The Local Government Superannuation (Scotland) Amendment Regulations 1996

Explanatory Note

(This note is not part of the Regulations)

These Regulations make a number of amendments to the Local Government Superannuation (Scotland) Regulations 1987 (“the principal Regulations”). Certain provisions have retrospective effect, as authorised by section 12 of the Superannuation Act 1972: regulations 2 to 4 and 17 from 17th May 1990; regulations 12 to 15 and 18 from 28th December 1994; and regulations 5 to 11 from 2nd May 1995.

Regulation 3 removes a provision which prevented a man electing to receive an actuarially reduced pension at age 60 if that pension were less than his guaranteed minimum pension (which is payable from age 65). Regulation 17 allows a man who was unable to make such an election before the removal of the provision, and who would otherwise be time barred, to make an election within 6 months of these Regulations coming into force. Regulation 3 also alters the position of women retiring at 60 with less than 25 years' service so that they will no longer be obliged to take their pension at that age but, like men, may elect to do so.

Regulation 4 removes an inequality whereby the pension of a man retiring at age 60 with less than 25 years' service is subject to an actuarial reduction for the whole of the period of his service whereas in the case of a woman, as a consequence of a requirement of the Social Security Pensions Act 1975 (c. 60), it cannot be reduced to less than the amount of her pension in respect of her service since 6th April 1978. The amendment provides that a man’s pension should enjoy the same protection as that of a woman in respect of his service on or after 17th May 1990. The amendment further provides that the protection for both men and women lasts only until 1st April 1996.

Regulation 9 amends the principal Regulations to provide that where a scheme member dies the amount of the death gratuity shall be equal to twice pensionable remuneration, less, in certain cases, where a surviving spouse’s long-term pension is payable under regulation E5, an amount equal to two-eightieths of pensionable remuneration multiplied by the length in years of any reckonable service before 1st April 1972.

Regulation 10 amends the principal Regulations to allow an administering authority, at the time a retirement pension is first payable to a former pensionable employee, to commute for a lump sum that element of the retirement pension which exceeds or would exceed the guaranteed minimum pension. The guaranteed minimum pension or a sum equal thereto will continue to be payable, where appropriate. This power applies only if the administering authority is satisfied, acting on medical advice, that the former employee is seriously ill with a life expectancy of less than one year.

Regulations 5 to 8 make amendments consequential upon regulation 10.

Regulation 11 provides that interest will be payable by the administering authority if the lump sum is not paid within one month of the due date, being the date on which a retirement pension first becomes payable.

Regulation 16 confers a right on a person, in certain circumstances, to opt that regulations 3 to 11 shall not apply.

Regulation 12 makes two amendments to regulation J13 of the principal Regulations which regulates the legal position of certain persons who have been members of the Local Government Superannuation Scheme (“the Scheme”) but choose to become subject to another pension scheme. The first amendment is to clarify the connection between regulations J13 and J14. The second amendment removes the requirement for the other superannuation scheme to be a contracted-out scheme within the meaning of the Social Security Pensions Act 1975.

Regulation 13 substitutes a new regulation J14. The former regulation J14 dealt only with persons who under regulation J13 chose to become subject to another pension scheme. The new regulation deals also with transfer of pension rights from the Scheme to a different pension scheme in circumstances where persons are no longer eligible to remain in the Scheme either because the undertaking in which they are employed has been transferred to a body which is not a scheduled or admitted body or because the body by which they are employed ceases to be a scheduled or admitted body.

The new regulation J14 applies to transfers of one or more persons at the same time. The calculation of the transfer value is a matter to be determined by the actuary to the appropriate Scheme superannuation fund. This replaces the formula in Schedule 16 to the principal Regulations and, in respect of transfers of more than 100 persons, the formula previously found in Schedule 18 to the principal Regulations. Schedule 18 is deleted by regulation 15.

Regulation 13 also inserts two new regulations as regulations J14A and J14B. The effect of these is to apply the provisions of regulation J14 in two further circumstances where a transfer between superannuation funds occurs. The first case is where an admitted body ceases to have an admission agreement with one administering authority and enters into an admission agreement with a different administering authority. The second is where an undertaking is transferred by a scheduled body and the body carrying on that undertaking enters into an admission agreement with a different administering authority from the administering authority which maintained the superannuation fund to which the scheduled body contributed in respect of the employees transferred with the undertaking.

Regulation 14 makes an amendment consequential on regulation 13.

Regulation 18 makes saving provision for any transfers that have taken place between 28th December 1994 and the coming into force of these Regulations. It also makes certain transitional provisions in relation to that period.