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United Kingdom Statutory Instruments |
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You are here: BAILII >> Databases >> United Kingdom Statutory Instruments >> The Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2007 No. 1166 URL: http://www.bailii.org/uk/legis/num_reg/2007/20071166.html |
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| Made | 3rd April 2007 | ||
| Laid before Parliament | 4th April 2007 | ||
| Coming into force | 1st April 2008 |
Active members
2.
—(1) An employee of a body listed in—
the 1997 Regulations is an active member of the Scheme.
(2) But a person is not an active member unless he is employed under a contract of employment of more than three months' duration.
(3) An active member of the 1997 Scheme is an active member of the Scheme for as long as he continues in Local Government Pension Scheme employment.
Contributions payable by active members
3.
—(1) Subject to paragraph (9), each active member shall make contributions to the Scheme at the contribution rate from his pensionable pay in each employment in which he is an active member.
(2) Subject to paragraph (4), the contribution rate to be applied to his pensionable pay in any financial year is calculated on the basis of his pensionable pay in the previous financial year in accordance with the following table.
| Band | Range | Contribution rate |
| 1 | £0-£12,000 | 5.5% |
| 2 | £12,001-£14,000 | 5.8% |
| 3 | £14,001-£18,000 | 5.9% |
| 4 | £18,001-£30,000 | 6.5% |
| 5 | £30,001-£40,000 | 6.8% |
| 6 | £40,001-£75,000 | 7.2% |
| 7 | More than £75,000 | 7.5% |
(2) But an employee's pensionable pay does not include—
(3) No sum may be taken into account in calculating pensionable pay unless income tax liability has been determined on it.
Benefits
5.
—(1) Membership of the Scheme only entitles the member to benefits under these Regulations if—
(2) But paragraph (1) does not apply to benefits in respect of a member under regulation 23 (death grants: active members), regulation 24 (survivor benefits: active members), or regulation 28 (children's pensions: active members).
Periods of membership
6.
—(1) These are the periods which count as periods of membership—
(2) Where a member who has left local government employment rejoins such employment before his normal retirement age, the periods mentioned in paragraph (1) are (unless he chooses otherwise) aggregated with any such subsequent periods.
Calculation of length of periods of membership
7.
—(1) In calculating the length of a period of membership, fractions of years of membership count.
(2) The numerator of such fractions is the number of complete days of membership and the denominator is 365.
(3) Membership in part-time service is counted as the appropriate fraction of the duration of membership.
(4) The numerator of that fraction is the number of contractual hours during the part-time service and its denominator is the number of contractual hours of that employment if it were on a whole-time basis.
(5) The amount of any benefit payable to a member as a result of his membership is his total period of membership multiplied by his final pay and divided by 60.
Final pay: general
8.
—(1) Subject to regulations 9 to 11, a member's final pay for an employment is his pay for as much of the final pay period as he is entitled to count as active membership in local government employment.
(2) A member's final pay period is the year ending with the day on which he stops being an active member.
(3) In the case of part-time employment, the final pay is the pay that would have been paid for a single comparable whole-time employment.
(4) Any reduction or suspension of a member's pensionable pay during the final pay period because of his absence from work owing to illness or injury is disregarded.
Final pay: reserve forces, maternity leave etc.
9.
—(1) If a member's final pay period includes reserve forces service leave, his final pay is—
(2) For the purposes of these regulations, a member's final pay for any period of maternity, paternity or adoption absence during the final pay period in respect of which he pays or is treated as paying contributions is the pay he would have received had he not been absent.
(3) If a member is absent from work for any other reason during his final pay period, he is only to be treated for these regulations as having received the pensionable pay he would otherwise have received if he has continued to pay contributions in respect of it for the period he is absent.
(4) If a member is only entitled to count part of the year specified in regulation 8(2) as a period of active membership in relation to the employment which he ceases to hold, his final pay is his pensionable pay during that part multiplied by 365 and divided by the number of days in that part.
(5) Final pay does not include any pension in payment.
Final pay: reductions
10.
—(1) —A member who is in whole-time employment and whose pensionable pay has been reduced because he has chosen to continue in local government employment at a lower grade or with less responsibility than his previous post may, subject to paragraph (3), choose to have his final pay calculated as the average of his annual pensionable pay in any three consecutive years ending 31st March within the period of ten years ending with the last day he was an active member.
(2) And the average referred to in paragraph (1) is increased as if it were a pension to which the Pensions (Increase) Act 1971 applies.
(3) A member who has had a request under regulation 18 granted may not choose under paragraph (1) in respect of the same event.
Final pay: fees
11.
—(1) Subject to paragraph (2), where a variable-time employee's pensionable pay for the purposes of regulation 8(1) consists of or includes fees, his final pay is calculated as the sum of—
(2) But a member's employer may consent to him having his final pay calculated as the average of all such fees for any three consecutive years ending 31st March within the period of ten years ending with the last day he was an active member.
Power of employing authority to increase total membership of active members
12.
—(1) An employing authority may resolve to increase the total membership of an active member.
(2) A member's total additional membership under this regulation (including additional membership in respect of different employments) must not exceed 10 years.
Power of employing authority to award additional pension
13.
—(1) An employing authority may resolve to award a member additional pension of not more than £5000 a year payable from the same date as his pension payable under any other provisions of these Regulations.
(2) Additional pension may be paid in addition to any increase of total membership resolved to be made under regulation 12.
Election in respect of additional pension
14.
—(1) A member may choose to pay additional contributions in order to be credited with additional pension, in respect of him alone or in respect of him and any survivor, of £250 a year or multiples thereof to a maximum of £5000.
(2) If he chooses to take the additional pension referred to in paragraph (1) earlier or later than his normal retirement age, it is reduced or, as the case may be, increased.
(3) The amount of the additional contributions to be paid under paragraph (1), and the reduction or increase referred to in paragraph (2), is calculated in accordance with guidance issued by the Government Actuary.
Elections to pay AVCs
15.
—(1) A member who has entered into an arrangement to pay additional voluntary contributions ("AVCs") or to contribute to a shared cost AVC in addition to any other contributions he may pay under these Regulations is entitled to additional benefits in accordance with one of the methods permissible under the Finance Act 2004.
(2) Where a member chooses to take some or all of the benefits referred to in paragraph (1) in the form of a lump sum, that sum forms part of the total amount referred to in regulation 21(2).
(3) In this regulation, "a shared cost AVC" means an arrangement established and maintained by an employing authority for the purpose of enabling contributions to be paid by and for active members.
Retirement benefits
16.
—(1) A member who has attained the Scheme's normal retirement age and ceases to be employed in local government pension scheme employment is entitled to immediate payment of retirement pension without reduction.
(2) The normal retirement age of the Scheme is 65.
Retirement after the normal retirement date
17.
—(1) A member who remains in employment after his 65th birthday is entitled to a pension when he retires from service.
(2) His pension rights accrued at that date, and any rights accruing between that date and the date of his retirement or the day before his 75th birthday, whichever is earlier, shall be enhanced in accordance with guidance issued by the Government Actuary.
(3) The pension is payable immediately on retirement.
(4) But it must begin to be paid not later than the day before the member's 75th birthday even if he has not retired.
Flexible retirement
18.
—(1) A member who has attained the age of 55 and who, with his employer's consent, reduces the hours he works, or the grade in which he is employed, may make a request in writing to the appropriate administering authority to receive all or part of his benefits under these Regulations, and the authority may pay those benefits to him notwithstanding that he has not retired from that employment.
(2) If the payment of benefits referred to in paragraph (1) takes effect before the member's 65th birthday, the benefits payable are reduced in accordance with guidance issued by the Government Actuary.
(3) But the employer may agree to waive, in whole or in part, any such reduction as is referred to in paragraph (2).
(4) In the case of a person who is a member on 31st March 2008, and who makes a request before 31st March 2010, paragraph (1) applies as if "the age of 50" were substituted for "the age of 55".
(5) Where a member is receiving benefits under this regulation, the period of membership used to calculate those benefits is not taken into account in any subsequent calculation of such benefits to which he is entitled under these Regulations.
Early leavers: inefficiency and redundancy
19.
—(1) Where—
he is entitled to immediate payment of retirement pension without reduction.
(2) In the case of a person who is a member on 31st March 2008, and to whom paragraph (1) applies before 31st March 2010, that paragraph applies as if "the age of 50" were substituted for "the age of 55".
Early leavers: ill-health
20.
—(1) If an employing authority determines, in the case of a member who has at least two year's total membership—
they shall pay him benefits under this regulation.
(2) If the authority determine that there is no reasonable prospect of his obtaining gainful employment before his normal retirement age, his benefits are increased—
(3) If the authority determine that, although he cannot obtain gainful employment within a reasonable period of leaving local government employment, it is likely that he will be able to obtain gainful employment before his normal retirement age, his benefits are increased—
(4) In the case of a member in part-time service, the period to be added under paragraph (2)(b) or (3)(b), as the case may be, is calculated in accordance with regulation 7(3) as if he had remained in such part-time service until his actual normal retirement age.
(5) But if, in the case of a person who is a member before 1st April 2008, and—
(8) In this regulation, "gainful employment" means paid employment for not less than 30 hours in each week for a period of not less than 12 months.
Election for lump sum in lieu of pension
21.
—(1) A member in respect of whom a benefit crystallisation event within the meaning of the Finance Act 2004 occurs on or after 1st April 2008 may choose in writing to the appropriate administering authority before any benefits become payable to commute his pension, or a part thereof, at a rate of £12 for every £1 of annual pension entitlement surrendered .
(2) But the total amount of the member's commuted sum, including any sum received as benefits provided in the form of a lump sum in accordance with regulation 15 shall not exceed 25% of the capital value of his accrued rights.
(3) For the purposes of this regulation, a member's accrued rights include rights accrued in respect of any payments made by or for him in accordance with the 1997 Regulations.
(4) The capital value of a member's accrued rights shall be calculated in accordance with guidance issued by the Government Actuary.
(5) And for the purposes of paragraph (1), a member's pension is his pension after any reduction pursuant to regulation 18 or 30.
Limit on total amount of benefits
22.
—(1) A member and any dependent of his shall not be entitled, under any provision of these Regulations, to receive benefits the capital value of which exceeds his lifetime allowance increased, where applicable, by his primary protection or his enhanced protection except in accordance with guidance issued by the Government Actuary.
(2) In this regulation, "lifetime allowance", "primary protection" and "enhanced protection" are to be construed in accordance with section 218 of, and Schedule 36 to, the Finance Act 2004[6].
(3) Any calculation of the capital value of a member's benefits for the purposes of this or any other of these Regulations is to be carried out in accordance with guidance issued by the Government Actuary.
(4) The appropriate administering authority is responsible for deducting from any payment of benefits under the Scheme any tax to which they may become chargeable under the Finance Act 2004.
Death grants: active members
23.
—(1) If an active member dies, a death grant is payable.
(2) The appropriate administering authority at their absolute discretion may make payments in respect of the death grant to or for the benefit of the member's nominee or personal representatives, or any person appearing to the authority to have been his relative or dependant at any time.
(3) The death grant is his final pay multiplied by 3.
(4) But in calculating death grant in respect of a part-time employee, actual pensionable pay in part-time employment is to be used.
(5) If the administering authority have not made payments under paragraph (1) equalling in aggregate the member's death grant before the expiry of two years beginning with his death, they must pay an amount equal to the shortfall to the member's personal representatives.
Survivor benefits: active members
24.
—(1) If a member dies leaving a surviving spouse, nominated cohabiting partner or civil partner, that person is entitled to a pension.
(2) The pension is calculated by multiplying his total membership, augmented as if Regulation 20(2) applied, by his final pay and divided by 160.
(3) If there is more than one surviving spouse, they become jointly entitled in equal shares under paragraph (1).
Meaning of "nominated cohabiting partner"
25.
—(1) "Nominated cohabiting partner" means a person nominated by a member in accordance with the terms of this regulation.
(2) A member (A) may nominate another person (B) to receive benefits under the Scheme by giving to his administering authority a declaration signed by both A and B that the condition in paragraph (3) has been satisfied for a continuous period of at least 2 years which includes the day on which the declaration is signed.
(3) The condition is that—
(4) But a nomination has no effect if the condition in paragraph (3) has not been satisfied for a continuous period of at least 2 years which includes the day on which the declaration is signed.
(5) A nomination ceases to have effect if—
(6) B is A's surviving nominated partner if—
(7) For the purposes of this regulation, two people of the same sex are to be regarded as living together as if they were civil partners if they would be regarded as living together as husband and wife if they were not of the same sex.
Meaning of "eligible child"
26.
—(1) The child of a deceased member is an eligible child if he falls within the meaning of "dependant" for the purposes of Part 2 of Schedule 28 to the Finance Act 2004 as modified by regulation 34 of the Taxation of Pension Schemes (Transitional Provisions) Order 2006[7]
(2) But a child who was born on or after the first anniversary of the date of the deceased's death is not an eligible child.
(3) If an appropriate administering authority wish—
Children's pensions
27.
—(1) If a member dies leaving one or more eligible children, they are entitled to a children's pension.
(2) The pension is payable from the death.
(3) An eligible child ceases to be entitled to a pension when he ceases to be a child within regulation 26.
(4) The amount of that pension is calculated in accordance with regulation 28, 34 or 37, as the case may be.
Children's pensions: active members
28.
—(1) The amount of the pension of an eligible child of a deceased active member is calculated as follows.
(2) If a survivor benefit is payable under regulation 24—
(3) If no survivor benefit is payable under regulation 24—
Calculation on leaving early
29.
—(1) This regulation applies in the case of a member who leaves local government employment and is not entitled to immediate payment of retirement pension under any of regulations 16 to 20.
(2) His entitlement to benefits that would, apart from any other provision of these Regulations, become payable on his attaining normal retirement age, is calculated in accordance with regulation 7 as at the date of his leaving such employment.
(3) But that entitlement is extinguished if an aggregation takes place under regulation 6(2) or if a transfer out takes place under regulations 116 to 118 of the 1997 Regulations.
Choice of early payment of pension
30.
—(1) If a member leaves a local government employment before he is entitled to the immediate payment of retirement benefits (apart from this regulation), once he has attained the age of 55 he may choose to receive payment of them immediately.
(2) A choice made by a member aged less than 60 is ineffective without the consent of his employing authority or former employing authority (but see paragraph (6)).
(3) If the member so chooses, he is entitled to a pension payable immediately.
(4) His pension must be reduced by the amounts shown as appropriate in guidance issued by the Government Actuary.
(5) A member's employing authority may determine on compassionate grounds that his retirement pension and grant should not be reduced under paragraph (4).
(6) In the case of a person who is a member on 31st March 2008, and who makes an election before 31st March 2010, paragraph (1) applies as if "the age of 50" were substituted for "the age of 55".
Early payment of pension: ill-health
31.
—(1) Subject to paragraph (2), if a member who has left a local government employment before he is entitled to the immediate payment of retirement benefits (apart from this regulation) becomes permanently incapable of discharging efficiently the duties of that employment because of ill-health or infirmity of mind or body—
(2) If a member does not request immediate payment under this regulation, he is entitled to receive a pension without reduction, payable from his normal retirement age.
Death grants: deferred members
32.
—(1) If a deferred member dies, a death grant is payable.
(2) The administering authority at their absolute discretion may make payments in respect of the death grant to or for the benefit of the member's nominee or personal representatives, or any person appearing to the authority to have been his relative or dependant at any time.
(3) The death grant is his retirement pension multiplied by 5.
(4) If the administering authority have not made payments under paragraph (1) equalling in aggregate the member's death grant before the expiry of two years beginning with his death, they must pay an amount equal to the shortfall to the member's personal representatives.
Survivor benefits: deferred members
33.
—(1) If a deferred member dies leaving a surviving spouse, nominated cohabiting partner or civil partner, that person is entitled to a pension.
(2) The pension is calculated by multiplying his total membership by his final salary and divided by 160.
(3) If there is more than one surviving spouse, they become jointly entitled in equal shares under paragraph (1).
Children's pensions: deferred members
34.
—(1) The amount of the pension of an eligible child of a deceased deferred member is calculated as follows.
(2) If a survivor benefit is payable under regulation 33—
(3) If no survivor benefit is payable under regulation 33—
Death grants: pensioner members
35.
—(1) If a pensioner member dies before his 75th birthday, a death grant is payable.
(2) The administering authority at their absolute discretion may make payments in respect of the death grant to or for the benefit of the member's nominee or personal representatives, or any person appearing to the authority to have been his relative or dependant at any time.
(3) The death grant is his pension multiplied by 10, but the amount so calculated is reduced by the amounts of any retirement pension paid to him.
Survivor benefits: pensioners
36.
—(1) If a pensioner member dies leaving a surviving spouse, nominated cohabiting partner or civil partner, that person is entitled to a pension.
(2) The pension is calculated by multiplying his total membership by his final salary and divided by 160.
(3) If there is more than one surviving spouse, they become jointly entitled in equal shares under paragraph (1).
Children's pensions: pensioner members
37.
—(1) The amount of the pension of an eligible child of a deceased pensioner member is calculated as follows.
(2) If a survivor benefit is payable under regulation 36—
(3) If no survivor benefit is payable under regulation 36—
Pension increases under the Pensions (Increase) Acts
38.
Where a pension to which the Pensions (Increase) Act 1971 applies is payable out of an appropriate fund, any increase under that Act or the Pensions Increase Act 1974 must be paid from that fund.
Commutation: small pensions
39.
A lump sum which is a trivial commutation lump sum within the meaning of section 166 of the Finance Act 2004 or a trivial commutation lump sum death benefit within the meaning of section 168 of that Act may be paid in accordance with the rules relating to the payment of such benefits under the Finance Act 2004.
Guidance on future costs
40.
Administering and employing authorities shall have regard to guidance to be issued by the Secretary of State, before 31st March 2009, as to the manner in which the costs of the Scheme will be met after 31st March 2010.
Signed by authority of the Secretary of State
Angela Smith
Parliamentary Under Secretary of State Department for Communities and Local Government
3rd April 2007
[2] The Secretary of State's functions under section 7 of the Superannuation Act 1972 in so far as they were exercisable in relation to Scotland were devolved to Scottish Ministers by section 63 of the Scotland Act 1998 (1998 c. 46) and article 2 of, and Schedule 1 to, the Scotland Act 1998 (Transfer of Functions to Scottish Ministers etc) Order 1999 (S.I. 1999/1750).back
