1.The Committee has requested a memorandum on the following points:
Clarify the intended modifying effect of sub-paragraphs (ii) and (iii)(aa) of regulation 4(a).
2.These amendments relate to regulation D11 of the Local Government Pension Scheme Regulations 1995 (S.I. 1995/1019) (“the 1995 Regulations”) as preserved by the Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014 (S.I. 2014/525) (“the 2014 Regulations”). Regulation D11 makes provision for deferred entitlement to retirement benefits for members of the scheme established under the 1995 Regulations where they cease to hold a local government employment before they are entitled to retirement benefits under that scheme.
3.The 1995 Regulations were revoked by paragraph 1 of Schedule 1 to the 2014 Regulations. Regulation 3(1) of the 2014 Regulations preserves the effect of regulation D11 in respect of membership accrued in the scheme established under the 1995 Regulations in respect of service before 1st April 2014, the pension rights accrued at that date, and any rights and obligations imposed on any person under that scheme in relation to service before 1st April 2014.
4.Regulation 4(a) substitutes regulation 3(5A)(a) of the 2014 Regulations in order to modify the effect of regulation D11 of the 1995 Regulations as it is preserved.
5.Substituted regulation 3(5A)(a)(ii) of the 2014 Regulations modifies the effect of regulation D11(2)(d) of the 1995 Regulations to enable a member of the Scheme established by the 1995 Regulations who left active membership prior to 1st April 1998 (deferred members), to elect for voluntary early payment of their pension benefits prior to their normal retirement date from age 55, rather than from age 60.
6.This amendment brings the 1995 Scheme in line with all other Local Government Pension Schemes and Government policy on choice in accessing pension benefits. It means that deferred members may take their accrued benefits from age 55 (subject to actuarial reduction for early payment) without the consent of their former employer. The pension they receive is actuarially reduced so that there is no cost to the employer from their benefits coming into payment earlier.
7.Substituted regulation 3(5A)(a)(iii)(aa) of the 2014 Regulations modifies the effect of regulation D11(2)(d) of the 1995 Regulations in respect of the provision by a deferred member of written notice of their choice to receive voluntary early payment of their pension benefits prior to their normal retirement date. As modified, the written notice is provided to the administering authority of the scheme established by the 1995 Regulations, instead of the employing authority.
8.As there is no cost to the former scheme employer where someone exercises their right to early payment, the Government believes that it is more efficient and appropriate for the deferred member to make their application directly to the administering authority as the body which arranges payment. In addition, some of the former scheme employers may have ceased to exist, changed name or be for another reason hard for a deferred member to contact. As all deferred members should receive an annual benefit statement from their administering authority, members should have up to date contact details for them.
Ministry of Housing, Communities and Local Government
29 January 2019
Published: 8 February 2019