13^th February

Dear Sir/Madam

I enclose regulations, which the Secretary of State has made under powers contained in sections 7 and 12 of the Superannuation Act 1972. The regulations amend the Local Government Pension Scheme Regulations 1997 ("the 1997 Regulations") and come into force on 6 March 2002. The regulations give effect to the draft proposals circulated for consultation on 20 August 2001 under the title, The Local Government Pension Scheme (Amendment No 3) Regulations 2001.

These regulations introduce minor changes which:-

Extend the scope of the admission agreement arrangements to allow admission agreement bodies approved by the Secretary of State to enter into an admission agreement to cover a contracted out service or the outsourcing of a function (reg 3);

Amend the meaning of pay so as to exclude bonus payments made under the School Achievement Award scheme counting for pension purposes (reg 4);

Add a clarifying proviso to the provisions covering ill-health enhancements which might otherwise be interpreted in a way which would penalise certain employees with a combination of whole and part time employment after 5 or 10 years whole time membership of the Scheme (reg 5);

Delete a provision in the 1997 regulations concerning the calculation of death grants for re-employed pensioners, both on grounds of equity and to reduce an administrative burden (reg 6);

Clarify the position regarding AVCs transferred in from a non-LGPS scheme by excluding them from counting for membership of the scheme (reg 8) (Regulation 60 (11) of the principal regulations allows an active member to transfer in AVCs into his LGPS AVC scheme);

Adds arm’s length housing companies to the list of LGPS employers in Schedule 2 to the 1997 regulations (reg 10). If the employees of such a company have been in membership of the Scheme by virtue of an admission agreement but are now in the Scheme as an employee of a Scheme employer, then the local authority may wish to terminate the agreement as of the effective date of these regulations.

Any comments or questions relating to the application of these changes should be addressed in the first instance to Roisin Macreadie, Local Government Pensions Division, DTLR, Zone 2/E8, Ashdown House, 123 Victoria Street, London, SW1E 6DE (tel: 020 7944 6017 or e-mail [email protected]).

Yours sincerely

 The Chief Executive of:

County & District Councils in England

County & Borough Councils in Wales

London Borough Councils

South Yorkshire Pensions Authority

Tameside Metropolitan Borough Council

Wirral Metropolitan Borough Council

Bradford City Council

South Tyneside Metropolitan Borough Council

Wolverhampton Metropolitan Borough Council

London Pensions Fund Authority

Environment Agency

The Town Clerk, City of London

Clerk, South Yorkshire PTA

Clerk, West Midlands PTA

The Secretaries of:

Local Government Association

New Towns Pension Fund

Commission for New Towns

LGPC

SOCPO

SOLACE

ALACE

Convention of Scottish Local Authorities (COSLA)

Welsh Local Government Association

North Wales Association of Town Councils

Trades Union Congress

UNISON

TGWU

GMB

AEEU

Audit Commission

Government Actuary’s Department

ACA

SPPA

NI DOE

AOC

UCEA

Other Government Departments