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 13 November 2001.

There are 3 main changes: -

Restating preserved right of retirement for pre-April 1998 members. (Regulation 3)

Use of AVCs to purchase scheme benefits (Regulations 4, 5 and 8)

Definition of independent doctors (Regulation 6)

In a recent amendment to the Scheme, in SI 2001/770 inadvertent changes, in an attempt to simplify the regulations, were made concerning the Normal Retirement Age of individuals whose membership commenced before 1 April 1998. This is now corrected to ensure no loss of rights.

Two consultation exercises, one informal, were undertaken during 2000 on changes affecting the use of AVCs. The change now being introduced was in fact the intention in the planning of the 1997 Regulations. Without this, we had been advised that local authority funds might have found themselves underpinning poor performance of the companies chosen as their AVC provider. This in turn would mean funds bearing extra liabilities through individuals "buying against" the fund and varying qualifying conditions through the purchase of scheme membership. From the date of change members can use their AVC monies to purchase benefit payable by the LGPS which will be fully indexed. Whilst simplifying the system this also reduces the liability falling to the pension funds. A protection is also provided for members entering into AVC contracts in the period 1 April 1998 and 13 November 2001.

In amending the provisions concerning the use of independent doctors to ensure a consistent approach we have reaffirmed the position actually agreed by all parties when the concept was first introduced into the LGPS in 1997. During the consultation period certain concerns were raised. To address these, we have decided to delete any reference in the amending regulations to the nature of any contractual relationship that might exist between independent doctors and scheme employers. Instead, the revised regulation 97 will require the independent doctor to confirm in his certificate to the Scheme employer, that he has not previously advised or given an opinion on the particular case for which the certificate has been requested. To ensure that the certification process itself, including any medical examination, is also independent, the amending regulation will also require confirmation from the independent doctor that he is not acting, and has not at any time acted, as the representative of the scheme member, scheme employer or any other party in relation to the same case.

The opportunity has also been taken to rectify a minor drafting error in regulation 97(9). Although the intention might have been to avoid any unnecessary repetition, we have now been advised that the abbreviated reference to "...ground of ill-health" in the second line of the regulation should, on the grounds of consistency, be amended to read "ground of ill-health or infirmity of mind or body." The amendments will come into force on 1 April 2002. This should allow local authorities ample time, if necessary, to revise their arrangements with their occupational health units.

A minor corrective change to Schedule 7 has also been introduced by regulation 9.

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]).