The Local Government (Early Termination of Employment) (Discretionary Compensation)(England and Wales) Regulations 2000

1.  In these Regulations—

“the 1971 Act” means the Pensions (Increase) Act 1971(1);

“the 1996 Act” means the Employment Rights Act 1996(2);

“the 1965 Regulations” means the Redundancy Payments Pensions Regulations 1965(3);

“the 1974 Regulations” means the Local Government Superannuation Regulations 1974(4);

“the 1986 Regulations” means the Local Government Superannuation Regulations 1986(5);

“the 1995 Regulations” means the Local Government Pension Scheme Regulations 1995(6);

“the 1996 Regulations” means the Local Government (Discretionary Payments) Regulations 1996(7);

“annual compensation”, except in Parts VI to VIII, means compensation under regulation 10 ignoring the effect of any provision of Part V or Part VI;

“annual rate”—

(a)

of annual compensation and of any other official pension, includes increases under the 1971 Act;

(b)

of an occupational pension which is not an official pension, includes increases under any enactment, contract, scheme or other arrangement;

“appropriate authority”, in relation to any person, means the authority who are the administering authority in relation to him for the purposes of the Pension Regulations or who would be that authority but for a relevant disqualification and on the relevant assumptions;

“appropriate percentage” means the percentage specified in the Table in Schedule 2 in relation to a person of the eligible person’s age and sex;

“assumed member” means a person in respect of whom his employing authority are satisfied that, but for a relevant disqualification, he would be, or be treated as, a Scheme member;

“base rate” means the base rate for the time being quoted by the reference banks or, where there is for the time being more than one such base rate, the rate which, when the base rate quoted by each bank is ranked in a descending sequence of seven, is fourth in the sequence;

“basic entitlement” means the amount to which a person is entitled under regulation 11, ignoring the effect of any provision of Part V;

“calculated amount” means the amount calculated in accordance with regulation 13(4);

“commencement date” means the date on which these Regulations come into force;

“concurrent employment” means employment with a Scheme employer or a relevant Scottish employer held concurrently with a terminated employment and during the period of 12 months ending immediately before the termination date;

“earlier cessation” means the cessation of an employment which began before the employment which ended on the termination date;

“earlier extra service” means—

(a)

a period by which a person’s total membership has been increased; or

(b)

a period of service with which he has been credited,

before the termination date, for the purpose of calculating a retirement payment or, if more than one period has been granted, the total of them;

“eligible child”, in relation to another person, means—

(a)

his legitimate child if—

(i)

a child of a marriage which took place on or before the termination date; and

(ii)

born not later than 12 months after that date;

(b)

his adopted child if the adoption took place on or before the termination date;

(c)

a child who was wholly or mainly dependent on him both on the termination date and at the time of his death, being—

(i)

his step-child or illegitimate child;

(ii)

an adopted child of someone else who married the person before the termination date; or

(iii)

a child accepted by him as a member of the family;

“employing authority”, in relation to a person, means—

(a)

a body listed in Schedule 2 (Scheme employers) to the Pension Regulations by whom he is employed immediately before the termination date; or

(b)

a body specified in regulation 4(6) (resolution bodies)(8) of those Regulations—

(i)

by whom he is employed immediately before the termination date; and

(ii)

which has passed a relevant resolution, within the meaning of regulation 4(5) of those Regulations, which covers him;

“excepted payment”, in relation to a person’s terminated employment, means—

(a)

a redundancy payment to which he is entitled under Part VI of the 1978 Act or Part IX of the 1996 Act or compensation under Part II of these Regulations in respect of that employment (including, in each case, any amount by which that payment is reduced in accordance with the 1965 Regulations); or

(b)

a payment in respect of that employment under regulations, or under provisions having effect as provisions of regulations, under section 7 of the 1972 Act; or

(c)

a payment in lieu of annual or other leave to which he is entitled in respect of that employment; or

(d)

so much of any payment in lieu of notice of termination of that employment as is equal to or less than the pay that he would have received if he had remained in that employment for three months after the termination date;

“excluded employment” means a period of employment—

(a)

in an independent school (within the meaning of section 463 of the Education Act 1996)(9); or

(b)

in relation to which a pension or other benefits (other than a refund of contributions) is being or has been paid under an occupational pension scheme;

“lump sum compensation” means compensation under regulation 10;

“NRD” has the same meaning as in regulation 25 of the Pension Regulations;

“new employment” means employment with an employing authority or a relevant Scottish employer which a person enters after his termination date;

“occupational pension”, in relation to a person, means a pension, other than a lump sum, to which he has become entitled (whether or not it is being paid) which is—

(a)

an employment-linked pension which is payable under an enactment (other than the Social Security Contributions and Benefits Act 1992(10), the 1995 Regulations, or the Pension Regulations), contract, scheme or other arrangement, including a personal pension scheme in relation to which the Secretary of State has paid contributions under section 1 of the Social Security Act 1986(11) or section 43 of the Pension Schemes Act 1993(12); or

(b)

a pension derived from the payment of a transfer value calculated by reference to pension rights (contingent or otherwise) arising under the 1995 Regulations or the Pension Regulations, or arising with respect to a pension of a kind mentioned in paragraph (a);

“official increases”, in relation to a pension or pay, means the increases (if any) by which an annual pension of an amount equal to the annual rate of that pension or pay would have been increased under the 1971 Act during the period ending immediately before the day preceding that on which the person in question entered the new employment, on the assumptions—

(a)

that the pension was specified in Part II of Schedule 2 to the 1971 Act and began for the purposes of that Act on the day the pension actually began or, as the case may be, the day after that on which he ceased to hold the employment; and

(b)

that he was 55 on that day;

“official pension” has the same meaning as in the 1971 Act;

“paying authority” means—

(a)

if regulation 4(3) applies, the authority designated in accordance with Schedule 3;

(b)

if regulation 31(2) applies, the appropriate authority;

(c)

in any other case, the employing authority;

“Pension Regulations” means the Local Government Pension Scheme Regulations 1997(13);

“periodic payment”—

(a)

in relation to a surviving spouse or a child (see regulations 22, 23 and 24), means an instalment of an allowance for life or other period granted to or in respect of the spouse or the child by the deceased’s employing authority under an enactment, contract, scheme or arrangement with that authority in consequence of, or as compensation for, the loss of the deceased’s terminated employment;

(b)

in relation to any other person, means an instalment of an allowance granted to him by his employing authority under an enactment, contract, scheme or arrangement with that authority in consequence of, or as compensation for, the loss of a terminated employment,

but in neither case includes annual compensation or a payment which is an excepted payment in relation to that employment;

“qualifying employment” in relation to an employee, means a period of employment (other than excluded employment) in relation to which the Scheme employer is satisfied that the employee was in local government employment within the meaning of the Pension Regulations or pensionable employment within the meaning of the Teachers Superannuation (Consolidation) Regulations 1988(14) or of the National Health Service Pension Scheme Regulations 1995(15) or was in employment which would have been such employment but for a relevant disqualification;

“reference banks” means the seven largest institutions for the time being which—

(a)

are authorised by the Bank of England under the Banking Act 1987(16);

(b)

are incorporated in and carrying on within the United Kingdom a deposit-taking business (as defined in section 6, but subject to any order under section 7 of that Act); and

(c)

quote a base rate in sterling,

and for this definition the size of an institution at any time is to be determined by reference to the gross assets denominated in sterling of that institution, together with any subsidiary (as defined in section 736 of the Companies Act 1985(17)), as shown in the audited end-of-year accounts last published before that time;

“relevant amount”—

(a)

if a retirement grant under Part II of the Pension Regulations is payable, means 50 per cent. of the sum of—

(i)

the amount of his pensionable pay; and

(ii)

the amount of the official increases by which an official pension at the annual rate of that pensionable pay would have been increased, if it had begun and first qualified for such increases on the day after the termination date;

(b)

if no such grant is payable, means 66⅔ per cent. of that sum;

“relevant assumptions” means that it is to be assumed that—

(a)

during any period of special service a person was a Scheme member;

(b)

a person’s total period of membership included any periods of special service other than unpaid periods of absence from duty;

(c)

with respect to a period of special service (applying the preceding assumptions), an election or determination under paragraph 2 of Schedule D1 to the 1995 Regulations (optional alternative relevant periods for calculating pensionable remuneration(18)—

(i)

had been made in a case within paragraph 3 of that Schedule (other than a case within paragraph 4 or 5(19); and

(ii)

had not been made in a case within paragraph 4 or 5 of that Schedule or regulation 22 (other final pay periods) or 23 (permanent reductions in pay; certificates of pension benefits) of the Pension Regulations; and

(d)

paragraph 6(b) (periods of absence) of Schedule D1 to the 1995 Regulations did not apply with respect to any period of special service;

“relevant credited period” means the period awarded in accordance with regulation 8(2);

“relevant disqualification”—

(a)

in relation to an occupational pension scheme which applies to qualifying employment, means any of (i) to (v) below, as the result of which (either alone or taken together) a person has not become, or has ceased to be, a member of the scheme, or has been treated as ineligible for membership of it—

(i)

the failure of a medical examination required for such membership;

(ii)

the making of any election to opt out of, or the absence of an election to opt into, such membership with respect to any period of employment;

(iii)

a restriction excluding some part-time employment from being employment to which the Scheme applies;

(iv)

in the case of the Scheme, ineligibility under regulation B2(2) of the 1995 Regulations;

(v)

in the case of the Scheme and a manual worker, failure to complete a period of continuous employment required for membership of the Scheme;

(b)

in any other context, means any of (i) to (vii) below, as the result of which (either alone or taken together) a person has not become, has ceased to be, or has not been treated as, a Scheme member—

(i)

the failure of a medical examination required under regulation B1(16) of the 1986 Regulations(20);

(ii)

the making, before 6th April 1988, of an election under regulation B1(15B) of those Regulations(21);

(iii)

the making before, or the absence on, 6th April 1988 of an election under regulation B1(18) of, or Part IV of Schedule 2 to, those Regulations(22);

(iv)

the absence of an election under regulation B1A of, or paragraph 1(b) of Part III of Schedule 2 to, those Regulations;

(v)

the absence of an application under regulation B10 of the 1995 Regulations or regulation 7 of the Pension Regulations for membership;

(vi)

the giving of a notification under regulation B1B of the 1986 Regulations, regulation B12 of the 1995 Regulations or regulation 8 of the Pension Regulations;

(vii)

the making or absence of an election under regulation 25(3)(b) of the Local Government Superannuation (Miscellaneous Provisions) Regulations 1987(23);

“relevant fraction”—

(a)

in regulation 22, means—

(i)

if the deceased was entitled to lump sum compensation, one half;

(ii)

if not, three eighths;

(b)

in regulation 24, means—

(i)

where there is a surviving spouse to whom surviving spouse’s short-term or long-term compensation is payable (or would be payable but for regulation 21(5)) and one eligible child, one quarter;

(ii)

where there is such a surviving spouse and two or more eligible children, one half;

(iii)

where there is no such surviving spouse, or in respect of any period after the death of such a surviving spouse, and one eligible child, one third;

(iv)

where there is no such surviving spouse, or in respect of any period after the death of such a surviving spouse, and two or more eligible children, two thirds;

“relevant period”—

(a)

in relation to lump sum compensation, means one month;

(b)

in relation to other compensation, means one year;

“relevant Scottish employer” means a scheduled body within the meaning of the Local Government Superannuation (Scotland) Regulations 1987(24) and Scottish Homes;

“retirement payment” means one of the following—

(a)

retirement compensation under an Act, under regulations under section 259 of the 1972 Act, or a similar instrument, on account of loss of employment;

(b)

benefit under regulations under section 260 (provision for early retirement in lieu of compensation for loss of office) of the 1972 Act or a similar instrument;

(c)

compensation under any scheme under section 1 of the Superannuation Act 1972(25), or a similar instrument, on account of his retirement in the public interest;

(d)

compensation under an Act or under these Regulations or any other regulations under section 24 of the Superannuation Act 1972(26), or a similar instrument, on account of his ceasing to hold an employment with an authority for any of the reasons referred to in (a), (b) or (c),

and in this definition “similar instrument” means any instrument to similar effect made under any provision contained in any other enactment;

“retirement pension” means a pension under regulation 25, 26, 27 or 31 of the Pension Regulations, a single pension under regulation 29 of those Regulations or an occupational pension;

“Scheme employer” means an employing authority and, in relation to any person who is an admission agreement employee (as defined in the Pension Regulations)(27), his admission body (as so defined);

“Scheme member” means a person who is a member of the Scheme;

“special service” means—

(a)

any period of employment with respect to which the employing authority are satisfed that—

(i)

but for a relevant disqualification, the person concerned would have been, or would have been treated as, a member of the Scheme; or

(ii)

paragraph (i) would have applied but for the fact that the employment was qualifying part-time employment within the meaning of Part IV of Schedule 2 to the Local Government Superannuation Regulations 1986(28); and

(b)

any period of former employment ending before the person concerned began the terminated employment, but only if any interval between the end of that former employment and the beginning of the terminated employment during which he was not employed by an employing authority or a relevant Scottish employer was shorter than one month and two days;

“terminated employment” means employment which is terminated in one of the circumstances set out in regulation 4(1)(29);

“termination date” means the date on which a person leaves his terminated employment;

“termination payment” means the total amount of any lump sums, other than lump sum compensation or any payment which is an excepted payment in relation to a terminated employment, paid under an enactment, contract, scheme or arrangement to a person in consequence of, or as compensation for, the loss of a terminated employment; and

“total membership” includes any period of special service (other than special service consisting of periods of unpaid leave or other unpaid absence from duty).

“Transitional Regulations” means the Local Government Pension Scheme (Transitional Provisions) Regulations 1997(30)

(1)

1971 c. 56; see section 17(1).

(2)

1996 c. 18.

(3)

S.I. 1965/1932.

(4)

S.I. 1974/520; amended by other instruments listed in Part III of Schedule 20 to the Local Government Superannuation Regulations 1986 (1986/24).

(5)

S.I. 1986/24; amended by other instruments listed in Schedule M5 to the Local Government Pension Scheme Regulations 1995 (S.I. 1995/(1019)).

(6)

S.I. 1995/1019. Relevant definitions are in Schedule A1 to the 1995 Regulations. Amendments to Schedule A1 are not relevant to these Regulations.

(7)

S.I. 1996/1680; amended by S.I. 1997/1613, 1998/559, 1999/502, 2311.

(8)

Regulation 4(6) was amended by S.I. 1998/1238, S.I. 1999/1212, S.I. 2000/1164.

(9)

1996 c. 56.

(10)

1992 c. 4.

(11)

S.I. 1986 c. 50. Section 1 was repealed by the Pension Schemes Act 1993 (c. 48), section 188 and Schedule 5.

(12)

1993 c. 48. Section 43 was amended by the Pension Schemes Act 1995 (c. 26), Schedule 5, paragraph 42.

(13)

S.I. 1997/1612; amended by S.I. 1998/1238, 1999/1212 and 3438, 2000/1005, 1164.

(14)

S.I. 1988/1652; a relevant amending instrument is S.I. 1995/2004.

(15)

S.I. 1995/300.

(16)

1987 c. 22.

(17)

1985 c. 6, section 736 was substituted by the Companies Act 1989 (c. 40), section 144.

(18)

Schedule D1 continues to have effect as mentioned in S.I. 1997/1613.

(19)

Paragraph 4 of Schedule D1 was amended by S.I. 1996/1428.

(20)

See Schedule M4 to the Local Government Pension Scheme Regulations 1995 (S.I. 1995/1019).

(21)

Regulation B1(15B) was omitted by S.I. 1988/466 with effect from 6th April 1988.

(22)

Regulation B1(18) was omitted and Part IV of Schedule 2 amended by S.I. 1988/466.

(23)

S.I. 1987/293; revoked by the 1995 Regulations.

(24)

S.I. 1987/1850. “Scheduled body” is defined in Schedule 1.

(25)

1972 c. 11. Section 1 was amended by the Pensions (Miscellaneous Provisions) Act 1990 (c. 7), section 8, and the Pension Schemes Act 1993 (c. 38), Schedule 8, paragraph 6.

(26)

Section 24 was amended by the Police Pensions Act 1976 (c. 35), Schedule 2, paragraph 10.

(27)

The definition of “admission agreement employee” was amended by S.I. 2000/1005.

(28)

S.I. 1986/24; revoked by S.I. 1995/1019 with the exception of Parts K and L. Part K was amended by S.I. 1995/1019, Schedule M6, paragraphs 2 and 3 and by S.I. 1995/1497.

(29)

S.I. 1987/293; revoked by the 1995 Regulations.

(30)

S.I. 1997/1613; amended by S.I. 1998/2118, 1999/1212.