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The legislation implementing the £95k cap on exit payments has now been signed and comes into force on 4 November 2020.
We are currently awaiting the Guidance and Directions to accompany the regulations, however, it is clear that changes proposed to the LGPS to help accommodate this will not be in place. They are still in the consultation stage, as stated in our Pensions Line of 17th September 2020.
SAB have made both HM Treasury and MHCLG aware of the predicament this puts local government employers and LGPS administering authorities in.
We can confirm though that for the period between 4 November and the date the LGPS regulations are amended:
• only exits where the cost exceeds the £95k cap will be impacted
• the statutory guidance on standard strain cost will not be effective i.e. you will continue to calculate strain cost on a local basis
• the proposals in the MHCLG consultation around limiting cash severance payments and the strain cost being reduced by the value of any statutory redundancy pay will not apply.
We will be updating our leavers forms so that employers can provide us with any redundancy payment information.
The SAB website will be updated as developments occur.
It is important that you let us if you are changing your payroll provider. We can then work with you to ensure you put processes in place to retain access to historical payroll information and continue to fulfil your responsibilities as a Scheme employer.
Please contact the Employer & Communications Team if you are considering 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 to a different Multi Academy Trust (MAT). The process can take some time so its best you let us know as soon as possible.
The transfer of these staff are dealt with differently so 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 which can then be sent to the Employer & Communications Team mailbox.
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