P1.—(1) The superannuation fund, other than any further fund established under the Local Government Superannuation (Funds) (Scotland) Regulations 1986(1), maintained immediately before 21st December 1987 under the 1974 Regulations—
(a)by each regional council,
(b)by the Orkney Islands Council, and
(c)by the Shetland Islands Council,
shall be maintained by those bodies for the purposes of these Regulations and for the purposes of regulations P2, P3, P4 and P10 shall be known as “the fund”.
(2) Any further fund established under the Local Government Superannuation (Funds) Scotland) Regulations 1986 by a council mentioned in paragraph (1) immediately before 21st December 1987 shall subject to regulation P4 be maintained by those bodies for the purposes of these Regulations.
(3) Every regional council and islands council who by virtue of paragraph (1) is administering a superannuation fund and who enters into an admission agreement under regulation B6 may establish and administer for the purposes of these Regulations a further superannuation fund or funds which shall be known as the further fund or further funds respectively.
P2.—(1) Upon the establishment of a further fund the fund shall be apportioned and the provisions of Schedule 19 shall apply in all cases for the purposes of such apportionment and for the transfer of assets from the fund to the further fund as those provisions apply where such a change of employment occurs as is mentioned in regulation Q2(6); and as if—
(a)references to the previous fund to be apportioned under that Schedule were references to the fund, and references to the fund of the new fund authority were references to the further fund; and
(b)paragraph 7 of that Schedule and, in paragraph 8, the words “Subject to paragraph 7” were omitted.
(2) The administering authority shall bear the costs of the apportionment required by this regulation.
P3.—(1) In respect of any employee of a body specified in column (1) of Schedule 20 who is a person admitted to the fund or a further fund, that fund shall bear the cost of increases of pensions, allowances and gratuities under the provisions of the Pensions (Increase) Act 1971(2) where and to such extent as those pensions, allowances and gratuities relate to service undertaken by the employee following the date referred to in column (2) of Schedule 20 in relation to his employing body or the date of his admission to the fund or a further fund, if later.
(2) For the purposes of paragraph (1) above the costs of pensions increase attributable to any part of the pension, allowance or gratuity payable by virtue of—
(a)an election under regulation D12 or D13 of the 1974 Regulations or regulation C5 or C6;
(b)any increase in reckonable service made in accordance with the provisions of Schedule 9 to the 1974 Regulations or the provisions of Schedule 10; or
(c)a transfer value received under the provisions of Part P or Part Q of the 1974 Regulations or Part J or Part Q of these Regulations;
shall be borne by that fund to which the employee has been admitted.
(3) Where under the provisions of regulation P4 a further fund is dissolved, the fund shall subsequent to the date of such dissolution meet the cost of pensions increase so far as these costs would have been met by the further fund in respect of liabilities arising before the date of dissolution.
P4.—(1) The administering authority may if they think fit dissolve a further fund and transfer the assets thereof to the fund, and thereupon—
(a)any entitlement to participate in the benefits of the further fund shall become an entitlement to participate in the benefits of the fund; and
(b)the fund shall become the appropriate superannuation fund for those participants.
(2) The administering authority may not dissolve a further fund unless they have given notice of not less than 28 days to the bodies whose employees are entitled to participate in that fund of their intention to dissolve the fund.
P5. Every administering authority shall in each year carry and credit to the appropriate superannuation funds—
(a)the amounts contributed during the year by pensionable employees entitled to participate in the benefits of that fund,
(b)the employer’s contributions payable by scheduled bodies under regulation P12,
(c)all dividends and interest arising during the year out of the investment or use of that fund or any part thereof, and any capital moneys resulting from the realisation of investments or from the repayment of moneys used temporarily for other authorised purposes,
(d)the amount of any additional contributory payments received by the administering authority under these Regulations, and
(e)any other sum which the administering authority may become liable to carry to that fund under these Regulations.
P6.—(1) Subject to paragraphs (3) to (7), an administering authority—
(a)shall invest any moneys forming part of the superannuation fund or funds maintained by them (“fund moneys”) that are not for the time being required to meet payments to be made out of the funds under these Regulations, and
(b)may vary the manner in which any fund moneys are for the time being invested.
(2) For the purposes of this regulation and of regulation P5(c), investment includes—
(a)any contract which by virtue of section 45 of the Finance Act 1984(3) (extension of pension schemes' tax exemptions to dealings in financial futures and traded options) is to be regarded as an investment for the purposes of the enactments referred to in that section, and
(b)use by the administering authority for any purpose for which they have a statutory borrowing power.
(3) On the total of any fund moneys used by them and for the time being not repaid an administering authority shall pay interest to the fund at a rate no lower than the lowest rate at which that amount could have been borrowed by them at arm’s length, otherwise than by way of overdraft from a bank, at 7 days' notice.
(4) An administering authority shall not—
(a)make any investment in securities of companies other than listed securities so as to cause the total value of such investments (except investments made in accordance with a scheme under section 11 of the Trustee Investments Act 1961(4) to exceed 10% of the value at the time of all investments of fund moneys, or
(b)make any investment, other than—
(i)an investment made in accordance with a scheme under section 11 of the Trustee Investments Act 1961, or
(ii)an investment falling within paragraph 1 of Part I or paragraph 1 or 2 of Part II of Schedule 1 to that Act, or
(iii)a deposit with an institution authorised for the purposes of section 3 of the Banking Act 1987(5) or with a person for the time being specified in Schedule 2 to that Act,
so as to result in more than 5% of the value at the time of all investments of any fund’s moneys being represented by a single holding, or
(c)make any deposit falling within sub-paragraph (b)(iii) so as to bring the aggregate of any fund’s moneys deposited with any one bank, institution or person other than the National Savings Bank to an amount which exceeds 10% of the value at the time of all investments of that fund’s moneys, or
(d)lend to any person other than Her Majesty’s Government in the United Kingdom or the Government of the Isle of Man, or use as mentioned in paragraph (2), or deposit with a person specified in paragraph 12 or 13 of Schedule 2 to the Banking Act 1987, any fund moneys so as to bring the aggregate of any fund’s moneys so lent, used or deposited to an amount which exceeds 10% of the value at the time of all investments of that fund’s moneys.
(5) For the purposes of paragraph (4)(d) moneys are not lent if they are invested in registered securities to which section 1 of the Stock Transfer Act 1963(6) applies or in listed securities.
(6) In the discharge of their functions under this regulation an administering authority shall have regard—
(a)to the need for diversification of investments of fund moneys,
(b)to the suitability of investments of any description of investment proposed and of any investment proposed as an investment of that description, and
(c)to proper advice, obtained at reasonable intervals.
(7) Paragraph (6)(c) does not apply where functions under this regulation are lawfully discharged, under arrangements made under section 56 of the Local Government (Scotland) Act 1973(7) or otherwise, by an officer who is competent to give proper advice.
(8) Where any fund moneys are used as mentioned in paragraph (2), sub-paragraphs (2) and (3) of paragraph 25 of Schedule 3 to the Local Government (Scotland) Act 1975(8) shall apply as they apply in the case of money so used under that paragraph; but except as aforesaid that paragraph shall not apply to a superannuation fund maintained under these Regulations.
(9) An administering authority may pay out of fund moneys any costs, charges and expenses incurred by them in the discharge of their functions under this regulation.
(10) For the purposes of this regulation—
“companies” includes companies established under the law of any territory outside the United Kingdom;
“listed securities” means securities in respect of which a listing has been granted and not withdrawn—
on a stock exchange in the United Kingdom which is a recognised stock exchange within the meaning of the Prevention of Fraud (Investments) Act 1958(9), or
on a stock exchange outside the United Kingdom of international repute;
“local authority” means a local authority within the meaning of the Local Government (Scotland) Act 1973 or the Local Government Act 1972(10), the Common Council of the City of London, the Council of the Isles of Scilly, and a district council within the meaning of the Local Government (Northern Ireland) Act l972(11);
“proper advice” means the advice of a person, including an officer of theirs, who is reasonably believed by the administering authority to be qualified by his ability in, and practical experience of, financial matters;
“securities” includes shares, stock and debentures;
“single holding” means investments—
in securities of, or in units or other shares of the investments subject to the trusts of unit trust schemes managed by, or in loans to or deposits with, any one body, or
in the acquisition, development or management of, or in any advance of money upon the security of, any separate interest in any one item of heritable property, or
in the acquisition of any one item of moveable property;
and the value at any time of all investments of fund moneys is to be taken to include the amount of any fund moneys used as mentioned in paragraph (2) and for the time being not repaid.
P7. As soon as may be after an audit of any of their superannuation funds an administering authority shall send each body whose employees contribute to that fund copies of the revenue account and balance sheet of the fund and of any report by the auditor.
P8.—(1) Every administering authority shall obtain an actuarial valuation of the assets and liabilities of each of their superannuation funds as at 31st March in the year 1990 and in every fifth year thereafter, together with a report by the actuary and shall for that purpose provide the actuary with the consolidated revenue account of each fund and such other information as he may require.
(2) Unless the Secretary of State allows an extended period, the valuation and report are to be obtained within 21 months from the date as at which the valuation is made.
(3) Forthwith upon receiving any such valuation and report an administering authority shall—
(a)send copies of them to the Secretary of State and to each body whose employees contribute to the fund,
(b)send the Secretary of State a copy of the consolidated revenue account with which the actuary was provided, and
(c)unless the report contains a summary of the assets of the fund at the date as at which the valuation was made, send the Secretary of State such a summary.
P9.—(1) Every administering authority shall, as soon as is reasonably practicable after obtaining a valuation under regulation P8, obtain from the same actuary a certificate for each fund specifying—
(a)the common rate of employer’s contribution, and
(b)any individual adjustments,
for each year of the period of 5 years beginning with 1st April third following the date as at which the valuation was made.
(2) The common rate of employer’s contribution is the percentage of their pensionable employees' contributions to a fund during the year under regulation C2 or C3 which should in the actuary’s opinion be paid to that fund, so as to ensure its solvency, by all bodies whose employees contribute to it, having regard to—
(a)the existing and prospective liabilities of the fund arising from circumstances common to all those bodies, and
(b)the desirability of maintaining as nearly constant a rate as possible.
(3) An individual adjustment is any percentage or amount by which in the actuary’s opinion contributions at the common rate should in the case of a particular body be increased or reduced having regard to existing or prospective—
(a)liabilities of the fund, or
(b)benefits accruing to the fund,
arising from circumstances peculiar to that body.
(4) Forthwith upon receiving a certificate under this regulation an administering authority shall send a copy of it to the Secretary of State and to each body whose employees contribute to the fund.
(5) If—
(a)the common rate for the first year of the period to which an actuary’s certificate relates (“the new rate”) is less than the common rate for the last year of the period immediately preceding the period to which the certificate relates (“the preceding period”), and
(b)the certificate has been obtained more than 6 months before the end of the preceding period,
the new rate shall, if the actuary and the administering authority so agree, have effect for the whole or part of the last year of the preceding period.
P10. The administering authority shall, upon the establishment of a further fund, obtain from an actuary a certificate in respect of that further fund in accordance with the requirements of regulation P9 but for the period specified in regulation P8(1) there shall be substituted the period beginning with the date of the establishment of the further fund until the date of coming into effect of the rate specified by the actuary under regulation P8 for each fund following the first actuarial valuation of the original fund after the establishment of the further fund.
P11. Where under the provisions of regulation P3 the cost of pensions increase is to be met by a fund, the actuary, when setting a contribution rate for the purposes of regulation P9 or PlO for an employer specified in column (1) of Schedule 20, shall set a rate which shall be sufficient to cover the cost of the liabilities to be met from that fund including the cost of pensions increase under the Pensions (Increase) Act 1971 insofar as the latter cost is not met by other payments received by the fund.
P12.—(1) A scheduled body shall contribute to the appropriate superannuation fund in each year of any period of 5 years for which a certificate is required under regulation P9 at the common rate increased or, as the case may be, reduced by any individual adjustment which has been specified for the year in respect of the employing authority under regulation P9(1)(b).
(2) A scheduled body shall pay the contributions required by paragraph (1) at the intervals determined under regulation P15.
(3) If all or part of any sum due under paragraph (1) remains unpaid at the end of the period of one month after the date on which it becomes due, or of any subsequent period of one month, the employing authority shall pay to the appropriate fund a further contribution equal to one-twelfth of a year’s interest, at 1% above what was the base rate at the end of the first day of that month or period, on the amount remaining unpaid.
(4) Interest paid under paragraph (3) shall be carried to the appropriate superannuation fund.
P13.—(1) Where immediately before 21st December 1987 any payments remained to be made by an employee under regulation D10 (added years) or D11 (payments under former Regulations for added years) of the 1974 Regulations, his employing authority shall, so long as he remains in their employment, pay to the appropriate superannuation fund—
(a)contributions equal to the amounts payable by the employee under regulation C9(2), or
(b)where the amounts payable by the employee—
(i)were reduced under proviso (ii) to regulation 12(3) of the Benefits Regulations or the proviso to paragraph 1 of Schedule 6 to the 1974 Regulations, or
(ii)were or are reduced by virtue of the payment of a lump sum under Schedule 4 to the 1974 Regulations or Schedule 8 to these Regulations,
contributions equal to the amounts that would have been payable by the employee but for the reduction.
(2) Where on the employee’s ceasing to hold his employment the employing authority agree to pay a sum under paragraph 2A of Schedule 5 to the 1974 Regulations and the employee pays the required amount for the purposes of that paragraph, the employing authority shall pay the agreed sum to the appropriate superannuation fund before the end of the period of one month beginning on the date of the payment by the employee.
(3) If all or part of any sum due under the provisions of this regulation remains unpaid at the end of the period of one month after the date on which it becomes due, or of any subsequent period of one month, the employing authority shall pay to the administering authority a further sum equal to one-twelfth of a year’s interest, at 1 per cent above what was the base rate at the end of the first day of the period, on the amount remaining unpaid.
(4) Payments made in pursuance of paragraph (3) shall be paid into the appropriate superannuation fund.
(5) Where by virtue of paragraph 6 of Schedule 5 to the 1974 Regulations an election under regulation D10 of the 1974 Regulations continues to have effect, then for the purposes of this regulation the employing authority in whose employment the employee again became a pensionable employee shall be deemed from the date of his again becoming a pensionable employee to be the employing authority who gave consent to the election under regulation D10 of the 1974 Regulations.
P14. Any extra charge on the appropriate superannuation fund resulting from—
(a)a determination under regulation D4 of the 1974 Regulations (previous employment under an officer to be treated as non contributing service), or
(b)a resolution under regulation D9 of the 1974 Regulations (non contributing service to be treated as contributing service), or
(c)a resolution under regulation D14 of the 1974 Regulations or regulation D7 of these Regulations (increase of reckonable service), or
(d)an additional benefit granted under regulation E13 of the 1974 Regulations or regulation E13 of these Regulations (additional benefits for female nursing staff),
shall be repaid to that fund by the scheduled body concerned.
P15.—(1) Every scheduled body who are not an administering authority shall pay to the appropriate administering authority, at such intervals of not more than 12 months as that authority may determine—
(a)all amounts from time to time deducted from the remuneration of their pensionable employees under these Regulations,
(b)any amounts received by them under regulation C4, by deduction from remuneration or otherwise, during the interval,
(c)any amount due under regulation P13(1) and (5),
(d)any extra charge payable under regulation P14, the amount of which has been notified to them by the administering authority during the interval, and
(e)a contribution towards the cost of the administration of the fund of which their pensionable employees are members.
(2) The annual amount of the contributions payable under paragraph (1)(e) is to be agreed between the body concerned and the administering authority or, in default of agreement, determined by the Secretary of State.
(3) Payments made in pursuance of, and interest paid under paragraph (6) on sums due under, paragraph (1)(a) to (d) shall be carried to the appropriate superannuation fund.
(4) Subject to paragraph (5), every payment under paragraph (1)(a) is to be accompanied by a statement showing—
(a)the name and remuneration of each of the pensionable employees in relation to whom the payment is made,
(b)the amounts comprised in the payment which represent deductions from the remuneration of each of those employees and the periods in respect of which the deductions were made,
(c)the amount of the remuneration of those employees from or in respect of whom deductions have not been made, and
(d)the names of any pensionable employees from whose remuneration no deductions have been made.
(5) An administering authority may direct that, instead of complying with paragraph (4), the bodies making payments to them under paragraph (1)(a) are to provide them with the information mentioned in paragraph (4) in such form, and at such intervals of not more than 12 months, as may be specified in the direct1on.
(6) If all or part of any sum due under the provisions of this regulation remains unpaid at the end of the period of one month after the date on which it becomes due, or of any subsequent period of one month, the employing authority shall pay to the administering authority a further sum equal to one-twelfth of a year’s interest, at one per cent above what was the base rate at the end of the first day of the period, on the amount remaining unpaid.
P16.—(1) Where under regulation E16 a person elects to receive a combined benefit, or where under regulation E18(1) the benefits in respect of any person fall to be calculated as a combined benefit in accordance with regulation E16, and the superannuation fund concerned is not the same in the case of the employments in respect of which the benefits become payable, then the fund authority maintaining the fund out of which the combined benefit has become payable (in this regulation referred to as the “second fund authority”) shall intimate to the fund authority maintaining the fund out of which the retirement pension was payable (in this regulation referred to as the “first fund authority”) that such a combined benefit has become payable.
(2) Where a first fund authority receives an intimation in terms of paragraph (1), that authority in lieu of any payments of benefits to or in respect of such a person shall make payments in accordance with paragraph (3) out of its superannuation fund to the second fund authority for the credit of its superannuation fund.
(3) The payments to be made for the purposes of paragraph (2) are to be equivalent in amount to the payments which would have been payable from the fund maintained by the first fund authority, but for the operation of either—
(a)regulation E16 in relation to the person who elected to receive combined benefits in terms of that regulation commencing with the date of his election, or
(b)regulation E18(1) in relation to the person or persons entitled to combined benefits in terms of that regulation commencing with the date of the death of the pensionable employee concerned in further pensionable employment,
and such payments (which shall comprise all sums due in respect of the period immediately prior to the date of payment) shall be made at quarterly intervals on the last day of March, June, September and December respectively or at such longer intervals as the fund authorities concerned may agree.
(4) Whenever all or part of any payment due under the foregoing provisions of this regulation remains unpaid at the end of the period of one month after the date on which it becomes due, or any subsequent period of one month, the first fund authority shall pay to the second fund authority a further sum equal to one-twelfth of a year’s interest, at one per cent above what was the base rate at the end of the first day of that period, on the amount remaining unpaid.
(5) Where after the combined benefit becomes payable the first fund authority make any payment in respect of the retirement pension to a person appearing to them to be entitled to it, the amount of that payment shall be deducted—
(a)by the second fund authority from the combined benefit payable to the pensioner, and
(b)by the first fund authority from the amount to be paid by them under paragraphs (2) and (3).
P17. Any increase in a pension which is required by virtue of sections 41A to 41C (protection of pensions) of the Pensions Act shall be paid out of the appropriate superannuation fund.
1963 c. 18; section 1 was amended by virtue of the Interpretation Act 1889 (c. 63), section 38(1), and by the Finance Act 1964 (c. 49), Schedule 9, and the Post Office Act 1969 (c. 48), section 108(1)(f).
1973 c. 65; section 56 was amended by the Local Government and Planning (Scotland) Act 1982 (c. 43), section 32.