Local Government Pension Scheme Regulations (Northern Ireland) 2000

Explanatory Note

(This note is not part of the Regulations.)

These regulations retitle and consolidate, with amendments, the provisions of the Local Government (Superannuation) Regulations (Northern Ireland) 1992 (S.R. 1992 No. 547), (“the 1992 regulations”) as amended.

Part L (injury allowances) of the 1992 regulations has not been reproduced in these regulations as the allowances are not payable by the Committee out of the pension fund. For the time being therefore that part is not revoked by these regulations.

The principal changes are as follows—

1.  Regulation B2(1) reduces the minimum age of entry to the Scheme from 18 to 16 with effect from 1st October 1989.

2.  Regulation B3(3)(b) defines a whole-time employee as an employee whose contractual number of hours is not less than the number of hours stipulated as whole-time in his contract of employment. There are saving provisions in Schedule M2 in respect of Scheme membership before the commencement date of these regulations (“the commencement date”).

3.  Regulation B3(4)(ii) deals specifically with employees who work only those hours they are directed to work by their employers and whose contractual hours consequently vary in a non-cyclical fashion.

4.  With the exception of casual employees and re-entrants who must apply to join from the commencement date, Scheme membership is automatic for all whole-time and part-time employees irrespective of the number of hours per week or weeks per year they are working unless they opt, in writing, not to join or subsequently opt out (regulation B9).

5.  With retrospective effect from 1st April 1990 Scheme membership is automatic for all whole-time employees working at least 30 hours per week unless they opt, in writing, not to join or subsequently opt out (regulation B9(2)).

6.  Any period of employment on or after the commencement date during which a Scheme member is absent from duty through illness or injury (whether or not contributions have been paid) counts as a period of Scheme membership (regulation B13(1)(b)).

7.  Part-time Scheme members who work or have worked less than 15 hours per week are given the opportunity to pay contributions to count local government employment since 1st January 1993 as Scheme membership. Employers' contributions will also be payable by employers and former employers in respect of Scheme members who elect to pay such contributions (regulation C4).

8.  From the commencement date the definition of “remuneration” includes any payment or benefit specified in an employee’s contract of employment as being a pensionable emolument (regulation C1).

9.  With effect from 1st January 1993 regulation C6 implements, in respect of the local government pension scheme, the requirements of the Directive on the implementation of the principle of equal treatment for men and women in occupational social security schemes in relation to maternity leave (86/378/EEC, O.J. No. L225, 12.8.86, p. 40). The regulation provides for a female member on maternity absence to pay contributions on the rate of remuneration she is receiving during her absence (and to elect to pay contributions at the rate she was receiving at her last payment date) to count the period for which contributions have been paid as Scheme membership. (The EC Directive can be obtained from The Stationery Office Ltd, 16 Arthur Street, Belfast.)

10.  With effect from 2nd May 1995 regulation C12 and paragraph 3(1) of Schedule C5, make provision for part-time employees to purchase part-time added years. However, part-timers currently buying whole-time added years will continue to do so unless they elect under regulation C12(5) to change their original election.

11.  With effect from 2nd May 1995 the treatment of the enhancement of benefits on ill-health retirement for members with part-time Scheme membership is clarified. The additional period to be awarded is determined by reference to the actual length of the person’s Scheme membership and then proportionately reduced to its whole-time equivalent when calculating benefits. In the case of a person whose employment consists of a mixture of whole-time and part-time Scheme membership the additional period to be awarded is determined by reference to the formula in paragraph 4(3) of Schedule D3 unless a total of 13 years 121 days' actual whole-time Scheme membership has been completed, in which case the formula is not applied (regulation D7(2) and Schedule D3, paragraph 4(4)).

12.  Regulations D9(2), D11(2)(e) and D16(3) provide, with effect from 2nd May 1995, that women retiring on or after age 60 with less than 25 years' total membership are not required to accept immediate payment of Scheme benefits although, like men, they may opt to do so. Also, from the same date male members will no longer be prevented from electing to receive their retirement benefits before state pension age if their reduced pension is less than their guaranteed minimum.

13.  Regulation D16(5) removes an inequality whereby the pension of a man retiring at or after age 60 with less than 25 years' total membership, calculated in respect of membership from 17th May 1990, is subject to an actuarial reduction of up to 33% whereas that of a woman is not. A woman’s pension in respect of Scheme membership commencing on or after 6th April 1978 during which she has been contracted-out of the State Earnings Related Pension Scheme has been protected as a consequence of a requirement of the Social Security Pensions (Northern Ireland) Order 1975. The new regulation provides that a man’s pension will enjoy the same protection as that of a woman in respect of his Scheme membership from and including 17th May 1990. The amendment also provides that the protection for both men and women lasted only in respect of membership to 30th April 1995.

14.  Regulation E1 increases the death grant payable on death in service on or after 2nd May 1995 to two times rather than one times pensionable remuneration.

15.  As from the commencement date the Committee will have absolute discretion to decide who should receive a death grant (regulation E8).

16.  Spouses' pensions will no longer cease to be payable following remarriage or cohabitation on or after the commencement date (regulations F1 to F5).

17.  With effect from the commencement date the spouse of a female member who retires or dies in service will have the automatic right to a widower’s pension in respect of his wife’s Scheme membership after 31st March 1972 (regulation F7). A member with Scheme membership before 1st April 1972 may elect to include part or all of that membership (Schedule F1) in the calculation of the widower’s pension but her lump sum retirement grant will normally be paid at a reduced rate in respect of any period so included (Schedule D2, paragraph 3). This reduction can be avoided or, if appropriate, the period included, by the payment of extra contributions to the Scheme.

18.  With effect from 6th April 1988 the widower of a female member who dies after 5th April 1988 and before the commencement date is entitled to a pension based on her service after that date (regulation F11).

19.  Regulation G3(3) provides that children’s long-term pensions are comparable where no spouse’s long-term pension is payable irrespective of who is caring for the children.

20.  With effect from 6th April 1988, regulation G8(3) provides that pensions are payable for eligible children of female members. Also, from that date there is no longer a requirement that Scheme members must have completed a minimum period of total membership before their children are eligible for a pension.

21.  With effect from 6th April 1988 regulation G9 makes provision for minimum amounts of children’s long-term pensions to be awarded.

22.  Regulation H1 provides for the addition of interest on the late payment of benefits and returns of contributions.

23.  With effect from 2nd May 1995, regulation H6 provides for a member’s pension, other than his guaranteed minimum, to be commuted on retirement and paid to him as a lump sum when the member is in exceptionally serious ill-health. The Committee must be satisfied by medical advice that the expectation of life at retirement is less than one year. Commutation does not affect any spouse’s or children’s pensions payable after the death of the retired member.

24.  From the commencement date, the Committee can, only award ill-health retirement benefits, or the early payment of preserved benefits on ill-health grounds, when a certificate, confirming that the person will be permanently incapable until, at the earliest, age 65, is provided by an independent registered medical practitioner qualified in occupational health medicine (regulation J1).

25.  To comply with Article 50 of the Pensions (Northern Ireland) Order 1995 regulations J5 to J10 introduce arrangements for the resolution of disputes between a prospective member, member, deferred pensioner, pensioner, spouse or dependant on the one hand and the Committee on the other. A matter involving a disagreement relating to the Scheme must first be referred by the complainant to a person appointed by the Committee to review the first decision. If the complainant is dissatisfied with his decision, he may apply to the Committee for the decision to be reconsidered.

26.  Effective from 9th April 1997, regulation K17 makes provision in respect of members who were eligible to be Scheme members previously but who instead paid contributions to a personal pension plan as a result of which they have suffered loss, and the contravention is actionable under section 62 of the Financial Services Act 1986.

Schedule C4 reflects overriding legislation introduced by the Finance (No 2) Act 1987 and the Finance Act 1989 and identifies different categories of members depending upon whether the individual joined, or is deemed to have joined, the Scheme before 17th March 1987, on or after 17th March 1987 and before 1st June 1989, or on or after 1st June 1989 or has elected to be treated as having joined the Scheme on that date and clarifies—

(a)that the limit on an employee’s contributions under the Scheme, other than additional voluntary contributions, is linked to remuneration as defined in the regulations and not to the employee’s taxable earnings,

(b)that irrespective of age the maximum Scheme membership is limited to 40 years for the purposes of the calculation of benefits for members who joined or have elected to be treated as having joined the Scheme on or after 1st June 1989,

(c)that pensionable remuneration is limited to £100,000 for the purposes of calculating the retirement grant in the case of a person who joined the Scheme on or after 17th March 1987 and before 1st June 1989,

(d)that pensionable remuneration for the purposes of determining the contributions payable by, and the calculation of benefits payable to or in respect of members who joined the Scheme on or after 1st June 1989, cannot exceed the “permitted maximum” under the Finance Act 1989.

Article 14 of the Superannuation (Northern Ireland) Order 1972 confers express powers to make regulations retrospective in effect. These regulations are to a certain extent retrospective, however, no one will be adversely affected by the retrospective provisions.