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ITEM PF21
PENSION
FUND COMMITTEE – 26 NOVEMBER 2004
LOCAL GOVERNMENT
PENSION SCHEME REGULATIONS (LGPS) PURCHASE OF ADDED YEARS
Report by
the Head of Finance & Procurement
Introduction
- New regulations
amending the provisions of the Disability Discrimination Act came into
force on 1 October 2004. These regulations insert an overriding rule
into all pension schemes prohibiting the schemes from discriminating
on the grounds of disability. As a result schemes have a duty to make
"reasonable adjustment" to current provisions, criteria or practices
where a disabled person is at a disadvantage.
- The area under
current regulations where we could breach the provisions of the Disability
Discrimination Act is within the procedures for a member intending to
buy an additional period of membership.
Current
Regulations
- The Regulations
prescribe the limits for an active member making an election to pay
additional contributions. These Regulations also enable the administering
authority to seek additional information about the member’s reasonable
good health, at the member’s own expense, before agreeing to the request
to buy additional membership.
Current
Practice
- Following a member’s
request to buy additional membership, within Oxfordshire County Council,
sickness records are checked for any payment of statutory sick pay.
This is not carried out for other employers.
Impact
Upon the Fund
- Where a member
begins a contract to buy additional membership and has started making
contributions and then is subsequently retired upon the grounds of permanent
incapacity, the purchase is considered to be complete without further
contributions being made. Benefits and enhancements are calculated on
total service including the added membership, and set against that employer’s
adjustment certificates.
Future
Options
- In considering
how to deal with this matter in the future, the contradictions within
current practice have been considered and it is extremely rare for any
medical opinion to be sought. Access to the relevant information is
only part of this; there are also considerations about reasons for sickness,
what is an acceptable review period and what is an acceptable level
of sickness, whether the Authority’s staff should have this information
and be required to make decisions based upon it.
- The regulatory
requirements for purchase of additional membership is to confirm the
member is in reasonable good health, but this is not defined or qualified,
so what would the Authority be asking the medical examiner to sign and
could that, again, be putting the Authority’s staff in a position of
having to make judgements for which they are not qualified?
- The regulations
do not specify an independent practitioner to make this assessment;
merely that it should be carried out at the member’s own cost. Whereas
permanent ill health has to be determined independently before an employer
can agree to early retirement.
- However there
is no requirement to satisfy medical criteria to join the LGPS, regardless
of when the member elects to join the scheme.
- All of these issues
have to be offset against potential costs to the fund. However it is
appropriate that in bringing this new Act to the attention of the Pension
Fund Committee that the opportunity is taken to prepare a written policy
to ensure that all scheme members are treated equally, when requesting
to pay additional contributions.
RECOMMENDATIONS
- The Committee
is ASKED to decide whether the Council will accept elections
to buy additional membership without seeking an individual medical report.
SUE
SCANE
Head of Finance
& Procurement
Background
papers: Nil
Contact
Officer: Sally Fox Tel: (01865) 816080
November
2004
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