CHAPTER I

PENSION FUNDS AND EMPLOYERS' PAYMENTS

Pension funds

73. The bodies responsible for maintaining pension funds for the Scheme immediately before the commencement date must continue to maintain them unless the fund is vested in a different body by or under any enactment.

Governance policy statement (SI2005/3199)
     73A. —(1) An administering authority must, after consultation with such persons as they consider appropriate, prepare, maintain and publish a written statement setting out—

(a) whether the administering authority delegate their function or part of their function in relation to maintaining a pension fund to a committee, a sub-committee or an officer of the administering authority; and

(b) if they delegate that function or part of that function to a committee, sub-committee or an officer of the administering authority—


(i) the frequency of any committee or sub-committee meetings;

(ii) the terms of reference, structure and operational procedures of the delegation; and

(iii) whether the committee or sub-committee includes representatives of employing authorities (including non-Scheme employers) or members, and if so, whether those representatives have voting rights.

    (2) The first such statement must be published on or before 1st April 2006.

    (3) The statement must be revised and published by the administering authority following a material change in their policy on any of the matters referred to in paragraph (1). (SI2005/3199) (SI2007/1561)

Governance compliance statement (SI2007/1561)
     73A. —(1) An administering authority must prepare a written statement setting out—

(a) whether they delegate their function, or part of their function, in relation to maintaining a pension fund to a committee, a sub-committee or an officer of the authority;

(b) if they do so—


(i) the terms, structure and operational procedures of the delegation;

(ii) the frequency of any committee or sub-committee meetings;

(iii) whether such a committee or sub-committee includes representatives of employing authorities (including authorities which are not Scheme employers) or members, and, if so, whether those representatives have voting rights;



(c) the extent to which a delegation, or the absence of a delegation, complies with guidance given by the Secretary of State and, to the extent that it does not so comply, the reasons for not complying.

    (2) An administering authority must publish the first such statement on or before 1st March 2008.

    (3) An administering authority must—

(a) revise their statement following a material change in respect of any of the matters mentioned in paragraph (1); and

(b) publish the statement as revised.

    (4) In preparing or revising their statement an administering authority must consult such persons as they consider appropriate.

    (5) When they publish their statement, or the statement as revised, an administering authority must send a copy of it to the Secretary of State.

(SI2007/1561)

Appropriate funds

74.-(1) The appropriate fund for a member or a person who is entitled to any benefit in respect of a person who has been a member is-

(a) in the case of an active member, the fund specified for a member of his description in accordance with Schedule 5;

(b) in the case of-

(i) a deferred or a pensioner member who was an active member on the commencement date or has been an active member since that date, or

(ii) a member in respect of whom another person has rights under the 1995 regulations and these Regulations,

the fund so specified for a member of his description when he ceased to be an active member; and

(c) in the case of any other deferred or a pensioner member, the fund specified for him by virtue of regulation 19 of the Transitional Regulations.

(2) Where these Regulations refer to payments being made without referring to the fund to which or from which they are to be made, the reference is to payments being made to or from the fund which is the appropriate fund for the member in question.

(3) Paragraph (2) does not apply where the payments are made under Chapter IV of Part III (AVCs and SCAVCs).

75.-(1) An administering authority who have made an admission agreement may establish a further pension fund (an "admission agreement fund") in addition to the fund maintained under regulation 73 ("the main fund").

(2) Immediately after an authority establish an admission agreement fund they must give the Secretary of State notice in writing that they have done so.

(3) The notice must specify the admission bodies whose employees are eligible for benefits from the admission agreement fund ("the transferred bodies").

(4) Where an admission agreement fund is established, assets of such value as an actuary appointed by the appropriate administering authority determines to be appropriate must be transferred from the main fund to the admission agreement fund.

(5) When valuations under regulation 77 of both the main fund and the admission agreement fund are first obtained after the admission agreement fund is established, the administering authority must obtain a transfer statement from an actuary appointed by them.

(6) The transfer statement must specify whether in the actuary's opinion there is a need for further assets to be transferred from the main fund to the admission agreement fund, and, if so, the value of those assets.

(7) Where the transfer statement specifies that assets of a specified value need to be transferred, the administering authority must arrange for assets of that value to be transferred as soon as is reasonably practicable.

(8) Where an admission agreement fund is established, the liabilities of the main fund as respects membership in employment with the transferred bodies become liabilities of the admission agreement fund.

76. - (1) (SI2006/966) After any audit of any pension fund of theirs an administering authority shall immediately send copies-

(a) of the revenue account and balance sheet of the fund, and

(b) of any report by the auditor,

to each body whose employees are active members.

(2) The input period for the purposes of section 238 of the Finance Act 2004 is the year ending 31st March 2007 and each year ending 31st March thereafter. (SI2006/966)

Funding strategy statement
     76A.  - (1) Each administering authority shall, after consultation with such persons as they consider appropriate, prepare, maintain and publish a written statement setting out their funding strategy.

    (2) In preparing and maintaining the statement, the administering authority shall have regard to - 

(a) the guidance set out in the document published in March 2004 by CIPFA, the Chartered Institute of Public Finance and Accountancy and called "CIPFA Pensions Panel Guidance on Preparing and Maintaining a Funding Strategy Statement (Guidance note issue No. 6)"; and

(b) the statement of investment principles published by the administering authority under regulation 9A of the Local Government Pension Scheme (Management and Investment of Funds) Regulations 1998.

    (3) The first such statement shall be published on or before 31st March 2005.

    (4) The statement shall be revised and published by the administering authority following, and in accordance with, any - 

(a) material change in their policy on the matters set out in the statement; and

(b) material change to the statement of investment principles under regulation 9A(4) of the Local Government Pension Scheme (Management and Investment of Funds) Regulations 1998. (SI2004/573)

Pension fund annual report (SI2007/1561)
     76B. —(1) An administering authority must, in relation to each year beginning on 1st April 2007 and each subsequent year, prepare a document ("the pension fund annual report") which contains—

(a) a report about the management and financial performance during the year of each of the pension funds maintained by the authority;

(b) a report explaining the authority's investment policy for each of those funds and reviewing the performance during the year of the investments of each fund;

(c) a report of the arrangements made during the year for the administration of each of those funds;

(d) for each of those funds, a statement, by the actuary who carried out the most recent valuation of the assets and liabilities of the fund in accordance with regulation 77 (actuarial valuations and certificates), of the level of funding disclosed by that valuation;

(e) the current version of the statement under regulation 73A (governance compliance statement);

(f) for each of those funds, the fund account and net asset statement with supporting notes and disclosures prepared in accordance with proper practices;

(g) an annual report dealing with—


(i) the extent to which the authority and the employing authorities in relation to which they are the administering authority ("relevant employing authorities") have achieved any levels of performance set out in the pension administration strategy in accordance with regulation 76C(2)(b); and

(ii) such other matters arising from their pension administration strategy as they consider appropriate;



(h) the current version of the statement under regulation 76A (funding strategy statement);

(i) the current version of the statement under regulation 9A of the Local Government Pension Scheme (Management and Investment of Funds) Regulations 1998 (statement of investment principles);

(j) the current version of the statement under regulation 106B (statements of policy concerning communications with members and employing authorities (including non-Scheme employers)); and

(k) any other material which the authority considers appropriate.

    (2) The authority must publish the pension fund annual report on or before the 1st December following the year end.

    (3) In preparing and publishing the pension fund annual report the authority must have regard to guidance given by the Secretary of State.

(SI2007/1561)

Pension administration strategy (SI2007/1561)
     76C. —(1) An administering authority may prepare a document ("the pension administration strategy") which contains such of the matters mentioned in paragraph (2) as they consider appropriate ; and, where they do so, paragraphs (3) to (8) apply.

    (2) The matters are—

(a) procedures for liaison and communication with their relevant employing authorities;

(b) the establishment of levels of performance which the administering authority and the relevant employing authorities are expected to achieve in carrying out their functions under these Regulations by—


(i) the setting of performance targets;

(ii) the making of agreements about levels of performance and associated matters; or

(iii) such other means as the administering authority consider appropriate;



(c) procedures which aim to secure that the administering authority and the relevant employing authorities comply with statutory requirements in respect of those functions and with any agreement about levels of performance;

(d) procedures for improving the communication by the administering authority and the relevant employing authorities to each other of information relating to those functions;

(e) the circumstances in which the administering authority may consider giving written notice to a relevant employing authority under regulation 81A(2) on account of that employer's unsatisfactory performance in carrying out its functions under these Regulations when measured against levels of performance established under sub-paragraph (b);

(f) such other matters as appear to the administering authority to be suitable for inclusion in that strategy.

    (3) When an administering authority first publish a pension administration strategy they must send a copy of it to each of their relevant employing authorities and to the Secretary of State.

    (4) An administering authority must revise their pension administration strategy following a material change in their policies in relation to any of the matters contained in the strategy.

    (5) In preparing or revising their pension administration strategy an administering authority must consult the relevant employing authorities and such other persons as they consider appropriate.

    (6) Where an administering authority revise their pension administration strategy they must notify in writing to the relevant employing authorities and the Secretary of State—

(a) the changes, and

(b) where a copy of the revised strategy may be obtained.

    (7) An administering authority and the relevant employing authorities must have regard to the current version of any pension administration strategy when carrying out their functions under these Regulations.

    (8) In this regulation a reference to the functions of an administering authority includes, where applicable, their functions as an employing authority.

(SI2007/1561)

77.-(1) Each administering authority must obtain-

(a) an actuarial valuation of the assets and liabilities of each of their pension funds as at 31st March in 1998 and in every third year afterwards,

(b) a report by an actuary, and

(c) a rates and adjustments certificate.

(2) Each of those documents must be obtained before the first anniversary of the date ("the valuation date") as at which the valuation is made or such later date as the Secretary of State may agree.

(3) A rates and adjustments certificate is a certificate specifying-

(a) the common rate of employer's contribution, and

(b) any individual adjustments,

for each year of the period of three years beginning with 1st April in the year following that in which the valuation date falls.

(4) The common rate of employer's contribution is the amount which in the actuary's opinion should be paid to the fund by all bodies whose employees contribute to it so as to secure its solvency, expressed as a percentage of the pay of their employees who are active members.

(5) The actuary must have regard-

(a) to the existing and prospective liabilities of the fund arising from circumstances common to all those bodies, and

(b) to the desirability of maintaining as nearly constant a rate as possible.

(5A) The actuary must have regard to the administering authority's funding strategy statement published under regulation 76A. (SI2004/573)

(6) An individual adjustment is any percentage or amount by which in the actuary's opinion contributions at the common rate should in the case of a particular body be increased or reduced by reason of any circumstances peculiar to that body.

(7) A rates and adjustments certificate must contain a statement as to the assumptions on which the certificate is given as respects-

(a) the number of members who will become entitled to payment of pensions under provisions of the Scheme, and

(b) the amount of the liabilities arising in respect of such members,

during the period covered by the certificate.

(8) A report under paragraph (1)(b) must contain a statement as to the demographic assumptions used in making the valuation, showing how they relate to the events which have actually occurred in relation to members of the scheme since the last valuation.

(9) The authority must provide the actuary preparing a valuation or a rates and adjustment certificate with the consolidated revenue account of the fund and such other information as he requests.

(10) The authority must send copies of any valuation, report or certificate under this regulation or revision under regulation 78-

(a) to the Secretary of State,

(b) to each body with employees who contribute to the fund in question, and

(c) to any other body which is or may become liable to make payments to that fund.

(11) They must also send the Secretary of State-

(a) a copy of the consolidated revenue account with which the actuary was provided under paragraph (9), and

(b) a summary of the assets of the fund at the valuation date (unless such a summary is contained in the report).

78.-(1) When obtaining a transfer statement under regulation 75(5) an administering authority must also obtain from the actuary a rates and adjustments certificate for the admission agreement fund for each remaining year of the period covered by the most recent such certificate for their main fund.

(2) Where an admission agreement ceases to have effect, the administering authority who made it must obtain-

(a) an actuarial valuation as at the date it ceases of the liabilities of each admission body, and

(b) a revision of any rates and adjustments certificate for any fund which is affected, showing the revised contributions due from each admission body.

(a) an actuarial valuation as at the date it ceases of the liabilities of the admission body of the fund in respect of current and former employees of the admission body (SI1999/3438) which is a party to that admission agreement ("the outgoing admission body "), and (SI1999/1212)

(b) a revision of any rates and adjustments certificate for any fund which is affected, showing the revised contributions due from the outgoing admission body. (SI1999/1212)

(2A) But where it is not possible for any reason to obtain revised contributions from the outgoing admission body or from an insurer or any person providing a guarantee or indemnity on behalf of that admission body,(SI1999/3438), the administering authority may obtain a further revision of any rates and adjustments certificate for the fund, showing the revised contributions due from each employing authority who contributes to that fund. (SI1999/1212) (SI2001/770)

(2A) But where it is not possible for any reason to obtain revised contributions from the outgoing admission body, or from an insurer or any person providing a guarantee or indemnity an indemnity or bond (SI2003/3004) on behalf of that admission body, the administering authority may obtain a further revision of any rates and adjustment certificate for the fund, showing - 

(a) in the case where the outgoing admission body is a transferee admission body within the meaning of regulation 5(17)(i) 5A(2)(a) (SI2003/3004), the revised contributions due from the body which is the transferor (SI2003/3004) Scheme employer within the meaning of regulation 5(17)(j) (SI2003/3004) in relation to that outgoing admission body, and

(b) in any other case, the revised contributions due from each employing authority who contributes to the fund. (SI2001/770)

(2B) An administering authority may obtain from an actuary a certificate specifying, in the case of an admission body, the percentage or amount by which, in the actuary's opinion,-

(a) the contribution at the common rate should be adjusted, or

(b) any prior individual adjustment should be increased or reduced,

with a view to providing that the value of the assets of the fund in respect of current and former employees of that admission body is neither materially more nor materially less than the anticipated liabilities of the fund in respect of those employees at the date that the admission agreement is to end. (SI1999/3438)

(3) This paragraph applies where-

(a) an administering authority agree with an employing authority under regulation 52(6)(a) that the employing authority will pay increased contributions under regulation 79, or

(b) it appears to an administering authority that the amount of the liabilities arising or likely to arise in respect of members in employment with an employing authority exceeds the amount specified in, or likely as a result of, the assumptions stated for that authority in a rates and adjustments certificate by virtue of regulation 77(7).

(4) Where paragraph (3) applies, the administering authority must obtain a revision of the rates and adjustments certificate affected, showing the resulting changes as respects that employing authority.

Employers' liability to make payments

79.-(1) An employing authority must contribute to the appropriate fund in each year covered by a rates and adjustments certificate under regulation 77 or 78 the amount appropriate for that authority as calculated in accordance with the certificate and paragraph (4).

(2) During each of those years an employing authority must make payments to the appropriate fund on account of the amount required for the whole year.

(3) Those payments on account must-

(a) be paid at the end of the intervals determined under regulation 81(1), and

(b) equal the appropriate proportion of the whole amount due under paragraph (1) for the year in question.

(4) An employer's contribution for any year is the common percentage for that year of the pay on which contributions have during that year been paid to the fund under Part II by employees who are active members (other than contributions under regulation 18(3)), increased or reduced by any individual adjustment specified for that employer for that year in the rates and adjustments certificate.

(5) The common percentage is the common rate of employer's contribution specified in that certificate, expressed as a percentage.

(6) Where an employee - 

(a) is treated, under regulation 17(3A), as if she had paid contributions, or

(b) has paid contributions during a period of maternity, paternity or adoption (SI2003/2249) absence,

the pay on which the common percentage is calculated is the pay the employee would have received if she had not been absent. (SI2001/1481)

Employer's further payments

80.-(1) Where an authority pass a resolution under regulation 52 they must pay the appropriate sum to the appropriate fund before the expiry of the relevant period (as defined in paragraph (7) of that regulation) unless before the end of that period they have agreed as mentioned in paragraph (6)(a) of that regulation.

(2) Where an authority pass a resolution under regulation 143 in a case where paragraph (4)(a) of that regulation does not apply, they must pay the appropriate sum to the appropriate fund before the expiry of the period of one month beginning with the date the resolution is passed. (SI2004/573)

(3) The appropriate sum for a member is such sum as is shown as appropriate in guidance issued by the Government Actuary.

(4) Any extra charge on the appropriate fund resulting from-

(a) a resolution under regulation 15, or 52, 53 or 143 (SI2004/573) of these Regulations, or

(b) a member's becoming entitled to an ill-health pension calculated under regulation 28 by reference to an enhanced membership period,

must be repaid to the fund by the employing authority concerned (but, in the case of resolutions under regulation 52 and 143, only so far as not paid under paragraph (1) or, as the case may be, paragraph (2)) (SI2004/573) (but, in the case of a resolution under regulation 52, only so far as not paid under paragraph (1)). (SI2004/573)

(5) The appropriate administering authority may require the employing authority concerned to make additional payments to the appropriate fund in respect of any extra charge on the fund resulting from a pension and retirement grant becoming immediately payable to a member under regulations 26, 31(1), or 31(6) 31(6) or 35(1A). (SI2006/2008) (SI2004/3372)

81.-(1) Every employing authority must pay to the appropriate administering authority, on or before such dates falling at intervals of not more than 12 months as the appropriate administering authority may determine (but in the case of the amounts mentioned in sub-paragraph (a) not later than the time required under section 49(8) of the Pensions Act 1995)-

(a) all amounts from time to time deducted from the pay of their employees under these Regulations;

(b) any amount received by them under regulation 18, (by deduction or otherwise) during the interval;

(c) any extra charge payable under regulation 80 of which they have been notified by the administering authority during the interval; and

(d) a contribution towards the cost of the administration of the fund, which shall include any amount specified in a notice given in accordance with regulation 81A(2) (SI2007/1561).

(2) Paragraph (1)(d) does not apply where the cost is paid out of the fund under regulation L4(3) of the 1995 regulations regulation 5(6) of the Local Government Pension Scheme (Management and Investment of Funds) Regulations 1998. (SI2007/1561)

(3) If the annual amount payable under paragraph (1)(d) cannot be settled by agreement, it must be determined by the Secretary of State.

(3A) If the disagreement is about an amount specified in a notice given in accordance with regulation 81A(2), the Secretary of State shall have regard to—

(a) the provisions of the pension administration strategy prepared by the appropriate administering authority that are relevant to the case; and

(b) the extent to which the appropriate administering authority and the employing authority have complied with those provisions in carrying out their functions under these Regulations.

(SI2007/1561)

(4) Every payment under paragraph (1)(a) is to be accompanied by a statement showing-

(a) the name and pay of each of the employing authority's employees who is an active member;

(b) which employees are paying voluntary contributions;

(c) the amounts which represent deductions from the pay of each of the employees and the periods covered by the deductions, distinguishing amounts representing deductions for voluntary contributions.

(5) An administering authority may direct the information mentioned in paragraph (4) to be given to them instead in such form and at such intervals (not exceeding 12 months) as they specify in the direction.

(6) Paragraphs (1) and (4) do not apply to an employing authority which is an administering authority.

(7) Voluntary contributions are contributions other than those under Part II.

Additional costs incurred by employing authority's level of performance (SI2007/1561)
     81A. —(1) This regulation applies where, in the opinion of the appropriate administering authority, they have incurred additional costs which should be recovered from an employing authority because of that employing authority's level of performance in carrying out its functions under these Regulations.

    (2) The administering authority may give written notice to the employing authority stating—

(a) the administering authority's reasons for forming the opinion mentioned in paragraph (1);

(b) the authority's opinion that the employing authority's contribution under regulation 81(1)(d) should include an amount specified in the notice in respect of the additional costs attributable to that authority's level of performance;

(c) the basis on which the specified amount is calculated; and

(d) where the administering authority have prepared a pension administration strategy, the provisions of the strategy which are relevant to the decision to give the notice and to the matters in sub-paragraph (a), (b) or (c).

(SI2007/1561)

Payments by administering authorities (SI2007/1561)
     81B. —(1) An administering authority must pay to the fund of which they are the administering authority their fair share of any contribution towards the cost of the administration of the fund in circumstances where they have required a contribution towards such cost from employing authorities as referred to in regulation 81(1)(d).

    (2) An administering authority must also pay any additional costs due to the fund which are incurred because of their level of performance in carrying out their functions under these Regulations.

(SI2007/1561)

Interest

82.-(1) An administering authority may require an authority from which payment of any amount due under regulation 79, 80, 81, 91 or 125 ,125 or 126 (SI2004/573) is overdue by more than one month to pay interest on that amount.

(1A) An administering authority must pay interest on any amount due to be paid by them as an employing authority payment of which is overdue by more than one month. (SI2007/1561)

(2) Interest under paragraph (1) paragraphs (1) or (1A) (SI2007/1561) or under regulation 94(1) regulation 87(2A) 87(1) and (2A) (SI2004/573), 89(5) or 94 (SI1998/1238) must be calculated at one per cent. above base rate on a day to day basis from the due date to the date of payment and compounded with three-monthly rests.

(3) Interest under regulation 87(1) or 89((5) must be calculated at nine per cent. per annum compounded with yearly rests on 31st March.(SI1998/1238)