Dear Sir/Madam

Local Government Pension Scheme (Miscellaneous) Regulations 2001

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 2 April 2001. It should be noted, however, that regulations 5, 8, 24 and 26 are effective from 1st April 1998, regulations 4(a), 20 and 21 are effective from 1st October 1999 and regulations 3, 4 and 25 are effective from 13 January 2000.

The principal changes concern the way in which membership of the Scheme is calculated both for establishing entitlement to benefit and in calculation of benefits. This meets the objective of ensuring both the soundness of the 1997 Regulations and consistency of approach before and after 1 April 1998.

The regulations cover a number of other issues:-

fine tuning provisions dealing with ongoing access to the LGPS for staff involved with contracted out services and functions,

dealing with questions concerning ongoing protected rights for transfers to bodies under the Greater London Authority;

giving specific protections for employees of the Meat Hygiene Service and the Rent Officer Service Agency;

introducing changes required by other legislation, concerning OPAS and deferment of annuity purchases.

Details of the individual changes are included in the annex to this letter.

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, DETR, Zone 2/E8, Ashdown House, 123 Victoria Street, London, SW1E 6DE (tel: 020 7944 6017) (e-mail [email protected]).

Yours sincerely





The Chief Executive of:

County and District Councils (England and Wales)

County and 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:

New Towns Pension Fund

Commission for New Towns

Local Authority Associations





Convention of Scottish Local Authorities (COSLA)

North Wales Association of Town Councils

Welsh Local Government Association

Trades Union Congress






Audit Commission

Government Actuary’s Department







Other Government Departments


Regulations 1 and 2

These are the standard introductory paragraphs, and administrators need to note the different effective dates for certain provisions.

Regulation 3

This makes further changes to the amendment introduced by the LGPS (Amendment etc) Regulations 1999. Scheme employers, other than admitted bodies, who are not defined in Best Value legislation (Local Government Act 1999) can now enter into admission agreements when following the same principle of outsourcing internal services or entering into joint ventures.

Regulation 4

This provision, along with changes made to regulations 6,7,11 and 18 ensures a correct scheme retirement age.

Regulation 5

Along with regulations 8 and 26 this forms part of the amendments needed to ensure consistency in the treatment of qualifying and reckonable periods of membership both before and since 1 April 1998.

Regulation 6

This is connected to changes to NRD in regulation 25 and recognises the introduction of the 85 year rule (see also 4,7,11,and 18).

Regulation 7

This ensures no actuarial reduction will apply to certain retirements, without employer consent, prior to NRD (see also regulations 4,6,11 and 18).

Regulation 8

This forms part of the changes resolving the issue of aggregated and non-aggregated periods of membership (see also regulation 5 and 26).

Regulation 9

This amendment introduces a method of calculating membership where one job out of a period of concurrent employments terminates. Instead of keeping benefits separate, transfer can be made to the period of membership in a remaining employment (see also regulation 15).

Regulation 10

This provision deals with the qualification for dependant’s benefits. Clarifying that a deceased member’s dependant children must be born no later than 12 months after the member’s death. It also provides for equal and consistent treatment between legitimate and illegitimate dependant children.

Regulation 11

Amends regulation 55 (payments to increase total membership). Together with regulation 6 & 7 provide further necessary changes linked to redefining NRD, and ensures that there is no loss of entitlement.


Regulation 12

Clarifies the intention of regulation 58 by removing the age requirement of 50 before an eligible member may exercise his right to elect for pension in lieu of either the whole or part of his retirement grant.

Regulation 13

Following a relaxation by Inland Revenue of their rules covering the deferment of annuity purchase with the money deriving from AVC investment this change now enables scheme members to benefit.

Regulations 14

This provision is also linked to those changes introduced by the LGPS (Amendment etc) Regulations 1999, and should be brought to the attention of employers contracting out a service or function. Employers will now be able to take account, when considering risk and indemnity cover, the fact that a transferor employer must bear cost of any unfunded incurred liabilities arising from a period of contracting out a service or function. This changes the old provision whereby cost could be spread across all employers contributing to a particular fund.

Regulation 15

Provides a formula in regulations 87(4) for calculating the period of membership which contributions can buy as an alternative to seeking GAD guidance and adopts the same approach as introduced in regulation 9.

Regulation 16 and 17

Makes necessary changes to regulation 101 and 103 to ensure that the internal disputes procedures contains information about the role of OPAS.

Regulation 18

Together with regulations 4,6, 7 and 11, this regulation forms the final part of the inter-related changes dealing with qualifying and reckonable periods of membership.

Regulation 19

This now introduces a third party dispute resolution process into the handling of bulk transfers between different LGPS funds.

Regulation 20 and 21

These introduce changes dealing with undertaking given to staff and office holders involved in the administrative transfer of the rent officer service to ROSA.

Regulation 22

This ensures that the definition of returning officers in the principal regulations, with regard to their separate employment, is consistent with changes introduced by other legislation.

Regulation 23 & Schedule 7

Replaces provisions in connection with former members of the MCSSS who have joined the LGPS and refers to new Schedule 7.

Regulation 24

After the administrative transfer of staff from local government to the Meat Hygiene Service, there were some problems relating to employment and contractual rights in the subsequent recruitment of certain individuals. This now provides statutory backing to the rights that this group of staff should enjoy.

Regulation 25

Makes a minor amendment to Schedule 1.

Regulation 26

See regulation 8.

Regulation 27

Adds new Schedule replacing provisions dealing with the protection of former MCSSS staff (see regulation 23).

Regulation 28

Makes changes to the LGPS (Transitional Provisions) Regulations 1997 so that a person who was a deferred member on 31st March 1998 can have the same commutation right with regard to their pensions as applies to active members.


Regulation 29

This self standing provision provides access to the Scheme, in a similar way as was permissible under regulation 5(3) prior to 13 January 2000, for certain transfers of undertakings which have occurred since 1st April 1999.

Regulation 30

Allows certain persons to elect that the changes made by these regulations do not apply to them if they would be placed in a worse position.

Regulation 31

Revokes certain provisions of earlier amending regulations.

Schedule 7

The introduction of this schedule confirms undertakings given to staff prior to the creation of the GLA and the transfers that subsequently took place. These provisions ensure staff transferring from an employer using the MCSSS can retain certain pension rights they had prior to the transfer.


March 2001