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THE 21ST CENTURY

 
Local Government Pension Scheme (Pension Sharing on Divorce) Regulations 2000
  • Effective from 1 December 2000
  • Courts could apply pension sharing orders to LGPS pensions upon divorce
  • Members would have a value of their pension allocated as a debit to provide a separate benefit in the pension fund for their former spouse who became a ‘credit member’.
  • The credit member could if they wished transfer their credit to another pension arrangement.

 
Local Government Pension Scheme (Amendment) Regulations 2004
  • Effective from 1 April 2004
  • The period of membership required to qualify for benefits under the LGPS was reduced from 2 years to three months
  • Provisions for awarding a short service ill health retirement grant deleted.
  • Deferred pensioners who rejoined the LGPS must decide whether or not to aggregate their membership within twelve months of rejoining (or such longer period as their employer allows). Previously there was no time limit.
  • The augmentation provisions amended to allow employers to award a member an additional period of membership at any time during active membership of the Scheme.
 
Local Government Pension Scheme (Civil Partnerships) (Amendment) Regulations 2005
  • Effective from 5 December 2005
  • In the event of the death of an active member, a deferred or pensioner member who ceased membership on or after 1 April 1998 a pension will be paid to the surviving civil partner based on the deceased member’s membership on and from 6 April 1988.
  • Any added years’ compensation payment will generate pension benefits in the same way as mentioned above.
  • If there is an eligible child or children then a child’s pension will be payable
  • Pension rights are shareable on the dissolution of a civil partnership.
 
Local Government Pension Scheme (Amendment) Regulations 2006
 
These changes were brought about by the meetings of the tripartite committee. In summary the main changes are as follows:
  • The removal of the 85 year rule in respect of benefits accruing from 30 September 2006 although there will be protection for those members who will be aged 60 or over by 31 March 2013 and who have satisfied the 85 year rule by that date.
  • The Normal Retirement Date for Councillor Members is reduced from 70 to 65.
  • All employees apart from Coroners will be able to join and remain in the scheme until age 75.
  • The 15% limit on member’s contributions has been removed.
  • Benefits paid after age 65 will be actuarially increased.
  • Flexible retirement will be allowed at or after age 50 linked to a reduction in hours or grade.
  • The ability to convert lump sum to pension has been removed.
  • Members drawing benefits on or after 6 April 2006 will be able to commute pension to lump sum. For each £1 of pension surrendered the member will receive £12. Up to 25% of the capital value of the members pension benefits can be taken in the form of any lump sum.
  • The facility to waive contributions for employees who have 40 years LGPS service has been removed.
  • The facility to surrender a proportion of pension to provide larger survivor benefits has been removed.
  • Children’s pensions coming into payment after 5 April 2006 and which are eligible to be paid beyond age 17 will have to cease by age 23.
  • The maximum number of added years that can now be awarded is 6 years 243 days.
  • The maximum amount of augmented service that can be awarded is 6 years 243 days but the restriction of 40 years no longer applies.
  • The earnings cap has been removed.
  • The existing limits on benefits have been removed. There is no restriction on the amount of service a benefit can be based on (previously there was a maximum of 40 years at age 60 for members who joined the scheme after 01/06/1989.
  • Annual and lifetime allowances are now provided which in 2006/7 are £215,000 and £1.5 million respectively.
 
Local Government Pension Scheme (Amendment) (No.2) Regulations 2006
 
The main change brought about by these Regulations from 1 October 2006 was for the protection of scheme members with regard to the rule of 85. The amendments extend the continuation of the rule of 85 in three ways:
  • All existing active members at 30 September 2006 will now accrue service under the 85 year rule until 31 March 2008.
  • The protection for existing active members at 30 September 2006 who will be 60 would otherwise have satisfied the 85 year rule by 31 March 2013 has been extended to 31 March 2016.
  • Existing active members at 30 September 2006 who will be 60 and would otherwise have satisfied the 85 year rule between 1 April 2016 and 31 March 2020 who choose to retire before NRD will have their pension (that portion accruing after 1 October 2006) reduced accordingly by a tapered reduction.