Happy New Year to all our Employers!
Peninsula Pensions – Year End 2015/16
You will all be aware that 2016 is a valuation year and so it is crucial that all Year End data is submitted promptly - find more information on our website and here.
Exit Payment Recovery Consultation
Rules will be introduced from April 2016 requiring
public sector employees who:
- earned £80,000 or more
- received an exit payment, and
- are then re-employed in the public sector within 12 months
to repay some or all
of their exit payment. This will include Local Government Pension Scheme
strain costs. The Government has issued a consultation on these rules which you can find here. The consultation closes on 25 January. Please note that this
will run alongside the £95,000 exit payments cap proposed to come into force
later in 2016.
Consultation on Somerset County Council Pension Fund Strategy Statement
(For Somerset County Council Pension Fund Employers Only)
We are looking to implement a revised
Funding Strategy Statement for the pensions fund, and in line with best practice
we would like to invite comments from you on the draft of the new statement. You can find the draft Funding Strategy Statement here.
If you would like to make any
comments/suggested amendments please e-mail them to Anton Sweet by Friday 5 February 2016. There
is no need to send a nil return.
If you have any questions about the
draft communications policy then please also send them to Anton Sweet. Please send any questions by 29 January so I can respond in time
for you to make the deadline I have given above.
 Investment Pooling Project
In the Autumn Statement, the Government published criteria for the pooling of Local Government Pension Scheme (LGPS) investments. This followed on from the policy statement made in the July budget that the Government was looking for LGPS funds to pool their investments into larger funds in order to achieve savings.
In response to the Government agenda, both the Devon and Somerset Funds are exploring options for the pooling of their investment assets.
Project Brunel has been set up in response to the Government’s objective of pooling the investments of LGPS funds. The project is exploring the options for investment collaboration and pooling between Local Government Pension Scheme (LGPS) funds in the South West and other similar funds, with the aim of taking a recommended option forward as a group. More information can be found on our website and in the The Project Brunel Newsletter here.
The end of 'Contracting Out' and Changes in National Insurance (NI) Categories
Contracting-out of the additional State Pension on a defined
benefit (DB) basis will end on 5 April 2016. This means that from 6 April 2016,
employees will automatically be brought back into the State Pension scheme and
will no longer be able to use a contracted-out salary-related (COSR)
occupational pension scheme such as the Local Government Pension Scheme to
contract out of the State Scheme.
The Local Government Pensions Committee (LGPC) has issued
bulletin 138 available here which
includes important information from HMRC which confirms the changes in NI
categories that will need to be applied for employees.
Another Lifetime Allowance
Reduction
6 April 2016 will see yet another fall in the
Lifetime Allowance from £1.25M to £1M.
On retirement the Lifetime Allowance is the maximum value of your
pension benefits allowable before excess tax charges apply. Although £1M limit is high, there are a number
of high earners with long service records that will be affected by this change.
We are currently analysing who is likely to be affected and
will be writing to those individuals by the end of January. Those affected by this change may be eligible
to apply to HMRC for protection so they can either keep the current £1.25M
limit or receive an individual Lifetime Allowance depending on the value of
their pension savings at 5 April 2016.
LGPS NI Database, and Tell Us Once (TUO)
Provisions contained in the LGPS Regulations mean that if a member of the LGPS dies, it is necessary for us to know if the individual also had other periods of LGPS membership elsewhere in the country so that the right death benefits can be calculated and paid to the deceased member’s dependants. Discussions have taken place to look at how we can share
information to make sure that this happens.
The LGPS NI Database has been developed to enable funds to
check if a member has other pension rights, which is required when accessing
rights to certain benefits including death grants, trivial commutations and
refunds.
All funds using the database are
required to sign a data protection agreement with South Yorkshire Pensions
Authority (the system's host). The principles outlined in The Information
Commissioner's Code of Practice on data sharing have been used as the basis for
this agreement. Our website has been updated to inform scheme members that we
will be sharing information and of the regulations that permit us to do this. We will also be
informing members through pension member newsletters over the next few
months.
The Tell Us Once (TUO) service
has been adopted alongside the NI database to enable LGPS administrators to receive
information from registrars in real time following the death of a scheme member. This should mean fewer overpaid pensions and therefore both a
financial and administrative saving for schemes which take part. Notifications of
deaths received from TUO also count as formal death notifications meaning funds
would not also have to seek proof of the death through a death certificate. There
would therefore also be administrative savings from this aspect of the service.
General Administration Updates
Ill Health Guidance
The Pensions Ombudsman has produced an LGPS Ill Health Newsletter which provides guidance on the Ill Health Retirement process. The newsletter can be found on our website here.
Auto-Enrolment
There is some new and updated guidance for our employers on our website.
Opt-Out Spreadsheets
At the Employer Seminars back in November, we requested that Opt-Out Spreadsheets needed to be sent to us to for Auto-Enrolment purposes. It seems this caused some confusion as some employers supply this and some do not. We have therefore decided not to insist on receiving the Opt-Out Spreadsheets and we just ask that you let us know of any opt-out cases you get by forwarding the required paperwork as per Auto Enrolment requirements. Please see our procedure guide on the website for the documents we need.
Absence Spreadsheets
During our Employer Seminars, some employers mentioned that their staff can take part days unpaid absences and some even only hours unpaid and we were asked how we record it. We explained that we could only work on complete days as that is what our system works on. However, we have now added a column on the absence spreadsheet that says 'Part Day' so all breaks will be assumed to be the employee's full normal working day unless indicated otherwise by ticking the 'Part Day' column.
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