7 Tweedside Park
Mr Andrew Knox
Chief Pensions Officer (Operations) http://www.sppa.gov.uk
Strathclyde Pension Fund Tel: 01896 893227
Charlotte House Fax: 01896 893214
78 Queen Street firstname.lastname@example.org
9 July 2009
LOCAL GOVERNMENT PENSION SCHEME (BENEFITS, MEMBERSHIP AND
CONTRIBUTIONS)(SCOTLAND) REGULATIONS 2008 – REGULATION 18 AND
Thank you for your letter of 15 May. I am sorry for the delay in replying.
I think it will help to clarify matters if I confirm the policy intention behind each of these
regulations. I will also discuss with our legal adviser later in the year whether it might be
appropriate to tweak the wording of these regulations to provide greater clarity (we will be
consulting in the Autumn on draft amending regulations to the LG Management and
Investment of Funds Regulations to propose certain changes related to governance which
would provide a legislative “vehicle” for such possible clarifying changes).
As you know, the intention behind regulation 18 is to provide a means for members’ to
access their pensions while continuing in employment on reduced hours or grade.
Paragraph 30 of The Heads of Agreement document, issued in January 2008 by
SLOGPAG states that –
“For workforce planning reasons, a member applying for flexible retirement is required to
obtain employer consent to reduce hours or lower grade”.
It is clear from this statement, I believe, that it is not possible for a person who has perhaps
agreed with their employer to a reduction in their hours by, let’s say, 1 hour per week for
some reason unconnected with a flexible retirement request to simply say “I am entitled to
early release of my pension under regulation 18”. Access to pension under regulation 18
can only be on the basis that the member has requested a reduction in hours or grade
specifically in connection with a request for flexible retirement under regulation 18 and in
line with their employers published policy on the exercise of that discretion.
It should also be noted that paragraph 30 of the Heads of Agreement goes on to say –
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“Where such consent is given, however [i.e. to a reduction in hours or grade in relation to a
request for flexible retirement] only applicants who are under age 60 will also have to get
their employer’s consent to access their benefits.”
Regulation 30(1) and (2) Choice of early payment of pension
The policy intention is that, under (1), a member (aged 55 or over) must leave local
government employment before they can choose to receive their pension. Under (2), of
course, if they are under 60 they require the consent of the employing or former employing
authority. The upshot is that a member aged 60 or more can access their pension provided
they have left employment. It is NOT the policy intention that they simply need to opt out of
the scheme. I understand why the phrase “or otherwise ceases to be a member…” could be
interpreted as you suggest, but I believe the legal adviser had intended it to link in with the
scenario of a person ceasing to be eligible to be in the scheme because the admission
body they worked for had ceased to be a body that was eligible for admission. I do
understand however, that the wording is perhaps misleading and will, once again, discuss it
with the legal adviser later in the year with a view to considering a possible change.
Meantime, however, I would urge you and the other pensions managers to apply regulation
30 in accordance with the policy intention.
Finally, and additionally I have been asked to mention regulation 9 - Final pay:general.
Some concerns have been raised about the prospect of members perhaps choosing the
best year of the last three years, not on the basis of it being best in terms of actual salary,
but rather on the basis that it is the best year following the addition of Pensions Increase.
The policy intention is that the member should only be permitted to choose a final pay from
the two preceding years where that final pay proves to be the higher, prior to the application
of Pensions Increase than the final pay in the last year of scheme membership.
I hope this is all helpful, but I should be happy to discuss.
Policy Manager, LGPS
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