Employer FAQs

Our LGPS Employer Top FAQs cover some really useful topics.

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There two actions that need to be taken to update LPPA of changes to payroll responsibilities: arrange for website access so that the new payroll provider can successfully submit information to LPPA. And secondly, update LPPA with relevant contacts.

Website access

If you are a member of the Lancashire or Cumbria LGPS pension fund you need to complete a 3rd party authorisation form (see below) confirming the details of the new payroll provider, this gives LPPA the relevant authority from the employer to accept data from the new payroll provider.

The new payroll provider will also need to complete an authorisation form which will grant them access to the employer’s area of the website, as well as provide them with the relevant access to submit data on behalf of the LGPS employer. The authorisation form (see below) must be authorised by someone from the LGPS employer.

3rd Party Authorisation Form – to give a 3rd party payroll provider the authority to submit information on behalf of the LGPS employer

Employer Authorisation Form – for access to the employer’s area of the website

If you are part of LPFA / Bexley / Brent / Ealing / Havering / Hertfordshire or Newham LGPS fund, please email details of the new payroll provider to the relevant email address below:

LondonData@localpensionspartnership.org.uk – LPFA / Bexley / Newham / Ealing Brentdatateam@locapensionspartnership.org.uk Haveringdatateam@localpensionspartnership.org.uk Hertsprojectsteam@localpensionspartnership.org.uk

Please confirm which LGPS fund you are a member of, the name of the LGPS employer along with details of your new payroll provider and the key contact/s that will need access to YourFund. You can do this by completing the ‘YourFund Site Administrator Request Form’ which can be found in the area for ‘employers’ on your fund website.

Update contacts

If you are part of the Lancashire or Cumbria fund, within the employees area of the website under the maintain contacts section, contact details can be reviewed and amended. All relevant contacts should be recorded here, including contacts of the 3rd party payroll provider if applicable.  Ensuring contact details are up to date means all relevant contacts will receive all related updates from LPPA, also meaning we can contact the appropriate individuals for queries and requests for information if necessary.

If you are part of LPFA / Bexley / Brent / Ealing / Havering / Hertfordshire or Newham LGPS fund the ‘Employer

Contact Update Form’ should be completed and emailed to engagement@localpensionspartnership.org.uk.

Important note

It is important to remember that even if you outsource your payroll duties to a 3rd party, the responsibility for the submission of data in a timely and accurate and manner fundamentally lies with the Local Government employer. Therefore, LPPA may contact you for information if we are not consistently receiving data from your 3rd party provider.

The responsibility for the decision-making process surrounding ill health benefits for both active and deferred members lie solely with the Local Government employer.

To award ill health benefits for an active or a deferred member, employers must, at a minimum, obtain a recommendation from an Independent Registered Medical Practitioner (IRMP). This must be considered along with any other relevant information to arrive at a decision to award ill health benefits to a scheme member, as well as the relevant criteria laid out in the LGPS regulations.

For ill health benefits payable to a deferred member, generally this is an unreduced pension payable from any age for the rest of their life. (Subject to conditions).

For active members, benefits are paid under a ‘tier’ arrangement depending on how long it is likely to be (if at all) the member will be well enough to return to gainful employment. (Subject to conditions).

Employers may wish to request pension estimates from LPPA in the process of an ill health retirement which can be done via the employers’ area of the website or YourFund depending on which portal you use.

Ill health can be a complicated and an extremely sensitive process which often results in challenges and appeals from scheme members. Therefore, it is important that employers take all the relevant steps in the decision-making process as well as giving full consideration to the relevant scheme regulations. For any further guidance during an ill health retirement case please contact engagement@localpensionspartnership.org.uk

With employer’s consent, flexible retirement allows active members who have attained 55 or over to start drawing all or some of their pension benefits while remaining employed on reduced hours or at a less senior position on a lower salary. (providing the member has met the ‘2-year-vesting period’)

Upon flexible retirement, the member remains an active member and continues to build up further benefits. Each LGPS employer must have a written policy that covers flexible retirement, which should set out the circumstances in which they would consent to flexible retirement requests.

In addition, employers can also agree to waive all or part of any early payment reductions. This must also be included in the written policy.

Employers may incur a pension strain cost as a result of consenting to a flexible retirement request. Where it has been agreed to waive all or some of the early payment reductions. Employers are also likely incurring a cost where the member has rule-of-85 protections and takes flexible retirement before age 60.

We recommend always to obtain an estimate of the pension strain cost before consenting to any flexible retirement requests.

 

Assumed pensionable pay is designed to protect members CARE scheme benefits when they are undertaking leave for the following reasons:

  • Ordinary maternity / paternity / adoption leave
  • Paid parental bereavement leave
  • Additional maternity / adoption or shared parental leave where the member has received some pay
  • Reserved forces leave
  • Sick / injury leave (even if the employee has received no pay).

During the absences outlined above the employee contributions should be based on the pay they are in receipt of (if any), whereas the employer contributions must be based on the value of Assumed Pensionable Pay if this is more than the pay that they member is in receipt of. If the member is on reserved forces leave the employer contributions are payable by the MOD.

For information on how to calculate APP, please see  LGPS guides and sample documents, as well as the APP calculator which you can find in the employers area of your pension website.

Pensions increase for 2020/21 is 1.7%. A news article has been published on each of the fund websites with more details. An article on pensions increase also features in the pensioner newsletter. This is published on the relevant fund websites as well as on My Pension Online in the documents section.

The triannual valuation of the fund has just been completed and employers have been contacted by their retrospective pension funds with the results of the valuation, the valuation schedules are shared with the finance contact held for your organisation. Any employers who have not received their valuation schedule, firstly check with your finance department that they have not received it, if not then please contact your administering authority.

A revised leaver form should be completed and submitted as soon as possible.

If you are part of the Lancashire or Cumbria fund you should be using the ‘Leaver form- with pensionable pay calculator’ or the online leaver form it would be sensible to include a comment in the notes section of the revised leaver form to advise LPPA to disregard the information on the previous form.

If you are part of the LPFA / Bexley / Brent / Ealing / Havering / Hertfordshire or Newham LGPS fund you should be using the leaver form within YourFund. At the start of the leaver form there is the option to indicate that you are submitting a revised leaver form. Please indicate ‘yes’ and complete the form with the revised information.

Sending us an email to  askpensions@localpensionspartnership.org.uk would also be helpful ahead of submitting the revised leaver form as this will stop us from processing the leaver form and possibly paying the benefits based on the incorrect leaver form.

(1)  An employee’s pensionable pay is the total of—

(a) all the salary, wages, fees and other payments paid to the employee; and

(b) any benefit specified in the employee’s contract of employment as being a pensionable emolument.

 

(2)  But an employee’s pensionable pay does not include—

(a) any sum which has not had income tax liability determined on it;

(b) any travelling, subsistence or other allowance paid in respect of expenses incurred in relation to the employment;

(c) any payment in consideration of loss of holidays;

(d) any payment in lieu of notice to terminate a contract of employment;

(e) any payment as an inducement not to terminate employment before the payment is made;

(f) any amount treated as the money value to the employee of the provision of a motor vehicle or any amount paid in lieu of such provision;

(g)     any payment in consideration of loss of future pensionable payments or benefits;

(h)     any award of compensation (excluding any sum representing arrears of pay) for the purpose of achieving equal pay in relation to other employees;

(i) any payment made by the Scheme employer to a member on reserve forces leave;

(j) returning officer, or acting returning officer fees other than fees paid in respect of –

I) local government elections,
II) elections for the National Assembly for Wales,
III)  Parliamentary elections, or
IV) European Parliamentary

Pensionable pay is used to calculate ‘CARE benefits’, or benefits accrued under the career average revalued earnings scheme. CARE benefits apply from 01/04/2020.

Pensionable pay for CARE benefits is all payments made to an employee for any work done associated with their contract of employment (as outlined below). The main differences between ‘CARE’ pay and pay used to calculate final salary benefits is that: none-contractual overtime is deemed pensionable pay for the calculation of CARE benefits; payments should be included based on when they have been paid rather than when they have been ‘earned’ and CARE pay should be the actual pensionable pay paid to the employee rather than the full time equivalent amount which you should provide for the calculation of ‘final pay’.

(1) An employee’s pensionable pay is the total of—

(a) all the salary, wages, fees and other payments paid to him for his own use in respect of his employment; and

(b) any other payment or benefit specified in his contract of employment as being a pensionable emolument.

 

(2) An employee’s pensionable pay does not include—

(a) payments for non-contractual overtime;

(b) any travelling, subsistence or other allowance paid in respect of expenses incurred in relation to the employment;

(c) any payment in consideration of loss of holidays;

(d) any payment in lieu of notice to terminate his contract of employment;

(e) any payment as an inducement not to terminate his employment before the payment is made; (f) the amount of any supplement paid—

(i) by the Environment Agency; or

(ii) to an employee whose employment is transferred on 1st April 2010, under a staff transfer scheme from the Learning and Skills Council for England to a local authority or to London Councils Limited, in recognition of the difference in contribution rates between members of the principal civil service pension scheme and the Scheme; or

(g) any award of compensation (excluding any sum representing arrears of pay) for the purposes of achieving equal pay in relation to other employees.

 

(3) No sum may be taken into account in calculating pensionable pay unless income tax liability has been determined on it.

You should provide a final pay figure for any leavers who have membership in the scheme pre 01/04/2014. Final pay is the payments that relate to the final pay period which is generally the final 365 days of employment. Final pay should always be scaled up to a full time equivalent for part time employees.

If you are part of the Lancashire or Cumbria LGPS fund you will be familiar with the ‘Leaver form – including pensionable pay calculator’ or the online leaver form. This field has been removed from the pensionable pay calculator; we would encourage employers to use this in replacement of the leave form where possible. Many of the fields that are already supplied to LPPA by the monthly data collection file have been removed from the pensionable pay calculator. LPPA can accept this in replacement of the online leaver form.

If you still prefer to use the online leaver form, the fields asking for contracted out earnings will still appear if you are submitting a leaver that has less than 2 years membership. However, you can leave these fields if they don’t apply to the period and move to the next screen. Please note we only require contracted out earnings when the 2-year period covers any membership pre 01/04/2016.

If you are part of the LPFA / Bexley / Brent / Ealing / Havering / Hertfordshire or Newham LGPS fund you will be familiar with the leaver form within YourFund. Here you will need to put a notional value in the contracted earnings section, we would recommend using 1.00.

 

Auto-enrolment is an employer responsibility, LPPA are the administers of the scheme that employers are offering under automatic enrolment. Auto-enrolment is a government initiative governed by The Pensions Regulator (TPR); therefore, it is always best to check the details and requirements directly with TPR to ensure that you are fully compliant.

 

For more information surrounding auto-enrolment and your responsibilities as an employer contact TPR:

Contact The Pensions Regulator

Automatic enrolment detailed guidance

I can’t find the information I’m looking for.

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