Meeting documents

Pension Fund Committee
Friday, 26 November 2004

PF261104-21

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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

  1. 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.

  2. 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.

    3. Current Regulations

  3. 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.

    4. Current Practice

  4. 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.

    5. Impact Upon the Fund

  5. 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.

    6. Future Options

  6. 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.

  7. 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?

  8. 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.

  9. However there is no requirement to satisfy medical criteria to join the LGPS, regardless of when the member elects to join the scheme.

  10. 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.

    11. RECOMMENDATIONS

  11. 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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