Section 12 - Members buying additional LGPS pension

Regular contribution payments for APCs should commence at the start of the next available pay period after the election. However, the pension Fund requires confirmation from your OHS of the member’s current state of health before the contract commences, so payments must start after this information and the application form have been verified by Southwark Pension Services.

Following this, the regular contributions should commence unless:

• The pay and section information in the application does not match that originally supplied by you and/or the amount of pension to be purchased and/or the share of contribution to be met by you as the employer, is not the same as that in the written agreement from you. In which case - you should, within a reasonable period of time, inform the member that the application has been rejected, provide the reasons for that rejection and inform the member that they may submit a new application based on the correct information.
• Considering the member’s pay history, it suggests that the amount to be deducted per pay period cannot be reasonably deducted from the member’s pay. In which case - you should, within a reasonable period of time, inform the member that the application has been rejected, provide the reasons for that rejection and inform the member that they may submit a new application based on an amount to be paid per pay period that would be reasonable, given their pay history, or that they can submit a new election to pay by lump sum. To assist the member, you should provide a quote for the cost of buying the lost pension by lump sum in line with the details of the member’s original request.
• You take the view that spreading payments would be impracticable and request that payment is made by lump sum. In which case - you should seek agreement from the London Borough of Southwark , as the administering authority, that making deductions from payroll would be impracticable. You should, within a reasonable period of time, notify the member that payment will need to be via lump sum and provide a quote for the cost of buying the lost pension by lump sum in line with the details of the member’s original request.

If the member’s pay is reduced, or they are on no pay, see section on APC payments during absences below.

Your payroll department must ensure the additional contributions are paid, together with the normal contributions, each month to Southwark Pension Services by the 19 of the month following the deduction – they must also be recorded correctly on the monthly HK221 return.

Read Section 9 - LGPS contribution payments and returns for more.

If the member elects to pay an APC by regular deductions and subsequently has a period of:

• Sickness or injury on reduced contractual pay or no pay;
• Child related leave (ordinary maternity, adoption or paternity leave, plus paid additional maternity, paternity or adoption leave, plus unpaid additional maternity, paternity, or adoption leave);
• Absence due to a trade dispute;
• Reserve forces service leave; or
• Any other period of authorised leave of absence (including additional leave purchased by salary sacrifice).

Any APC/SCAPC contracts remain payable unless the member elects to end the contract, with the exception that during a period of sickness or injury on no pay, the member contributions to an APC/SCAPC are deemed to have been paid but the employer must continue to pay the employer contributions to a SCAPC.

It should be noted, however, that a member electing for the 50/50 section cannot continue to pay into or take out an APC arrangement or a shared cost APC arrangement, unless it is to purchase an amount of pension ‘lost due to a trade dispute’ or unpaid authorised leave of absence, including a period of unpaid additional maternity, paternity or adoption leave.

If the member is in receipt of no pay, the employer contributions to a SCAPC remain payable but the member payments due on an APC or SCAPC which cannot be collected due to zero pay, roll over as a debt to be recovered from the member’s pay when they return to work.

Any APC/SCAPC contracts remain payable during any period of absence due to a trade dispute. Although the member is in receipt of no pay for the period of the industrial action, the employer contributions to a SCAPC remain payable. The member’s payments that were due on an APC or SCAPC should be deducted if there is enough pay in the period from which to deduct the payment. Otherwise, the member’s payments that were due will roll over as a debt to be recovered from pay when the member returns to work.

Any pre-existing APC/SCAPC contracts remain payable during any other period of authorised leave of absence (including unpaid additional maternity, paternity, or adoption leave). Although the employee is in receipt of no pay, the employer contributions to a SCAPC remain payable but the employee payments that were due to an APC or SCAPC which could not be collected roll over as a debt to be recovered from pay upon return to work.

If a member leaves employment before they have finished paying for their APC, then a pro rata calculation is made to work out how much of the additional pension contract has been bought. It is not possible for a member to pay the unpaid additional contributions on leaving early.

If the member has been retired on the grounds of ill-health and has been awarded Tier 1 or Tier 2 benefits, then all contributions due on the additional contract will be deemed to have been paid and the full additional pension that was being bought will be added to their pension account.

Please note that if the member retires early due to redundancy, efficiency, or early voluntary retirement any additional pension being purchased by the member will be reduced (even though their normal benefits may be paid in full because of protection).