Looking forward to your retirement

Employer Guide

Contents

Introduction 1

Legal Background 2

Scheme Overview 3

Employer responsibilties and expected standards 4

New Employer/Scheme Member 5

Auto Enrolment 6

Employee/er Contribution Rates 7

Pensionable Pay 8

Discretions 9

Changes and Options during Membership 11

Multiple Employments 12

50/50 Pension Scheme

13

Unpaid Leave of absence/Strikes/Maternity 14

Opting-out of the Local Government Pension Scheme 15

Leaving the Local Government Pension Scheme 16

Leaving with retirement options (age 55 or over)/Strain costs 17

Ill Health Retirement

18

Death benefits

20

Pensionable pay (on leaving) 21

Assumed pensionable pay(APP) 25

Employer Self Service/Data Collection 27

Need Help 28

Page 1 of 28

Introduction

This guide has been designed to help employers of the Devon and Somerset Pension

Funds, administered by Peninsula Pensions. Its purpose is to help you as an employer to

carry out your statutory responsibilities.

Peninsula Pensions who are we and what do we do?

Peninsula Pensions is provided by Devon County Council and is a shared service with

Somerset County Council. We administer the Local Government Pension Scheme, as one of

89 funds across England and Wales. Peninsula Pensions has in excess of 400 participating

employers throughout Devon and Somerset and a scheme membership of more than 100,000

members.

The Local Government Pension Scheme(LGPS)

The LGPS is a statutory public service scheme, so the scheme’s benefits and terms are set

out in regulations passed through parliament. It has members in local government,

education from primary to higher (non-teaching staff), police staff, the voluntary sector,

environment agencies and private contractors.

Prior to April 2014 the LGPS was a final salary pension scheme based on the final 365

days pensionable pay and pensionable service. From April 2014 the LGPS became a

‘Career Average Revalued Earnings’(CARE) pension scheme based on the actual annual

salary each year.

Benefits from the scheme include;-

• A secure annual pension.

• A tax free lump sum.

• The option to draw pension from age 55 to 75.

• Death benefit cover.

• The 50/50 pension scheme.

Page 2 of 28

Legal Background

The current legislation in force for the Local Government Pension Scheme are:-

The Local Government Pension Regulations 2013

https://www.lgpsregs.org/schemeregs/lgpsregs2013.php

The Local Government Pension Scheme (Transitional Provisions, Savings and Amendment)

Regulations 2014

https://www.lgpsregs.org/schemeregs/tpregs2014.php

The Local Government Pension Scheme(LGPS) is a registered public service pension

scheme under Chapter 2 of Part 4 of the Finance Act 2004. It achieved automatic

registration by virtue of Part 1 of Schedule 36 of that Act (because the scheme was,

immediately before 6 April 2006, both a retirement benefits scheme approved under

Chapter I of Part XIV of the Income and Corporation Taxes Act 1988 and a relevant

statutory scheme under section 611A of that Act). This means, for example, that scheme

members receive tax relief on contributions. It complies with the relevant provisions of the

Pension Schemes Act 1993, the Pensions Act 1995 and the Pensions Act 2004.

The LGPS meets the government's standards under the automatic enrolment provisions of

the Pensions Act 2008.

General Data Protection Regulations(GDRP)

For further information go to the GDRP section on our web site.

Page 3 of 28

Scheme Overview

The Three Tranches

The Local Government Pension Scheme has three tranches, and depending on when the

member joined the scheme as to which tranches they have membership in. A member may

have membership in all three of the tranches ;-

Benefits of being in the scheme

• Guaranteed defined benefit funded pension scheme.

• Individual pension accounts – pension benefits calculated on a yearly basis with

accrual rate of 1/49 of actual pensionable pay(from 1st April 2014)

• Protected final salary benefits for pensionable service before April 2014.

• Option to take a tax free cash lump sum.

• Index-linked pensions based on consumer price index (CPI)

• Built in Ill-health benefits/life cover.

• Retirement between 55 and state pension age.

• Dependants pensions.

Page 4 of 28

Employer responsibities and expected standards

Under the LGPS regulations it is a statutory requirement for all employers to provide their

administrators with the information they require in order to carry out their duties

Regulation 80 within the LGPS 2013 Scheme Regulations states:

Exchange of information

80. — (1) A Scheme employer must—

(a) inform the appropriate administering authority of all decisions made by

the employer under regulation 72 (first instance decisions) or by an

adjudicator appointed by the Scheme employer under regulation 74

(applications for adjudication of disagreements) concerning members; and

(b) give that authority such other information as it requires for

discharging its Scheme Functions

• Automatically enrol new staff into the LGPS (if eligible)

• Ensure scheme contributions are deducted and paid over to the Fund each

month

• Notify Pensions of any Starters, Opt-outs and changes to employees’ records

• Notify Pensions of Opt-Outs and Leavers and calculate Pensionable Pay (Pre-&

Post 1/4/2014)

• Provide member data to Pensions when requested

• Appoint Internal Dispute Resolution Procedure (IDRP) Stage 1 Officer - 2 stage

complaints procedure for scheme members

• Appoint an Independent Registered Medical Practitioner (IRMP) to assess ill

health retirement applications

• Record keeping - HMRC rules state need to keep records for 6 years plus

current but TPR states data to be kept for as long as Pensions need it – needed

until the death of the last dependent.

• Keep your Pensions Discretions policy up to date

• Ensure action is taken if advised of new legislation or procedures

• Notify members of any relevant changes to pension scheme when advised by

Pensions

• Ensure member records are accurate and provide Peninsula Pensions with

what we need to administer LGPS.

Expected Standards

Expected standards of performance for both employers and Peninsula Pensions are

outlined in our Administration Strategy document on the web site.

Page 5 of 28

New Employee/Scheme Member

Any person you appoint to a role may have the right to join the Local Government Pension

Scheme depending on what type of employer you are; -

Contract of three months or more

Contract of less than three months

Scheduled Body • County councils and district councils, • Police and Crime Commissioners/Chief

Constables • Academies, Universities, Free Schools

and Studio Schools

Employee Right Automatic Entry

Employee Right By Election

Designating Body (Town & Parish Councils)

Employer Choice Automatic Entry

Employer Choice By Election

Admission Body (Open) (Housing Associations, charities, etc) can arrange a legal admission agreement with

Peninsula Pensions

Employer Choice Automatic Entry

Employer Choice By Election

Admission Body (Closed) No right to membership

No right to membership

What you need to do

When you appoint a new employee, you must inform them that they will

automatically become a member of the Local Government Pension Scheme (unless

the contract is for less than three months or the employee is an eligible job holder

(See Auto Enrolment section and pages on our website) when you must inform

them that they can elect to join the scheme). This must be done within a month of

them either becoming or being eligible to be a member of the scheme. A leaflet can

be found on our web site; -

• Inform you payroll provider to collect contributions from the date of appointment

(unless the contact is for less than three months – entry from the pay period after

member elects to join)

If you administer your own payroll you will need to determine the employee

contribution rate in accordance with salary bandings for each post (see member

contributions section)

Notify Peninsula Pensions of the new starter via our Employer Self Service:

https://employers.peninsulapensions.org.uk/employerservicesweb/login

Page 6 of 28

Deduct contributions and submit both employee & employer contributions to the

pension fund. Deadlines are different for both Devon and Somerset fund and full

details can be found on our website.(notification of amounts MUST be sent to Pensions and the

relevant Finance team each month so that the payments can be reconciled - done via the Monthly

Contributions (EAS5) form on our website)

Notify us of the actual pensionable pay(CARE) monthly using the monthly CARE

data template.

Auto Enrolment

Automatic enrolment is a Government initiative to help more people save for later life

through a pension scheme at work. The legislation runs separately from the Local

Government Pension Scheme. The LGPS Pension Scheme regulations already cover

contractual automatic enrolment; -

all eligible employees under the age of 75 are contractually enrolled into the LGPS

on appointment unless their contract of employment is for less than three months.

Employees with a contract of employment for less than three months will not be

contractually enrolled but will be automatically enrolled if they are an eligible job

holder.

Opted out members will be brought back into the LGPS during the re-enrolment

process three year cycle.

What you need to do

As an employer it is your responsibility to ensure that you are adhering to the legislation.

Further guidance can be found on our website and on the Local Government Pension

Scheme website.

Page 7 of 28

Employee Contribution Rates

The rate of contribution that a member pays to the LGPS is decided by a group of bandings

which change annually.

The latest contribution bandings can be found here

If an employee wishes to join the 50/50 pension scheme the contribution is half of the

main scheme rate.

What you need to do

Decide the contribution rate, for each job the member holds by estimating the

actual annual pay earned at the date of joining or on 1st April each year and which

section of the pension scheme they are joining (main scheme or 50/50 scheme).

Decide on how and when an employees pay banding is assessed i.e. Annually, on

pay change, overtime average etc. The rate may be adjusted during the year or in

April of the following year.

Inform the member in writing which band they have been allocated each year and

inform them of the appeals proceedure.

Employer Contribution Rates

Employer contributions are expressed as a percentage of the member’s actual pensionable

pay. The rate will change every three years following the actuarial valuation of the pension

fund. Peninsula Pensions will inform you of the correct contribution rate following an

actuarial valuation, together with a copy of the actuary’s report. You will need to inform us

and the finance team each time you make a payment by filling in the monthly contributions

form EAS5 ( if you do not have employer access to our website -please email finance.peninsulaemployers-

mailbox@devon.gov.uk) Deadlines are different for both Devon and Somerset fund and full

details can be found on our website.

Page 8 of 28

Pensionable Pay

Definition

Pensionable pay is the pay the member pays pension contributions on. It is all salary,

wages, fees and other payments paid to the employee, and any benefit specified in the

employees’ contract of employment as being pensionable. Exclusions shown in LGPS Reg

20 (2)

There are three main difference between 2008 and 2014 definitions of what is pensionable:

non-contractual overtime becomes pensionable;

payment in consideration of loss of future pensionable payments or benefits is now

not pensionable

any actual pay paid by Scheme employer to a reservist during Reserve Forces

Service Leave is not pensionable

Pensionable or not

Item 2008 2014

Salary Yes Yes

Performance Related Pay Yes? * Yes

Contractual Overtime Yes Yes

Non-Contractual Overtime No Yes

Travelling Expenses No No

Subsistence Expenses No No

First Aid Allowance No? * No? *

Honoraria Yes? * Yes? *

Payment in lieu of notice No No

Payment in Lieu of holidays not taken No No

*First Aid Allowance = depends if “contractual”

* Performance related pay/bonus’s 2008 has to be contractual

*Honoraria = depends what its paid for:

• if contractual and relates to role= Yes

• difference in salary = Yes

• due to overtime = No (2008) Yes (2014)

Page 9 of 28

Discretions

As a scheme employer participating in the Local Government Pension Scheme you must

formulate, publish, and keep under review a policy on all mandatory discretions you may

exercise in relation to members of the LGPS. These discretions are ways to enhance

member’s benefits but can result in costs to you as an employer.

What you need to do

Formulate your policy and publish your decisions for all mandatory discretions.

Please note you may wish to consult employees/unions before making or changing

you policy. The mandatory discretions are as follows ;-

Shared cost additional pension (Reg 16(2)(e) & 16(4)(d))*

Employer can choose to pay for APC in whole or part

Shared Cost Additional Voluntary Contribution (Reg R17 (1) and

TP15 (1) (d) and A25 (3)) Employer can choose to pay for AVC in

whole or part

Flexible Retirement (Reg 30(6)) Employers decision to offer as a

retirement option (including a drawdown option)

Waiving of actuarial reduction (Reg 30(8)) Flexible Retirement

and Early retirement (55-60)

Award of additional pension (Reg 31)** Employer APC for active

member or member leaving on redundancy/efficiency

▪ Power to ‘switch on’ the 85 year rule Employers decision to apply

the protection

Local Government (Early Termination of Employment)

(Discretionary Compensation) (England and Wales) Regulations

Each employer (other than an Admitted Body) is required to formulate

a policy in relation to discretionary compensation.

Discretions for scheme members (excluding councillor members)

who ceased active membership on or after 1.4.08 and before

1.4.14 - Still have to publish a policy in respect of your discretions for

these leavers

Pre 1st

April 204 leavers can ask for employer consent to the early

release of their deferred benefits.

Page 10 of 28

* Please note that pensions awarded under regulation 16 is reduced and

the full cost must be paid to the fund while the member is still in

employment.

**Pension purchased by the employer under regulation 31 is not reduced

so incurs additional ‘strain’ costs(can apply within 6 months of leaving)

A copy should be sent to Peninsula Pensions within 3 months of becoming a new

employer with the Devon or Somerset County Council pension funds. A copy should

be sent to Peninsula Pensions within 1 month following any revisions to your policy.

Academies need their own - One policy for Multi-Academy Trust to cover all

Academies.

Points to consider when formulating your policy

1. Costs

2. ‘Follow the Leader’ not always sensible

3. Anti-discrimination laws - Care needs to be taken that there is no

discrimination (Age – wording is free of age influence)

4. Fettering discretions (restricting or limiting) - policy should show the basis

on which you would make the decisions on the various discretions.

NB: The government has advised you should not ‘fetter your discretion’;

i.e. policies should not be so rigid or restrictive as to prevent flexibility where a

(possibly unanticipated) situation requires it.”

Your policy needs to be:

Workable – easy and definitive

Affordable – fits in with your budget

Reasonable – fair or ‘not unreasonable’

Foreseeable – affordable for the future budget (2/3 years)

For a full list of discretions, example policy template, and guidance notes, please visit our

website.

Page 11 of 28

Changes and options during membership

You will need to notify Peninsula Pensions when an employee has a change in personal

details or contractual changes in the following circumstances;

Change of name or address

Change in employment

Change in Hours

Unpaid leave of absence, maternity leave, adoption leave, and strikes

Changes of name/address or hours

These need to be submitted to us as soon as possible after the change has occurred.

What you need to do

For changes in name and address, employment, or hours please login on employer

self-service.

If you complete the forms via interface, please complete the spreadsheet relating to

the change on our website and return to: pensionsinterfaces-

mailbox@devon.gov.uk.

If you are signed up to Employer Self Service (ESS) you can upload your interface

file through ESS.

Page 12 of 28

Multiple employments

Where an employee has multiple post that are separate contracts you will need to keep

separate records.

What you need to do

In cases of multiple employments with separate contracts you will need to; -

• Keep separate data for each job

• Provide separate data for MAIN scheme and 50/50 scheme for each job

• Provide actual pensionable pay figures to include any assumed pay for each

job

• Submit separate pension forms for each separate job.

The exception to this is where there is a single employment relationship for example:

Two concurrent employments - both must be terminated

Two sequential employments without a break (i.e. promotion)

Page 13 of 28

50/50 Pension Scheme

Since 1st April 2014 there have been two sections to the Local Government Pension

Scheme; -

The main 100/100 section.

The 50/50 section.

By paying into the 50/50 section the member pay’s half the contributions for half the

benefits. During this period the member receives the same level of life and ill-health cover,

as the employer still pays the full contribution rate. The member’s pension accrues at

1/98th instead of 1/49th. The 50/50 scheme is a short-term option for a maximum period of

3 years but there is no limit to the number of times the member can move between the two

schemes. If the member has multiple contracts they are able to pay into the 50/50 on one

employment and the full scheme on others. The election form to join is on our website.

What you need to do

Bring the member into the 50/50 scheme on election.

Notify Peninsula Pensions of 50/50 actual pensionable pay(CARE) periods and

changes between the full scheme and 50/50 scheme.

Bring the member back into the main scheme after a nil pay period and auto-

enrolment date.(can elect to go back into the 50/50 scheme).

For futher guidence please visit our website.

Page 14 of 28

Unpaid Leave of absence, maternity/adoption, and strikes

When a member has an unpaid break, a period of unpaid maternity, or strike break, and no

pay is received they will have a period of ‘lost’ pension.

On return to work the member can elect to buy the ‘lost’ pension by paying Additional

Pension Contributions (APC) or if election within 30 days Shared Cost Additional Pension

Contributions (SCAPC).

What you need to do

• Inform the member on return to work of the SCAPC option – notification must state:

• the amount of lost pensionable pay

• Instructions on how they can purchase the ‘lost pension’

• Refer members to the Absences – Buying Lost Pension section of our website.

This links to the on-line calculator and forms for member to send to employer

and Peninsula Pensions.

• If the member opts to pay for the period of ‘lost pension’ within 30 days of

returning to work (or longer period if you allow – you can extend the period by

which the member has to elect to pay) then the member will pay 1/3rd of the

cost and you will pay 2/3rd’s of the (SCAPC)

Further guidance is available on our website

Page 15 of 28

Opting-Out of the LGPS

Employees are automatically enrolled into the Local Government Pension Scheme (if

eligible). Membership to the Local Government Pension Scheme is not compulsory so a

member may opt-out of the pension scheme at any time (will be brought back in on the

LGPS enrolment date). They are free to opt back in and out as many times as they wish.

Members can obtain the opt-out form from our web site. Please note you must not issue

forms to the employee.

What you need to do

When an employee completes an opt-out form you must forward to your payroll section for

actioning. It should then be dealt with as follows; -

Period in the LGPS

pension scheme

Action required

Less than three months

Form should be forwarded to Payroll who should then

refund any contribution through the member’s pay,

complete the bottom of opt-out form and forward to

Peninsula Pensions.

More than three months

but less than two years

Form should be forwarded to Payroll who should then

bring the member out of the pension scheme. A leaver’s

form (including member contributions) together with the

opt out form should be forwarded to Peninsula Pensions.

For further information please visit our website

Page 16 of 28

Leaving the Local Government Pension Scheme

Leaving with less than 2 years in the LGPS(Under age 55)

If a member leaves the LGPS with less than 2 years in the pension scheme, and they don’t have any

other posts where they are contributing, they have entitlement to a refund of contributions or a

transfer of pension rights to another pension scheme.

What you need to do

If a member leaves the scheme with less than 2 years in the LGPS you are required to complete the

leavers form on our website and complete the employee contributions section.

Leaving with more than 2 years in the LGPS(Under age 55)

If a member leaves the LGPS with more than 2 years in the pension scheme they have entitlement to

deferred benefits or a transfer of pension rights to another pension scheme.

What you need to do

If a member leaves the scheme with more than 2 years in the LGPS you are required to complete the

leavers form on our website.

Page 17 of 28

Retirement from the LGPS (age 55 or over)

Full benefits are payable from Normal Retirement Age (linked to State Pension Age).

Benefits can be paid early; -

• Redundancy/Efficiency from age 55 - Payable immediately with no reduction

for early payment applied (possible Strain cost – see below).

• Flexible Retirement – Reduction of grade or hours from age 55 with employers’

consent. Pension can be brought into payment early (possible Strain cost – see

below). (Employers discretion to offer Flexible Retirement)

• Ill health retirement – Pension could be brought into payment immediately

from any age and may also be enhanced. Three Tiers depending on ability to

undertake future employment.

• Voluntary retirement from age 55 with actuarial reduction.

Strain Costs

The funding of the LGPS is based on all members retiring at their normal retirement age. If

benefits are paid before this the pension fund suffers a detriment resulting in a ‘strain’

cost. If you as an employer agree to the early release of a member’s pension, then you are

responsible for covering the cost in the following situation; -

If a member is made redundant or leaves on efficiency grounds and is age 55 or

over.

If a member is retired at age 55 or over on flexible retirement grounds.

• If you choose to waive a member’s actuarial reduction and the member has left on

flexible retirement.

If you are considering releasing an employee on any of the above grounds, please see

‘requesting estimates’.

Page 18 of 28

Ill Health Retirement

Active members with 2 years or more within the LGPS who’s employment is terminated

due to ill health may be eligible for ill health retirement. For this to occur they must be

deemed to be permanently incapable of carrying out the duties of their role and not

immediately capable of undertaking gainful employment (at least 30 hours a week for

12 months). There are 3 different tiers of ill health for an active scheme member; -

Tier

Degree/Level of ill health LGPS pension and

enhancement level

1 Unlikely to be capable of

undertaking any gainful

employment before normal

retirement age.

Unlikely to be capable of undertaking

any gainful employment within 3 years

of leaving employment but likely to be

capable before normal retirement age

2

Unlikely to be capable of

undertaking any gainful

employment within 3 years of

leaving employment but likely to be

capable before normal retirement

age

Accrued pension rights plus an

enhancement of membership of 25%

of prospective benefits up to normal

retirement age

3

Likely to be capable of undertaking

gainful employment within 3 years

of leaving employment or normal

retirement age if sooner

Accrued pension rights only with no

enhancement, with award subject to

review and suspension

Deferred members may also apply for their LGPS benefits on ill health grounds.

Depending on when the member left employment there are slightly different rules that

apply. Further details are available in out ill-health guide.

Page 19 of 28

What you need to do

Decide whether to terminate employment due to ill health or deferred member

on application for early release.

Complete the correct relevent ill health form and forward to your appointed

Independent Registered Practitioner(IRMP) (must be on our approved list)

• IRMP then reviews case and complete’s form with their opinion.

As the employer you then make a decision as to whether to award ill health

pension and which tier/ early release for a deferred member.

You must then notify the member of your decision and reasons behind your

decision, including the right to appeal.

Notify Peninsula Pensions of your decision enclosing the ill health forms and if

different decision from the IRMP a covering letter explaining your decision not to

follow the IRMP.

There is no direct Strain cost for ill health retirement. The cost is factored into the

scheme actuarial valuation and your employer contribution rate.

Page 20 of 28

Death benefits

The Local Government Pension Scheme provides benefits on death for an active

member, deferred member, and pensioner.

Pension payable on death

A Spouse’s pension can be payable based on 160ths of a member’s pensionable

service. This will continue for life even if the spouse re-marries. Pensions are also

payable to civil partners and co-habiting partners based on pensionable service after

April 1988. Co-habiting partner’s will need evidence of living together/financially

dependent on each other.

Death grant

A death grant of 3 times actual pensionable salary is payable if a member dies whilst in

active employment with you. There may also be a death grant payable if the member

passes away after being in receipt of their pension for less than 10 years (balance of

the 10 years payble as a death grant)

What you need to do

If a member dies whilst in active employment with you we will require a leaver’s form

completing. We will also require the assumed pensionable pay(APP) figure

completing(see guidance below)

Page 21 of 28

Pensionable Pay

When a member leaves employment we will require pensionable pay completed on the

leaver’s form. You will need to hold 2 different pensionable pay figures for employees

with pre and post 2014 LGPS membership;-

Pre 1st April 2014 Final Salary pension scheme – final 365 days pensionable pay.

Post 1st

April 2014 Career Average Revalued Earnings(CARE) – actual pensionable

pay from 1st April to 31st

March or date of leaving.

What you need to do

Pensionable Pay Pre 1st April 2014

If a member has any scheme membership in the pre-1st April 2014 final salary pension

scheme, we will require the final 365 days pensionable pay at date of leaving

employment (Not salary point).

Example 1

A member leaves employment on 30th

November 2018, we would require pensionable

pay for the period 1st December 2017 to 30th

November 2018.

If the member is part-time we would require the full time equivalent pensionable pay

for the period (not FTE salary) based on the hours the member worked.

If a member works 18.50 hours per week (37 hours per week full time equivalent)

Actual pensionable pay for the period 1st

December 2017 to 30th November 2018 is

£12000.

Calculation:-

£12000/18.50 hpw X 37 = £24000 (full time equivalent pensionable pay)

(see example over page)

Page 22 of 28

If the member has a change in working hours in the final 365 days, the pensionable

pay would need to be split with the change.

Example 2

The member works 18.5 hours per week to 31st

March 2018 then changes to 20 hours

per week from 1st April 2018. In this case you would need 2 lines on the leavers form

(£4600/18.5 X 37)(£8000/20 X 37)

Page 23 of 28

Actual Pensionable Pay Post 1st April 2014(CARE)

What you need to do

For members who have post 1st

April 2014 membership we require the actual

pensionable pay from 1st April to 31st

March the following year, or to date of

leaving.

Example 3

If a member left on 30th

November 2018 and actual pensionable pay for the period 1st

April 2017 to 31st March 2018 was £13000, and 1st

April 2018 to 30th November 2018

was £7000 this would be filled in on the leavers form as follows;-

The above figures must include any Assumed Pensionable Pay (APP) and has to be

split for any 50/50 scheme membership.

Pay Protections

Final salary(Pre 14) automatic 3 protection

If a member’s rate of pay is reduced in last 3 years to date of leaving then the last 365 day

pensionable pay, together with the previous 2 anniversary’s may be looked at in calculating

the best pay to use.

What you need to do

If one of the previous 2 years to the anniversary of the date of leaving is higher

please provide us with the final 3 years pensionable pay on the leaver’s form.

Page 24 of 28

Average of best 3 consecutive years in 13

If a member suffers a reduction in their rate of pay in the final 10 years to retirement they

can elect to look at the best 3 consecutive years in the last 13. For this to apply the

member has to elect in writing at least a month before the date of leaving.

What you need to do

• If a member elects for this option you will need to complete the previous years

pay form on our web site and submit with the leaver’s form.

Calculating full time pensionable pay for Term Time Employees

The calculation of pensionable pay for term-time member’s is dependent on which

pension fund you are part of;-

Devon Fund Employers

Term-time employees have their hours adjusted to equate to a full year and the full-time

equivalent pay is worked out by uprating the actual pay by the adjusted hours

Divide the actual hours by the whole-time equivalent hours for the week then multiply by

the week’s factor:

• For example: 25.00 (hours per week) ÷ 37.00 (FTE hours) x 44.50 (weeks

factor) ÷ 52.143 (FTE Weeks) x 100 = 57.6637%

• Then use the percentage of hours to up-rate part-time pensionable pay to the

full-time equivalent pensionable pay: £12,000 ÷ 57.6637% = £20,810.32 FTE

Somerset Fund Employers

Historically, service for term-time employees within the Somerset Fund has not been

adjusted and hours have been recorded as the hours they work. Term-time employees

should have their pay reduced according to the total number of weeks worked each year so

please provide the adjusted actual pensionable pay, (plus any additional pensionable

recurring pay), and then uprate to the full-time equivalent pay using the part-time hours.

• For example: £8.83 (hrly rate) x 18 (hours per week) x 43.1281 (weeks factor)

= £6854.78 (adjusted actual pay)

• Then uprate to a FTE = £6854.78 x 37 (FTE Hours per week) ÷ 18 (hours per

week)

= £14090.38 = FTE adjusted pay).

Please refer to pensionable pay guide for more guidance

Page 25 of 28

Assumed Pensionable Pay

Assumed pensionable pay is a notional pensionable pay figure that is used to ensure a

member’s pension is not affected by any reduction to, or suspension of, pensionable pay

due to a period of sickness or injury, or any reduction due to relevant child related leave or

reserve forces leave. The cumulative pensionable pay should be the assumed pensionable

pay and not the actual pensionable pay received (if any).

When does APP not apply?

• during any part of relevant child related leave if the pensionable pay received is

greater than the assumed pensionable pay for that period.

• during any period of unpaid additional maternity, paternity, adoption leave or

shared parental leave available at the end of relevant child related leave.

(Treated as an unpaid leave of absence = option to purchase ‘lost pension’)

•

• If the employee has a period of authorised unpaid leave of absence or is absent due

to industrial action

What you need to do

APP is calculated as an annual rate then applied to the relevant period as a proportion of

that rate. The relevant period starts on the date:

• the employee drops to reduced or no contractual pay due to sickness or injury, or

• when ‘relevant’ child related leave or reserve forces service leave commences.

a) Calculate average pensionable pay for the 3 complete months/12 complete

weeks* prior to the date of reduced/no pay**

b) Gross up to an annual figure.

c) Annual figure is then apportioned to the applicable period and replaces any pay

received.

*If 3 or 12 complete pay periods do not exist, use whatever number of complete periods are

available.

**remove any ‘lump sums’ but include any APP already credited in those 3 months - regular

lump sum payments can be included at employer’s discretion

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Example:

Month 1 = £1400

Month 2 = £2500 (including £1000 regular bonus and £100 overtime)

Month 3 = £1400

Annual rate of APP = (£1400 + £1500 + £1400) / 3 x 12) = £17200

If APP figure above is lower than the actual pensionable pay normally received,

employer may substitute a higher level of pensionable pay for the APP. NB: employer

must have regard to the pensionable pay received by the member in the previous 12

months.

APP Figure used for enhancement Tier 1 and Tier 2 Ill health and Death in Service

The APP figure is calculated in the normal way but using the average of the pensionable

pay for the 12 (weekly) or 3 (monthly) complete pay periods prior to the date of retirement

or death (including any APP credited in and relating to those pay periods).

Any regular lump sums paid in the 12 months prior can be added back into the annual

rate of APP if the employer determines there is a 'reasonable expectation' it would

again have been paid to the member*.

Has there been a reduction in contractual hours during the relevant pay periods

wholly or partly because of the condition that caused or contributed to the ill health

retirement?

If IRMP certifies Yes to this question, then the APP figure is to be calculated on the

pay the member would have received during this time – treated as if they had not been

working reduced contractual hours.

*Changes in legislation in May 2018, allows employers the discretion to use a different

pensionable pay figure that reflects the normal pay of the member over a longer period. In

doing so, an employer must have regard to the pensionable pay received by the member

in the previous 12 months.

Disclaimer: Please note that this is only a summary of Assumed Pensionable Pay. For

more information, please see the Assumed Pensionable Pay Guidance on our website.

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Employer Self Service(ESS) and Data Collections

As an employer in the LGPS you will need to access our Employer Self Service(ESS) facility. By

signing up you will have access to our Altair database over a secure connection. ESS will allow you

to;-

Advise us of new starters via an online form

Change and update member details such as hours, changes.

• Check your employee’s records to ensure the correct data is held

Produce your own estimates(Redundancy exercises avoid Peninsula Pensions turnaround

times for ‘strain’ costs)

The system is free to use and as long as you are on our contacts lists for your organisation, you should

Sign up at : https://employers.peninsulapensions.org.uk/employerservicesweb/login

When we authorise access to Employer Self Service (ESS) for an authorised contact they will be able to view all the employee’s listed under that employer number. In the case of Multi Academy Trusts (MAT’s) who report as one entity, this means that any users registered under that employer will be able to see the employee’s records for all schools within that MAT. Please note that we would not authorise access for a delegated payroll

provider unless they provide the service for all schools within the MAT.

Annual and Monthly Data Collections

There are a number of submissions that we require monthly and annually;-

As an alternative to Employer Self Service

Interface Templates: It is possible to submit information to us by interface for starters, hour

changes, address changes, and service breaks. If you would like to sign up to this please

email richard.tuck@devon.gov.uk

Care Template: This, ideally should be a monthly submission showing cumulative

CARE(actual pensionable pay) for a given year.

Annual Return Template: This is requested from you once a year and includes employee

contributions, current working hours,contributions,and full-time equivalent salary as at

31/03/XXXX. We also request CARE pay in case this has not been submitted monthly.

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Need Help

Further guidance can be found on the following web sites ;-

www.peninsulapensions.org.uk

http://www.lgpsregs.org/index.php

Peninsula Pensions Employer Team

Mark Griffin – Employer Liaison Officer – Tel: 01392 385372, direct email

Emma Davies – Senior Employer Liaison Officer – Tel 01392 386588, direct email

Shirley Cuthbert – Employer & Communications Manager – Tel 01392 385229, direct email

Beverly McCarthy - Employer & Communications Team Pensions Assistant – Tel TBC, direct email

Peninsula Pensions is provided by Devon County Council and is a shared service with Somerset County Council

www.peninsulapensions.org.uk (Updated August 2019)