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 2 April 2001. It should be noted, however, that regulations 5, 8, 24 and 26 are effective from 1^st April 1998, regulations 4(a), 20 and 21 are effective from 1^st 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

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

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.

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

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.

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).

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

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

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).

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.

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.

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.

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.

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.

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.

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

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.

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

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

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.

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

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.

Makes a minor amendment to Schedule 1.

See regulation 8.

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

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

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 1^st April 1999.

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.

Revokes certain provisions of earlier amending regulations.

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