Employer

Employers' Guide

Go to Contents | Go to section one | Go to section two | Go to section three |Appendices and Forms

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Section Four

17 - END OF YEAR CONTRIBUTIONS REPORTS

At the end of each financial year a listing / file containing the following information for each employee who has been a member of the LGPS during the period 1 April to 31 March must be forwarded to the Pension Section by 19th May (6 weeks from year end).

Per Employee

(ii) Surname

(iii) Forenames (or initials if forenames are not held)

(iv) Payroll reference

(v) Post Number (if used)

(vi) Total of employee’s basic pension contributions per job* (i.e. where an employee holds two or more separate contracts of employment which are individually pensionable)

(vii) Total of employee’s additional pension contributions per job*

(ix) Date employee left the LGPS.

Note: * where it is not possible to show the amount required above per job it is acceptable to report the amounts for the employee in aggregate.

Details of members of the Local Government Pension Scheme are held on a computerised system known as AXIS. At the end of each financial year details of the contributions paid by each employee are posted to the employee’s pension record.

This is done manually unless the employer is able to produce the above data in one of the following ways:

1. a file format which is acceptable to the pension computer system. A detailed specification of the format will be provided on request, or
2. a CSV file, or
3. an Excel spreadsheet

18 - ADDITIONAL VOLUNTARY CONTRIBUTIONS (AVC) SCHEME

18.1 Introduction

The Local Government Pension Scheme Regulations require Bath and NE Somerset Council, as the Administering Authority of the Avon Pension Fund, to arrange a facility whereby employees of the LGPS may elect to pay additional voluntary contributions (AVCs).

The primary AVC provider in the case of the Avon Pension Fund is Friends Provident. However, some employees may still pay AVC’s to Equitable Life.

The AVC Scheme can be used to increase:

(a) an individual’s pension on retirement
(b) a spouse’s pension following death during retirement
(c) life assurance cover for death in service
(d) a spouse’s pension following death in service.

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18.2 Payroll Implications

1. Only members of the Local Government Pension Scheme (LGPS) can contribute to the AVC Scheme.

2. Total contributions, including contributions to the LGPS, must not exceed 15% of ‘gross’ pay. Gross pay is the taxable pay before deduction of pension contributions, charity contributions and AVCs.

3. Contributions for (a) and (b) above may be either a percentage of ‘gross’ pay or flat rate. All contributions attract full tax relief at source.

4. The payroll system must be able to cope with two types of AVC percentage calculations, i.e. the additional percentage calculation and the maximum percentage (15%) calculation. For example:

4.1 Additional percentage calculation

An employee wishes to pay an additional 2.5% to the AVC Scheme

4.2 Maximum percentage calculation

An employee wishes to pay the maximum contributions possible to the AVC Scheme

5. A payroll system requires 6 pension contribution / AVC facilities, i.e.

(1) Basic pension contributions
(2) Additional pension contributions % (Purchase of pre 1972 service, added years)
(3) Additional Flat Rate pension contributions (arrears, part-time buy-back)
(4) AVC fixed %
(5) AVC Flat Rate
(6) AVC maximum %

6. Pension contributions and AVCs should be shown separately on any pay advice slips. It might also prove helpful to the employee if the AVCs to increase personal benefits and/or life assurance cover were shown separately on the pay advice slip.

7. AVCs are paid direct to the AVC provider (not the Avon Pension Fund). Friends Provident, the Fund's current provider, will train the employer to upload the information onto its website.

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19 - DISCRETIONARY COMPENSATION, INJURY ALLOWANCES, GRATUITIES

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

Briefly the above Regulations

A. provide the power for employers to base redundancy payments on actual pay where this would exceed the weekly pay limit for redundancy payment purposes as prescribed under the Employment Rights Act 1996.

B. provide the power for employers to grant "Compensatory Added Years" (CAY) to employees aged 50 or over with 5 or more years membership/notional membership who are made redundant, retired on efficiency grounds or (rarely used) cease to hold a joint appointment.

C. provide the power for employers to grant a lump sum compensation payment to employees aged 18 or over but under age 65 with at least 2 years qualifying employment who are made redundant or retired on efficiency grounds

19.2 The Local Government ( Discretionary Payments) Regulations 1996 (SI 1996 No. 1680)

Briefly the above Regulations

(i) require employers to pay an injury allowance to (or in respect of ) an employee who suffers a reduction in pay, or loses his/her job, or dies due to an injury sustained or a disease contracted as a result of anything he/she was required to do in carrying out his/her work.

(ii) provide the power for employers to award a gratuity in respect of certain periods of non-pensionable local government employment.

The Pensions Section is happy to provide employers with advice on, and interpretation of the above.

20 - MISCELLANEOUS

20.1 Contracted Out National Insurance

The Local Government Pension Scheme is a contracted-out pension scheme, therefore, any employee joining the Pension Scheme will pay contracted-out rate National Insurance contributions (NI Code D) in accordance with the National Insurance Tables issued by the Inland Revenue in document CA39.

20.2 Employer and Scheme Contracted-Out Numbers

As all members of the Pension Scheme pay contracted-out National Insurance contributions you may be required to quote the following Employer (ECON) and LGPS (SCON) Contracted Out numbers to the Inland Revenue or Contributions Agency on occasions.

ECON E 3900002 R                   SCON S 2700135 H

20.3 Arrears of Pay / Pension Contributions and National Insurance Contributions

Pension contributions and contracted-out National Insurance contributions need not be deducted if the person has already opted for and received a return of contributions. This information can be obtained from the Pensions Section.

Pension contributions must be deducted in all other circumstances and paid over (both employee’s and employer’s) in the normal way.

20.4 Training and Talks

Staff of the Pensions Section are available to give talks about the Local Government Pension Scheme to groups of employees or to train staff who are involved in pensions. If you wish to take advantage of this service please write to the Pension Benefits Manager.

20.5 Certification of Forms

The Pensions Section will require a list of all persons authorised to sign, where necessary, the forms included in Appendix 2. Form LGPS 53 will be issued for this purpose. Any amendment to the list of authorised persons must be sent to the Pensions Section.

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