The Local Government Pension Scheme (Amendment) Regulations 2006
© Crown Copyright 2006
These Regulations are made in exercise of the powers conferred by section 7 of the Superannuation Act 1972.
In accordance with section 7(5) of that Act, the First Secretary of State has consulted (a) such associations of local authorities as appeared to him to be concerned; (b) the local authorities with whom consultation appeared to him to be desirable; and (c) such representatives of other persons likely to be affected by the Regulations as appeared to him to be appropriate.
The First Secretary of State makes the following Regulations:
Citation, commencement, interpretation and application
1. —(1) These Regulations may be cited as the Local Government Pension Scheme (Amendment) Regulations 2006.
(2) These Regulations apply in relation to England and Wales.
(3) These Regulations shall come into force as follows—
(b) Part 3 (except paragraph (a) of regulation 34) and regulations 47 and 48 on 6th April 2006; and
(c) Part 4 on 1st October 2006.
(4) In these Regulations, "the principal
Regulations" means the Local Government Pension Scheme Regulations
3. In regulation 20, after paragraph (3) insert—
(3B) But the total amount of the member's retirement grant, including any sum received in accordance with an election under paragraph (3A), shall not exceed 25% of the capital value of his accrued rights.
(3C) For the purposes of this regulation, a member's accrued rights include rights accrued in respect of any payments made by him in accordance with Chapter IV of Part III (Additional Voluntary Contributions).
(3D) The capital value of a person's accrued rights shall be calculated as shown in guidance issued by the Government Actuary.".
Revised rates and adjustments certificates: period over which
increased costs to be spread
Further restrictions on eligibility
5. In regulation 6(3), for "his 65th birthday" substitute "the day before his 75th birthday".
Periods of membership
6. In regulation 9, omit paragraph (1A).
7. After regulation 11, insert—
(2) In such a case, his period of membership for calculating his entitlement to any benefits payable under these Regulations is obtained by aggregating his period of membership after that date with the period obtained by applying the formula set out in paragraph (3).
(3) That formula is M times 105,600 divided by P, where M is his period of membership after 5th April 1989 and before 6th April 2006 (excluding any membership credited by virtue of a transfer under regulation 121) and P is his pay as mentioned in paragraph (1)."
Employer's discretion to reduce member's contribution rate
19A. —(1) A member and any dependant of his shall not be entitled, under any provision of these Regulations, to receive benefits the capital value of which exceeds his lifetime allowance increased, where applicable, by his primary protection or enhanced protection.
(2) In this regulation, "lifetime allowance", "primary protection" and "enhanced protection" are to be construed in accordance with section 218 of, and Schedule 36 to, the Finance Act 2004.
(3) Any calculation of the capital value of a member's benefits is to be carried out in accordance with guidance issued by the Government Actuary.
(4) The appropriate administering authority is responsible for deducting from any payments of benefits under the Scheme any tax to which they may become chargeable under the Finance Act 2004."
Other early leavers: deferred retirement benefits and elections
for early payment
Re-employed and rejoining deferred members
(1B) If the payment of benefits referred to in paragraph (1A) takes effect before the member's 65th birthday, the benefits payable are reduced in accordance with guidance issued by the Government Actuary.
(1C) But the employer may choose to waive, in whole or in part, any such reduction.
(1D) Where the employer so chooses, it shall pay to the fund the cost incurred as a result of such waiver as calculated by the fund's actuary.
(1E) Any benefits paid following an election under paragraph (1A) are not subject to abatement under regulation 110 in respect of any subsequent employment with the person who is his employer at the date of his election."
(2) In paragraph (2), for "But they" substitute
"In any event, retirement benefits under this Chapter".
(b) after paragraph (2) insert—
(2) In regulation 50(2), omit the words
"(except the guaranteed minimum)".
(b) omit sub-paragraph (2)(b); and
(c) after paragraph (10) insert—
Effect of increases under this Chapter for older members
(b) in sub-paragraph (c), for "membership; and" substitute "membership."; and
(c) omit sub-paragraph (d).
(c) omit the definition of "Continuity conditions".
(b) omit paragraphs 4 and 5.
(b) omit paragraph 3;
(c) omit paragraph (3) of regulation 20 as substituted by paragraph 5, and substitute "65" for "70" in paragraph (5) as so substituted;
(d) for paragraph 7, substitute—
(e) in paragraph 9, omit sub-paragraph (b) and the word "and" immediately
38. In regulation 25, omit paragraph (3A).
Other early leavers: deferred retirement benefits and elections for early payment
39. In regulation 31(4), omit the words from the beginning of the paragraph up to and including "is less than 85 years,".
Re-employed and rejoining deferred members
40. In regulation 32 (5)(a), for "29 and 31(4)" substitute "and 29".
Right to count credited period
41. In regulation 122—
(b) after paragraph (6), insert—
(6D) A credited period arising from a request to accept a transfer value under regulation 121 which is made by a person who becomes a member on or after 1st October 2006 shall be treated as a period of membership after that date."
Credited periods for transferring members with mis-sold pension
Scheme Employers: Firebuy Limited
46. —(1) In Schedule 2 (Scheme Employers), add at the end of the list "Firebuy Limited.".
(2) In the Table in Part 2 of Schedule 5, add at the end—
Transitional provisions and savings
47. The Schedule to these Regulations (transitional provisions and savings) has effect.
Right to opt out
48. —(1) Where—
(b) that relevant beneficiary so elects by notice in writing given to the appropriate administering authority within the period of six months beginning with 1st October 2006,
then the principal Regulations shall have effect in relation to
him as if those amendments had never been made.
(b) dies while in such employment,
(ii) 6th April 2006, in respect of amendments made by Part 3.
1. Where a member—
(b) satisfies the 85 year rule;
that part of his retirement pension and grant which is calculated
by reference to any period of membership before the relevant date
shall not be reduced in accordance with regulation 31(4) of the principal
Regulations (as amended by regulation 39 of these Regulations).
(ii) the date on the day after the day on which the member leaves local government employment; or
(b) in any other case, 1st October 2006.
3. For the purposes of this Schedule,
a member satisfies the 85 year rule if the sum of —
(b) his total membership in whole years;
(c) in a case where he elects after his local government employment ends, the period beginning with the end of that employment and ending with the date he elects; and
(d) in the case of a person who was a member immediately before 1st April 1998, any qualifying period counted by virtue of regulation 123 which was awarded before 1st October 2006,
is 85 years or more.
(b) was assumed to retire from a local government employment on a date before his 65th birthday ("the assumed date") for the purposes of calculating his additional contributions under regulation 55(6) of the principal Regulations.
(2) Where a member to whom this paragraph
(b) retires on or after the assumed date,
he shall not pay any additional contributions after that date and
the whole of the additional period may be counted as part of his total
(This note is not part of the Regulations)
These Regulations make a number of amendments to the Local Government Pension Scheme ("the Scheme") constituted by the Local Government Pension Scheme Regulations, as amended ("the principal Regulations").
Regulation 3 inserts new paragraphs into regulation 20 of the principal Regulations, to provide for the commutation of annual pension entitlement.
Regulation 4 requires an administering authority which has considered whether to obtain a revised rates and adjustments certificate, and which has thereby determined an increased liability over the 2004 valuation of its pension fund, to spread that liability over the 2005 Funding Strategy Statement Period.
Part 3 makes a number of amendments to the principal Regulations to address changes in the tax regime consequent on the Finance Act 2004.
Part 4 deals with the so-called "85 year rule". This term refers to the current provisions of the Scheme which allow members to retire and take their pension entitlements without actuarial reduction if the sum of their age and their length of service exceeds 85 years. Members over 60 can do so as of right; members over 50 but under 60 require their employer's consent.
Part 4 makes a number of technical amendments to the Scheme to effect the removal of the 85 year rule.
Regulation 46 inserts Firebuy Limited into the list of Scheme Employers in Schedule 2 to the principal Regulations. Regulations 47 and 48 and the Schedule make transitional and savings provisions.
 1972 c. 11.back
 The Secretary of State's functions under section 7 of the Superannuation Act 1972 in so far as they were exercisable in relation to Scotland were devolved to Scottish Ministers by section 63 of the Scotland Act 1998 (1998 c. 46) and article 2 of, and Schedule 1 to, the Scotland Act 1998 (Transfer of Functions to Scottish Ministers etc) Order 1999 (S.I. 1999/1750).back
 S.I.1997/1612; the relevant amending instruments are S.I. 1999/1212, 2000/1164, 2001/1481, 2002/206, 2004/573, 2004/3372 and 2005/1903.back
 S.I. 2005/1903.back
 2004 c. 12.back
 1983 c.54.back
 Paragraphs (6A) and (6B) of regulation 122 were inserted by S.I. 2004/3372 and revoked by S.I. 2005/1903.back
ISBN 0 11 074429 2
|© Crown copyright 2006||Prepared 3 April 2006|