Section 6 - Employer and administering authority responsibilities in the LGPS

The employer must:

• Deal with applications to join, re-join or leave the LGPS;
• Determine employee eligibility for membership and automatically or contractually enrol staff when appropriate;
• Determine which pay is pensionable and decide the contribution rate applicable based upon the member’s actual Pensionable Pay;
• Deal with applications relating to members election to join the 50/50 section of the LGPS;
• Deduct the correct employee and employer contributions and pay these to the Fund;
• Refund contributions through payroll for any member who opts out of the LGPS within three months of joining;
• Have the discretion to set up a Shared Cost Additional Voluntary Contribution (SCAVC) arrangement and deal with elections to participate;
• Receive elections to pay, or amend, additional contribution contracts via APC, or a member’s election to buy back lost pension relating to absence, and notify the administering authority;
• Deduct AVC contributions and pay to the relevant provider;
• Retain up to 13 years’ pay records to allow correct calculation of final pay;
• Calculate final Pensionable Pay;
• Provide data for bulk transfers of staff to when letting contracts to outsourced providers (TUPE);
• Formulate and publish policies on the exercise of certain discretions and make decisions and review these as appropriate;
• Make decisions about other discretions which do not require a published policy;
• Consider increasing the pension of an active member and pay the appropriate contribution to the Fund.

The employer must:

• Complete a leaver form confirming the reason for leaving. The reason stated on the form will indicate the type of the member is entitled to;
• When appropriate, arrange for an Independent Registered Medical Practitioner (IRMP) to provide an opinion about whether a member should be retired on the grounds of ill-health;
• Decide if the member should be awarded ill-health retirement based on all evidence available;
• Review ‘Tier 3’ ill-health retirement awards and notify the administering authority of the outcome;
• Make decisions on member applications for early payment of benefits, or unreduced benefits;
• Pay any strain cost arising from these decisions into the Fund;
• Decide whether membership rights should be forfeited;
• Decide whether to recover any monetary obligation from the Fund where forfeiture applies; and
• Deal with applications for early payment of deferred benefits based on the Regulations in force/applicable.

• Any decisions/actions arising out of the Local Government (Discretionary Payments) Regulations 1996 and/or the Local Government Compensation Regulations 2006;
• Compensation for redundancy (for under or over 55s);
• Injury allowances;
• Gratuities;
• Redundancy payments under the Employment Rights Act 1996;
• Teachers’ Pension Scheme;
• Teachers’ (Compensation for Redundancy and Premature Retirement) Regulations 1997; and
• NHS Pension Scheme.

It is a legal requirement for each employer to supply necessary information at the appropriate time to the administering authority as it requires for discharging its Scheme functions. Failure to fulfil the statutory obligations could result in substantial fines by TPR.

Regulations also allow the administrating authority to impose financial penalties on an employer if it feels that the authority has incurred any additional costs due to the employer failing to meet its responsibilities under the scheme – this is called Regulation 70 of the LGPS Regulations 2013. Regulation 70 particularly applies where employers have not provided information as required under Regulation 80 to the administering authority, within the required timescales.

Expected standards of employer’s performance are outlined in the Fund’s Pensions Administration Strategy (PAS).

• Decide on the amount of benefit due to a member;
• Decide which periods of previous pensionable service count;
• Approve the IRMP used by the employer in ill-health retirement cases;
• Decide if deferred benefits can be paid early where the member’s former employer is no longer a Scheme employer;
• Publish a written policy on abatement to benefits and apply those rules; and
• Publish policy statements on governance, funding strategy and communications.

Provide employers with admission agreements (schedule 2, part 3) and set up a separate admission agreement fund, if desired.

1. Decide the intervals at which contributions are paid and may demand interest for overdue payments;
2. Arrange for a valuation of the fund to happen every three years; and
3. Agree increased contributions to be paid by an employer under Regulation 64 (where the employer is likely to become an exiting employer, for example).

• Decide to whom a death grant should be paid; and
• Have the discretion to re-instate a child’s pension by treating education as continuous despite a break.

• Receive transfer value payments into the Scheme and advise the member of the relevant service credit;
• Arrange for transfers-out of the Scheme or between Funds; and
• Arrange for bulk transfers-out in certain circumstances.

• Exercise their discretion on whether to require a satisfactory medical before allowing an employee to enter an APC contract;
• Deal with requests to convert AVCs into Scheme benefit;
• Prepare calculations, receive elections to buy additional pension (APC); also, to allow for cessation of payment of APCs and other additional contributions such as added years/ARCs, and to capitalise the contracts on redundancy; and
• Can refuse payment of APCs over a period of time if the monthly payment is too small.

• Receive elections for extra lump sum in lieu of pension;
• Receive elections to combine benefits;
• Receive elections to use final pay periods other than the last 365 days;
• Have the discretion to commute a pension as being trivial; and
• Pay refunds (with interest where appropriate) for members who leave the LGPS with more than three months but less two years’ membership.

• Must have a process in place for appeals under the Internal Dispute Resolution Procedure (IDRP);
• May appeal against the employer’s failure to make a decision;
• Must formulate and keep under review policies on the exercise of certain discretions; and
• Must exchange information with employers.

Issue a benefit statement to active and deferred members by 31 August each year.

Decide the entitlement of pension debit/credit members.