Return
to Agenda
ITEM PF20
PENSION
FUND COMMITTEE – 26 NOVEMBER 2004
LOCAL GOVERNMENT
PENSION SCHEME REGULATIONS (LGPS) TRANSITIONAL REGULATION
Report by
the Head of Finance & Procurement
Introduction
- 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.
Transitional
Regulation 17
- 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.
- 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.
- Any request to
buy back such service made outside the 6 months allowed by the Regulations
is at the discretion of the Administering Authority.
- 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.
Financial
Considerations
- 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.
- 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.
Service
Credit
- 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.
Summary
- 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.
- 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.
Current
Requests
- 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.
- Dorset is happy
to accept repayment, but under Regulations, need confirmation from Oxfordshire
before repayment can be accepted.
- 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.
RECOMMENDATIONS
- The Committee
is ASKED to:
- decide
whether it wishes to extend the 6-month period for receipt of
requests to repay contributions; or
- 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
Return to TOP
|