H M Treasury response to consultation on restricting exit payments

On 21 July 2020, HM Treasury published the Government response to the consultation on restricting exit payments in the public sector. This was followed by the publication of draft regulations for capping public sector exit payments on 22 July which includes a list of employers who will be covered by the cap.

The Regulations will need to be approved by both houses of parliament and will come into force 21 days after that process is complete. We are expecting revised H M T Directions and guidance on the implementation of the cap and the waiver process.

We understand that the Regulations will affect L G P S members in England and Wales who currently qualify for an unreduced pension because of redundancy or efficiency retirement. If the cap is breached, then the member may have to take a reduced pension. M H C L G is looking at options to introduce choice to allow members in this position to opt for a deferred pension instead. We also expect the introduction of a standard strain cost calculation so that the cap will apply equally to members across the country.

You can read more information about the policy on the Public sector exit payments cap page of www.lgpsboard.org.

Employer resources and bite-size training

The Local Government Association (LGA) has amended their website to make it easier for employers to access information and resources that are relevant to them. An Employer resources section has been introduced and contains:
• guides and documents relevant to LGPS employers in England and Wales
• employer bite-size training starting with six modules on assumed pensionable pay -
• information about other training and resources for employers.
Further employer training modules will be added in due course and we will keep you posted.

Employer cost cap process

Alongside the Public service pension schemes consultation, the Government made an announcement on the cost control mechanism that applies to all public service pension schemes.

The announcement confirms that:
• the cost control mechanism pause will be lifted, and the cost control element of the 2016 valuations process will be completed
• the cost of addressing the discrimination identified in the McCloud judgment will be included in this process.

The SAB (England and Wales) will consider its position on the SAB employer cost cap process in the coming weeks.

We will of course keep you updated as we learn more.

Devon Fund Debtor invoices – Payments

When paying a Devon Fund debtor invoice please check the bank details, we often have invoices paid to Devon County Council, which delays the allocation and may result in unnecessary payment reminders. Please see the link to payment of invoices https://www.peninsulapensions.org.uk/lgps-member/payment-methods/k to payment of invoices.

Change to the ESS Leaver process

You will no longer need to do the Notification stage when you submit a Leaver form via ESS. All you need to do now is download the form, complete it and then upload it directly to the members record. As you have direct access, the leaver form is instantly attached to the member’s record and an internal process will create a task for us to action.
A new Employer Guide to ESS is now on our website but the Leaver Process and Work Activities Videos are currently under re-construction - new and improved videos will be available soon!

Altair update

Please note that Altair Employer Services will not be available from 7am on the 27th August while we take delivery of a system upgrade. The upgrade is expected to take most of the morning, but we will contact you again as soon as the delivery is complete and the system is available again.
Please accept our apologies for any inconvenience caused.

Payment of Pension Fund Contributions

Please remember to inform us and the relevant Finance team each time you have paid your pension scheme contributions, by filling in the Monthly Contributions Form. If we receive the returns right away with the payments and they are correct - it makes the process so much easier, so please ensure that you build this form into your procedures.

If you are a Somerset Pension Fund employer, please contact the Corporate Finance Team for a copy of the Monthly Contribution Return: Corporatefinancepens@somerset.gov.uk

If you are a Devon Pension Fund Employer, you will need to use the online EAS5 form. If you have not already registered, a login can be obtained from the Employer and Communications Team.

Consultation on amendments to the statutory underpin

The Ministry of Housing, Communities & Local Government (MHCLG) has published a consultation on amendments to the statutory underpin which seeks views on proposed changes to the LGPS in England and Wales to remove the unlawful age discrimination identified in the McCloud judgment. The 12-week consultation will close on 8 October 2020. Links in the McCloud FAQs for members have been updated to let members know that the consultation has been launched and to provide a link.

An apology

Peninsula Pensions recently sent an email to all scheme employers in respect of training courses being delivered by the LGA. Unfortunately recipients were able to view the email addresses for all other employers within the distribution list. We would like to sincerely apologise for this error and confirm that future communications will be issued via Pensions Line to ensure that this does not happen again. We would also like to remind recipients of the email that they are not authorised to use email addresses disclosed to them unless they are already communicating with that organisation or individual and have a legitimate reason to continue communicating with them.

Calculation of Assumed Pensionable Pay

There has been a query concerning how regular lump sum payments should be treated by an employer when working out APP.

Earlier guidance suggested that you had to assess whether any lump sum payment paid in the 12 months before the start of the APP period would be paid again during the period that APP applies and then decide whether to add that lump sum back into the APP annual rate.

We have been informed by LGA that their current interpretation of the regulations is that you must assess whether any lump sum payment is regular. Any regular lump sum paid in the 12 months before the start of the APP period must be added into the annual APP figure. You do not need to assess how long the APP period is likely to last, nor the likelihood that the lump sum would have been paid again during that period.

You can learn more about calculating APP in their Payroll guide and from the employer bite-size training modules on the Employer Resources pages of their website.

Somerset CC Pension Fund Funding Strategy Statement

A consultation regarding the Somerset CC Pension Fund Funding Strategy Statement has been sent to all employers and feedback is requested by 4th September. If anyone requires more information or has any questions please contact Anton Sweet (asweet@somerset.gov.uk)

Giving you notice…

During September, we will be sending you a questionnaire asking how you usually pay the strain cost for employer consent retirements and whether you have a set policy for 1 payment or over 3 years. Please take the time to engage with us and submit your answers so that we can compile an internal database with a view to reduce queries and the amount of information required on the Leaver form. Look out for a Special Edition of Pensions Line.

Provision of Data

It is important that you put processes in place to retain access to historical payroll information when you change payroll provider so that you can continue to fulfil your responsibilities as a Scheme employer

TUPEs & New Academies

If you are outsourcing services and have a number of staff who will be subject to TUPE and moving to a new employer or your school is converting to an Academy or moving MAT, please do not submit any leaver forms as this will complicate the process – instead there is a staff data capture spreadsheet you can complete on our website.

Keep us updated

Please remember to keep us updated with any changes in staff responsible for completing our forms (authorised signatories). This can be done by completing our via our online form.

You can also use this form to notify us of your IDRP Stage 1 Appeals Officer and any delegated authorised contacts.

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