Meeting documents

Pension Fund Committee
Friday, 26 November 2004

PF261104-20

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ITEM PF20

PENSION FUND COMMITTEE – 26 NOVEMBER 2004

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS (LGPS) TRANSITIONAL REGULATION

Report by the Head of Finance & Procurement

 

Introduction

  1. A report was submitted to the last meeting asking the Committee to consider its discretions under the Transitional Regulation 17. The Committee requested further information.

    2. Transitional Regulation 17

  2. This Regulation allows any member who had left local government service, with less than a total of 5 years’ scheme membership, between 31 March 1974 and 1 January 1980 to buy back service, for which a refund had been given providing that the request is made within 6 months of returning to local government employment, or such longer time as the administering authorities agree.

  3. Primarily this provides people who left, when a refund of contributions was the only option, the opportunity to take advantage of later Regulation changes that introduced the availability of preserved benefits.

  4. Any request to buy back such service made outside the 6 months allowed by the Regulations is at the discretion of the Administering Authority.

  5. Information about this option is included within the scheme handbook. However the Authority cannot be certain that individual scheme members have received this information, or that records are still held to confirm the facts on which previous decision have been made.

    6. Financial Considerations

  6. The scheme member is required to make repayment to the Administering Authority that made the initial refund. This will be the amount of the returned contributions, (including any interest but net of any tax deducted from that payment). Interest will be added for each complete year ending before 1 April 1977 at the rate of 6% (compounded yearly) and at the rate of 2.25% (compounded quarterly) thereafter.

  7. Employer contributions and investment returns on initial employee contributions are not refunded when an employee takes a refund of contributions. These remain in the fund. Allowing the employee to buy back into the fund therefore removes the windfall gain from the fund, but does not result in additional costs.

    8. Service Credit

  8. If a scheme member were allowed to repay their refund of contributions the service, of up to 5 years would then be credited to them. This additional membership can then be linked to current membership; held as a preserved benefit; or transferred to another Administering Authority.

    9. Summary

  9. The Regulation allows any member who left local government service, with less than a total of 5 years’ scheme membership, between 31 March 1974 and 1 January 1980 to buy back service. The passing of time means that this applies to a small group.

  10. Given the largely neutral financial impact there is no significant detriment to the fund in allowing an extension to the six months prescribed in the Regulations.

    11. Current Requests

  11. An ex-Oxfordshire County Council scheme member joined the Dorset scheme in May 1996 and made a request to repay contributions under this Regulation in June 2000.

  12. Dorset is happy to accept repayment, but under Regulations, need confirmation from Oxfordshire before repayment can be accepted.

  13. In the second case an Oxfordshire scheme member has asked to make repayment under this Regulation. Current employment had started in 1986 but the member did not realise this option was available to them until 2004 when a request was made.

    14. RECOMMENDATIONS

  14. The Committee is ASKED to:

          1. decide whether it wishes to extend the 6-month period for receipt of requests to repay contributions; or

          2. if the Committee decides not to extend the 6-month period, to determine the two individual cases.

 

SUE SCANE
Head of Finance & Procurement

Background Papers: Nil

Contact Officer: Sally Fox Tel: 01865 816080

November 2004

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