The Local Government Pension Scheme(Pension Sharing on Divorce) Regulations 2000
The Secretary of State, in exercise of the powers conferred on him by section 7 of the Superannuation Act 1972 and of all other powers enabling him in that behalf, after consultation with such associations of local authorities as appeared to him to be concerned, the local authorities with whom consultation appeared to him to be desirable and such representatives of other persons likely to be affected by the Regulations as appeared to him to be appropriate, hereby makes the following Regulations: -
Citation and commencement
1. - (1) These Regulations may be cited as the Local Government Pension Scheme (Pension Sharing on Divorce) Regulations 2000.
(2) These Regulations shall come into force on 1st December 2000.
Pension sharing and the Local Government Pension Scheme Regulations 1995
2. - (1) This regulation applies to persons specified in regulation 4(2)(a) of the Local Government Pension Scheme (Transitional Provisions) Regulations 1997 (deferred members and pensioner members who immediately before 1st April 1998 were deferred members or pensioner members of the Scheme and who do not on or after that date become active members of the Scheme) who are also pension debit members.
(2) Where the shareable rights of a person to whom this regulation applies become subject to a pension debit -
(b) the amount of the reduction shall be calculated in accordance with guidance issued by the Government Actuary.
(3) For the purposes of
(b) a pensioner's children's long-term pension under regulation G6 of those regulations; or
(c) a pensioner's children's short-term pension under regulation G7 of those regulations
the reference to the deceased's retirement pension shall be to the
retirement pension to which the deceased would have been entitled had his
shareable rights not been subject to a pension debit.
(b) those costs and charges prescribed by regulations made under sections 23, 24 or 41 of the Welfare Reform and Pensions Act 1999 which the adminstering authority is enabled to recover by or under any such regulations".
1. In regulation 2(1) for "Schedule 1 contains" substitute "Schedule 1 (Interpretation) and Schedule 1A (Interpretation for pension sharing on divorce) contain".
Calculation of benefits
2. For the wording of paragraph (4) of regulation 20 substitute -
(b) benefits payable on or after the death of a pensioner member are calculated by multiplying the amount of his former retirement pension by the multiplier specified for the benefit in question.".
20A. - (1) The benefits payable to a pension debit member shall be reduced to take into account the debit to which the shareable rights of the pension debit member are subject under a pension sharing order.
(2) The amount of the reduction shall be calculated in accordance with guidance issued by the Government Actuary.
Replacement of rights
20B. - (1) Subject to paragraph (2), a pension debit member who is an active member may not replace any rights debited as a consequence of a pension sharing order with any rights which the member would not have been able to acquire (in addition to the debited rights) had the pension sharing order not been made .
(2) The provisions of paragraph (1) shall not apply in circumstances which the Commissioners of Inland Revenue may stipulate in relation to "moderate earners" in any taxation exception or concession made by them from time to time under paragraph 18(10) and (11) of Schedule 10 to the Finance Act 1999, or otherwise.
(3) For the purpose of this regulation, "moderate earners" has the meaning in paragraphs (4) to (6) of regulation 5 of the Retirement Benefits Schemes (Sharing of Pensions on Divorce) Regulations 2000.".
(b) in paragraph (5), for "or 50" substitute ", 50, 156 or 157"; and
(c) after paragraph (5) add -
First instance decisions
(b) in any other case by the Scheme employer who last employed him";
(b) after paragraph (8) insert -
Right to apply for an appointed person to decide a
(b) in paragraph (2), after sub-paragraph (b) insert -
(bb) a person entitled to a pension credit;";
(c) in paragraph (2)(c), for "or (b)" substitute ",
(b), (ba) or (bb)";
(b) a person who ceased to be such a person or member during the period of six months ending with the date of the application, or
(c) a person claiming to be a person or member within sub-paragraph (a) or (b),
must set out his full name, address, date of birth, and the name of
his appropriate administering authority.".
Inward transfer of pension rights
146. References in this Part to a pension credit member are to that person in relation to his pension credit rights and not in relation to any other rights he may have under the Scheme.
Discharge of liability for pension credit rights
147. - (1) An administering authority may discharge their liability in respect of a pension credit in accordance with either sub-paragraph (2) or sub-paragraph (3) of paragraph 1 of Schedule 5 to the 1999 Act.
(2) Where the appropriate administering authority discharges its liability by conferring pension credit rights on the person entitled to the pension credit, those rights shall be to -
(b) a death grant.
(3) But a pension credit member is not
entitled to a lump sum grant if the transferor has been paid a
retirement grant before the valuation date.
(b) in accordance with guidance issued by the Government Actuary.
(b) regulation 147(3) and (4) and regulation 153(1),
the valuation date shall be the first day of the implementation
period as defined in section 34(1) of that Act.
Application of the Regulations to pension credit members
152. Part I (preliminary provisions), regulations 94 (interest on late payment of certain benefits), 95 (payments due in respect of deceased persons) and 96 (non-assignability) and Chapter IV (determinations, information and records) of Part IV (Administration) of these Regulations apply to a pension credit member.
153. - (1) The annual rate of the pension at normal benefit age shall be the pension calculated as referred to in regulation 147(4), increased in accordance with the Pensions (Increase) Act 1971 and the Pensions (Increase) Act 1974 from the valuation date.
(2) The lump sum grant shall be equal to 3 times the annual rate of the pension.
Payment of benefits
154. - (1) A pension credit member who attains normal benefit age is entitled to immediate payment of a pension and, if applicable, a lump sum grant.
(2) The pension and the lump sum grant are payable from the pension credit member's appropriate pension fund.
(3) The pension is payable for life.
155. - (1) When a pension credit member dies before he attains the age of 70, the appropriate administering authority shall pay a death grant.
(2) The amount of the death grant of a pension credit member who dies before his normal benefit age is a lump sum equal to 3 times the annual rate of the pension that would have been paid to him if on the date of his death he had become entitled to a pension.
(3) The amount of the death grant of a pension credit member who dies after he is in receipt of a pension under this Part is a lump sum equal to 5 times the annual rate of that pension being paid to him at the date of his death but reduced by the amounts of any retirement pension paid to him.
(4) The appropriate administering authority at their absolute discretion may make payments of a death grant to or for the benefit of the pension credit member's nominee or personal representatives, or any person appearing to the authority to have been his relative or dependant at any time.
(5) If the appropriate administering authority have not made payments under paragraph (4) equalling in aggregate the pension credit member's death grant before the expiry of the period of 2 years beginning with his death, they must pay an amount equal to the shortfall to the pension credit member's personal representatives.
Commutation: small pensions
156. - (1) If the annual rate of the pension to which a pension credit member is entitled is -
(b) otherwise, not more than £260,
the appropriate administering authority may pay him a lump sum
representing the capital value of the pension.
(b) the lump sum grant (if applicable)
("the commutation payment") may be paid to the pension
(b) his appropriate administering authority is the adminstering authority of that fund.
159. For the purposes of Chapter II of Part IVA of the Pension Schemes Act 1993 (requirements relating to pension credit benefits), the managers of the Scheme in relation to a pension credit member are his appropriate administering authority.
160. - (1) A pension credit member is not entitled to request his appropriate administering authority to accept a transfer value for relevant pension rights and an administering authority may not accept a transfer value of such rights where they have accrued to a pension credit member.
(2) "Relevant pension rights" has the meaning given in regulation 121(2).
Changes of funds
161. No transfer of pension credit rights may be made from a pension credit member's appropriate fund to another fund of the Scheme notwithstanding that that fund may be an appropriate fund for that member in respect of other rights he may have accrued under the Scheme."
Schedule 1: Interpretation
In these Regulations -
(This note is not part of the Regulations)
These Regulations make provision in connection with the pension rights of certain members of the Local Government Pension Scheme ("the Scheme") and amend the Local Government Pension Scheme Regulations 1997 which regulate the Scheme. They also amend the Local Government Pension Scheme (Investment and Management of Funds) Regulations 1998.
The provisions and amendments are in relation to the sharing of pensions following divorce or nullity of a marriage, introduced by the Welfare Reform and Pensions Act 1999.
Regulation 1 provides for citation and commencement.
Regulation 2 makes provision in connection with the effect of pension sharing and the creation of a pension debit on the rights of pensioners and deferred members of the Scheme whose benefits are regulated by the Local Government Pension Scheme Regulations 1995 and other regulations relating to the Scheme made under section 7 of the Superannuation Act 1972 which continue in effect.
Regulation 3 and the Schedule to these regulations amend the Local Government Pension Scheme Regulations 1997. Paragraphs 1 to 10 and paragraph 12 make amendments to the wording of the existing provisions. Paragraph 11 adds a new Part VI to the regulations to make provision for pension credit members and paragraph 13 inserts a new Schedule of definitions for pension sharing as Schedule 1A.
Part VI provides that a person entitled to a pension credit may become a pension credit member of the Scheme. A pension credit member is entitled to receive pension benefits at age 65. The benefits take the form of a pension and, where the person whose rights are subject to a debit has not been paid a lump sum, a lump sum. There is no provision for earlier payment of the benefits except that they may be commuted for a lump sum in circumstances where life expectancy is less than one year. A pension of less than a stated annual amount may also be commuted for a lump sum.
There are no surviving spouse's or children's pensions payable following the death of a pension credit member. There is provision for payment of a death grant.
A pension credit member may not aggregate his pension credit rights with any other rights he may have under the Scheme nor may he ask for the Scheme to accept a transfer value for pension rights from other schemes or arrangements.
Regulation 4 amends the Local Government Pension Scheme (Investment and Management of Funds) Regulations 1998 to provide that certain costs and charges incurred in connection with pension sharing (as prescribed in regulations made under the Welfare Reform and Pensions Act 1999) are not borne by the Scheme.
These Regulations do not impose any costs on business.
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