Decisions will be made on the merits of each case having particular regard to:The Council's ability to meet the cost of granting such a requestThe ex-employees personal circumstances.Applications for the payment of unreduced benefits on the grounds of compassion will be granted if:In the Council’s sole opinion, the special extenuating circumstances surrounding the application, along with the supporting evidence provided justify approval, andThe Council can meet the cost of granting such a request.
LGPS Contribution Pay Bands 2019/2020
The contributions that employees pay are based on actual pensionable pay. If they are paid non-contractual overtime they will pay contributions on this too.Member contribution rate table from April 2019 PAY EMPLOYEE CONTRIBUTION RATE Up to £14,400 5.5%£14,401 to £22,500 5.8%£22,501 to £36,500 6.5% £36,501 to £46,200 6.8% £46,201 to £64,600 8.5% £64,601 to £91,500 9.9% £91,501 to £107,700 10.5% £107,701 to £161,500 11.4% £161,500 or more 12.5%
Teachers Pensions Overview
From 1 April 2015 the Teachers Pension Scheme arrangements changed to career average for new entrants on and after this date. Members of the pension arrangements who were active members immediately before 01/04/2012, and were within 10 years of their Normal Pension Age (NPA) on that date – they will remain in the final salary arrangements. These will be known as Full Protection members Those members who were active members immediately before 01/04/2012 and were within a further 3 years and 5 months of their NPA on that date – will remain in the final salary arrangements for a tapered period of time until they move into the career average arrangements on their transition date. These will be known as Tapered Protection Members. All other existing members of the Teachers Pensions arrangements will have no protection and will move directly into the career average arrangements from 01/04/2015. Members in the career average scheme can elect for one of the new flexibilities. Faster Accrual – members can pay higher contributions to increase the growth in their pension from 1/57th to either 1/45th, 1/50th or 1/55th. Buy Out – members are able to pay additional contributions that will allow them to retire either 1, 2 or 3 years before their NPA. Information about changes to the pension arrangements is available on the Teachers Pensions website using the link below; https://www.teacherspensions.co.uk/reform/public/reform-home.aspx Available here is lots of useful information including fact sheets and FAQ’s, information about applying for flexibilities such as Faster Accrual and Buy Out of Actuarial Adjustment, together with on-line calculators and videos about the changes. To ensure that teachers are able to access the most up-to-date information they are advised to sign up to My Pensions online. This facility provides the ability to complete a range of tasks including checking annual benefit statements and updating personal details so that pensions accounts can be managed easily and effectively. Further information on how to set up an account can be accessed using the following link; www.teacherspensions.co.uk