Section 2 - Schools converting to a new academy in the Southwark Pension Fund

There is an IDRP in two stages which deals with complaints from LGPS members. If the complaint is about an employer decision, then the employer must deal with Stage 1 of the IDRP, and you must appoint a person at your organisation to deal with such cases. Read Section 22 – Guidance for dealing with appeals - IDRP for more.

An active member who has qualifying pensionable service of two years, (and whose employment is ceased by you as a scheme employer on the grounds of ill-health or infirmity of mind or body), is entitled to early payment of a retirement pension if the member satisfies the conditions in the Regulations, at any age.

The responsibility for deciding if the member is entitled to ill-health retirement, has always and still is, with the Scheme employer (i.e. you as the member’s employer). But you cannot make a determination under the Scheme Regulations, unless you have obtained a certificate from an independent registered medical practitioner qualified in occupational health medicine.

Therefore, you must:

• Appoint an independent occupational health medical (OHM) practitioner who has to be qualified in occupational health medicine. Please contact the London Borough of Southwark Pension Fund to confirm the details of your OHM Practitioner; and
• Refer members to the OHM if you wish them to be considered for ill-health retirement and obtain a report and certificate from the independent OHM practitioner.

There are three ill-health tiers – each relating to the member’s medical condition. The first two tiers provide for additional membership being awarded to the member.

• Tier 1 applies to the more serious cases of ill-health, where the member has little prospect of obtaining gainful employment before their Normal Pension Age (NPA). Immediate benefits would be payable, and their Scheme membership would be made up to their NPA;
• Tier 2 applies to members who have little prospect of obtaining gainful employment within the next three years but are likely to be able to do so before their NPA. Immediate benefits would be payable, and their Scheme membership would be made up by 25% of their remaining service to their NPA; and
• Tier 3 applies to members who have little prospect of obtaining gainful employment straight away but are likely to be able to do so within the next three years. Immediate benefits would be payable, but there would be no award of extra membership. This award must be reviewed after 18 months and pension payments must cease after a maximum of three years.

If you decide to award a member Tier 3 ill-health retirement, then you must review the case just prior to 18 months of the pension being in payment. Read Section 19 – Guidance for dealing with ill-health retirements for more.

All employers must have a policy on their LGPS discretions, some of which are:

1. Flexible retirement;
2. Waiving of actuarial reduction; and
3. Funding of additional pension through a Shared Cost Additional Pension (SCAPC) arrangement.

Read Section 7 - Employer discretions for more.

What an employer is expected to contribute (pension contribution rate) is decided by the Fund actuary. Contribution rates are reviewed every three years, when the whole Fund is valued.

If you agree to your member receiving their pension benefits early, you are required to pay a strain cost to the Fund. This can occur in the following circumstances:

• If a member is made redundant or leaves on efficiency grounds and is age 55 or over;
• If a member is retired from age 55 on flexible retirement grounds; or
• If the employer chooses to waive a member's actuarial reduction and the member has left on flexible retirement, or chooses to voluntarily draw benefits.

Southwark Pension Services calculates the strain cost, and the cost to you as the employer depends on the member’s gender, age, and service. The strain cost must be paid as one lump sum immediately after receiving the invoice and must be paid in the same financial year the employee left your employment. Read Section 17 – Types of retirement and pension estimates for more.

If your discretions allow, you may award a member with additional pension per year. The cost of this award must be paid to the Fund immediately. If this award is given when the member is about to retire early on one of the grounds mentioned above, the additional pension will increase the strain cost. Read Section 7 - Employer discretions for more.

If there is any information you might need that only the actuary can supply, then you will be charged for the work done, such as FRS102 reports or interim valuations. If you need to use the services of the administering authority’s independent OHM practitioner, then you will be charged by them. Please note that any late payments due from an employer will incur interest. Read the Fund’s Pension Administration Strategy (PAS) for more.

When a new academy is set up, the Fund’s actuary will calculate the employer’s contribution rate together with the value of the deficit in the part of the Fund which relates to the academy. It is important to note that the deficit is retained with the academy and is reflected in the employer’s contribution rate.

Please note the amount of deficit quoted in an FRS102 valuation can be higher than from the triennial valuations, as the methodology for the calculation is done on a different basis. However, it could change depending on current bond returns.

• Write to those employees already in the LGPS, to confirm that their membership of the LGPS will continue in the same way with the academy;
• You will need to write to those eligible employees not in the LGPS at the time of transfer, to advise them that they will be contractually enrolled into the LGPS but they do have the choice to opt-out of the Scheme;
• You must formulate and publish your discretion policies in the LGPS and notify the Fund of them;
• Inform the Fund of who will be providing your payroll services and ensure that they can provide the required monthly reporting to Southwark Pension Services. Please note that the Fund can only deal directly with you as the employer and not the payroll provider;
• Confirm also, who will be responsible in providing the pension administration at your organisation – you will be provided with a contact sheet to complete and return; and
• Inform the Fund of the date of transfer/start date of the academy.

• The Fund will meet with representatives from the employer and the payroll provider, if required, to explain the roles and responsibilities of being an employer in the Fund.
• The Fund holds an annual employer forum to provided updates to any changes in the LGPS.; and
• Between the annual meetings, the Fund and Southwark Pension Services will send regular emails to employers providing information for them and their LGPS members.

• Have you been informed of your employer contribution rate?
• Has Southwark Pension Services confirmed your employer number?
• Have you informed your payroll provider of the employer and employee contribution rates?
• Have you forwarded instructions on how to pay over employer and employee pension contributions to your payroll provider, along with the deadlines?
• Have you informed the Fund of your payroll provider?
• Have you informed the Fund of the date of set up of the academy along with a list of staff transferring to you?
• Have you completed and submitted a starter form for each eligible employee?
• Have you completed the employer contact details form and sent it to the Fund?
• Have you nominated a ‘Stage 1 adjudicator’ for the Internal Dispute Resolution Procedure (IDRP) and returned the completed IDRP nomination form to the Fund?
• Have you formulated and published your employer discretions policy and sent a copy to the Fund?