JB Future LGPS Changes.ppt

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Employers Forum 4th July 2006
Future Local Government Pension Scheme Changes

John Briscoe Technical Pensions Manager Norfolk
Pension Fund

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Local Government (Early Termination of
Employment) (Discretionary Compensation)
(England and Wales) Regulations 2006

• Consultation Draft -
• Published 8 May 2006
• Comments by 31 July 2006
• Implementation Date of 1 October 2006

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Proposal to Replace Discretion to Award Added
Years WithPower to Compensate Staff
whose Employment is Terminated Early with a Lump
Sum Payment not exceeding Two Years Pay



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Policy Statements

• Each Employing Authority must have and publish
  a Policy
• In formulating the Policy regard must be had
  to-
• The extent to which the exercise of discretionary
  powers, unless properly limited, could lead to
  serious loss of confidence in the public service,
• and
• Be satisfied that the policy is workable,
  affordable and reasonable, having regard to the
  foreseeable costs

5
The Local Government Pension Scheme
(Amendment)(No 2) Regulations 2006

• Consultation Draft published 26 May 2006
• Comments required by 3 July 2006
• Coming into force 1 October 2006

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Further Protection for Members following the
removal of the Rule of 85
Current legislation, as provided by the LGPS
(Amendment) Regulations 2006, gives protection
for members who will be 60 and satisfy the rule
of 85 by 31 March 2013, all other members would
have an actuarial reduction applied to their post
30 September 2006 benefits if they left before
age 65


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Proposals

• Protection for all Staff until 31 March 2008
• Extension of Protection for over 60 from
• 31 March 2013 to 31 March 2016
• Additional protection for members retiring
  between
• 1 April 2016 and 31 March 2016 by way of
  phasing in
• of reduction

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Other Proposals to Clarify and Correct changes
introduced in April 2006

• Tax Free Lump (25 of Capital Value)
• Capital value of benefits includes both LGPS
  and
• AVC values -
• All of AVC can be used to fund additional
  Lump Sum
• Clarification of apportionment of membership
• for Class A members
• Payments of Amounts above Life Time Allowance
  (LTA)

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Flexible Retirement

• The current regulations only require Employers
  
• consent to a reduction in hours or grade
  proposed
• That in addition Employers consent is also
  required
• for payment of benefits

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ADMINISTRATION REGULATIONS -PROPOSALS



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Background
The regulations confer numerous functions and
responsibilities on Administering Authorities
and Scheme Employers
however Very little is set out in regulatory
form about how these functions are carried out
and to what standard
this results in A wide discrepancy in the
quality of scheme administration, together with
inconsistencies in the application and
interpretation of the regulations




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Proposal

• To publish Codes of Practice
• For Statutory Consultation in Summer of 2006
• Regulations to be laid in October 2006
• Regulations to come into effect April 2007

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Aims and Objectives

• To improve the efficiency and effectiveness of
• scheme administration
• To improve the Data flow between Scheme
  Members,
• Employers and Administering Authorities
• Ensure that benefits are calculated accurately
• and paid on time

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Who Should Benefit

• Administering Authorities
• - By having accurate and timely data
• Scheme Employers
• - By having their roles and responsibilities set
  
• out in clear terms
• Scheme Members
• - By having access to current and accurate
  data
• - Clear lines of communications with their
• employers and the Administering
  Authority

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Codes of Practice

• Will contain practical guidelines in relation
  to-
• - the exercise of functions
• - the standard of conduct and practice expected
• from those who exercise such functions

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Codes of Practice will Contain

• Disclosure of provisions affecting Scheme
  members
• Responsibilities of Administering Authorities,
• Employing Authorities and Pension Liaison
• Officers (PLOs)
• Roles and responsibilities of Registered
  Medical
• Practitioners in the exercise of their duties
  imposed
• by regulation 97(9)

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Communications - New Starters
Not all employers make new employees aware of
their right to join the LGPS proposed A
requirement for all employers to send a standard
letter to all new joiners, informing them of
their right to join the LGPS




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Role of Scheme Employers
Scheme employers are entrusted to make a
significant number of decisions regarding,
status, pensionable pay, entitlement to benefit,
etc, however many lack the knowledge and
experience to undertake these functions
effectively and to submit the information
reliably and consistently to the Administering
Authority




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Pension Liaison Officers

• Enabling powers for Administering Authorities
  to
• establish network of Pension Liaison Officers
  (PLOs)
• The expectation is that each employer would
• nominate one individual to act as the PLO for
  their
• body/authority

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Provision of Data

• To overcome the inconsistency in the submission
  
• of scheme member data
• proposed
• Administering Authorities will be required to
• measure the performance of scheme employers
• against a statutory timetable

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Monitoring of Employers

• Annual report to pension committee on
  performance
• of each scheme employer
• Improvement notices for persistent poor
  performing
• employers
• Provision for charging poor performing
  employers
• for the additional work necessary as a result
  of
• poor data, etc

22
Service Level Agreements

• Enabling power to issue Service Level Agreements
• These will have a Statutory Footing
• To be used as a measure of last resort

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Ill-Health Retirements

• Proposal to set up Independent Doctors Panel,
• consisting of between 3 and 5 Senior ALAMA
• members, to act as a focal point for
  independent
• Doctors working on LGPS cases
• Code of practice setting out the
  responsibilities of
• the employer and the independent doctor when
• providing an opinion under regulation 97(9)