A Welcome from Jean Hinks, Bath and North East Somerset Council Resources Director
Welcome to the latest issue of Avon Pension News. This issue is later than normal as it has been held back to include important changes to
the Local Government Pension Scheme from April this year.
Details of these are contained within the newsletter. Please see below for what else is included.
Employers Conference
Actuarial Valuation - 31 March 2004
Part Time Worker’s Claims: Update
Pension Clinics
Pension Scheme of the Year Awards 2003
Death Grant Nomination Forms - A reminder
CONTACT US:
Avon Pension Fund, Floor 3 South, Riverside, Temple Street, Keynsham
BS31 1LA
Telephone: 01225 477000
Facsimile: 01225 395258
Email: avon_pension@bathnes.gov.uk
Please quote your National Insurance number and the
name of your employer when ringing us or writing.
Please direct your comments and feedback about this newsletter to the Fund’s Marketing & Communications Officer, Martin Downes.
Either email him or telephone him on 01225 395280
Audio tape, Large print and Braille in English can be
provided and also translated into other languages. For further information
please contact Avon Pension News on 01225 395280
Annual Benefit Statements are
on the way
Until now local government pension schemes have not been required by law to provide members with an Annual Benefit Statement in
respect of their pension entitlement earned as a member of the Avon Pension Fund. Legislation has, however, been introduced to require all
Pension Funds to provide their members with Statements by April 2005 and annually thereafter.
The Avon Pension Fund will in fact be producing Annual Benefit Statements earlier than that for all current FULL-TIME members of the Fund
- during 2004. Part-timers however, due to the more complex nature of their work patterns and records, and deferred members (those who
have left their employers but have not yet had their benefits put into payment) will not receive Statements until April 2005.
If you disagree with the accuracy of any of the factual information on the statement your receive, you are encouraged to tell Payroll, Personnel or the Avon Pension Fund who will investigate the position and correct
your pension record if necessary. With over 35,000 active members there are bound to be a large volume of queries. Please therefore be
patient if your query is not dealt with immediately.
Who will get your money if you die?
Details of any nominee for Death benefits will be purposely excluded, as this information is obviously confidential and often of a sensitive
nature. If however when you receive your statement if it is indicated that we do not hold a death grant nomination form for you, you
should complete one and send it to the Pension Section without delay. This simple form (if we hold a completed
one) can make a huge difference in ensuring that your death benefit is paid quickly after death and more importantly that it goes to whom you want it to go to.
You can obtain a form here
If you work full time, look out for your Statement later this year.
Back to top of page
Changes to the Local Government Pension Scheme [LGPS]
Regulations have recently been made
which are operative from 1 April 2004 and make the following changes to
the Local Government Pension Scheme (LGPS):
Refunds of Contributions
A refund of contributions will now only be payable to members of the LGPS who leave the Scheme with less than 3 months membership,
except where a transfer of previous pension rights has been received.
Members who leave the LGPS with 3 months or more membership, or where a transfer of previous pension rights has been received, will
now be entitled to preserved pension rights.
Prior to the 1 April 2004 refunds were only payable to members who left the LGPS with less than
2 years membership, except where a transfer of previous pension rights had been received. Therefore, members who have joined the LGPS
since the 1 April 2002 and leave after the 1 April 2004 with more than 3 months but less than 2 years
membership and would have been entitled to claim a refund, will still be able to opt for a refund in lieu of the preserved pension rights.
As a result of this change, members may become entitled to the payment of LGPS ill-health retirement benefits where their total membership
period is three months, or more.
Annual Benefit Statements
The LGPS now requires all local government pension funds to provide Annual Benefit Statements to all active, deferred and pension credit
members. The statement must include details of the LGPS benefits that the member has accrued and, in the case
of an active member, an indication of the benefits that they could accrue if they
continue to be an active member of the Scheme until their normal retirement date.
The indication of what the member may become entitled to will be based on the assumption that they continue to be an active member and
that the statutory provisions of the LGPS remain unchanged.
The first annual benefit statement must be provided within 12 months of the 1 April 2004 and further statements must be issued once in each
subsequent 12-month period.
Internal Dispute Resolution Procedure [IDRP]
The Internal Dispute Resolution Procedure will be amended from 1 June 2004 to make local authority employers responsible for dealing directly with disputes, in the first instance, to filter out easily resolved complaints and misunderstandings and to leave the second stage of the process for more difficult and contentious cases. Responsibility for stage 2 of the process will now be at administering authority level.
Ill-health Retirements
The Regulations now provide that where a member is awarded ill-health benefits for a 2nd or further time those benefits will not be subject to enhancement. The definition of "permanently incapable" has also been amended to make it clear that the assessment of whether an individual is entitled to the payment of LGPS benefits on ill-health grounds has to be made on the balance of probabilities.
Re-employed Pensioners
This amendment withdraws the facility for a re-employed pension member to elect for a single retirement pension arising from his/her second retirement.
Where a current active member is a re-employed pensioner member and would therefore have been able to elect for a single pension upon becoming entitled to LGPS benefits arising from his current period of employment these rights may be protected. If the member wishes to take up this protection he must make a
written election to the Avon Pension Fund, by 30 September 2004. The protection is subject to a continuous period of
employment (unless the member is the subject of a transfer, i.e. a change of employment that is beyond their control) until eligible to make an election to elect for a single pension i.e. when the member becomes entitled to the payment of his/her
further LGPS pension. Please contact the Avon Pension Fund if you think that you may be affected by this change.
Combining two periods of LGPS membership
An election to join up two periods of LGPS membership must now be made within 12 months of the date of joining the LGPS again, or such further period as the new employer may allow. An active member of the Scheme on the 1 April 2004 and with a previous period preserved separately, has until 31 March 2005 to make such an election to link this to current service, or such longer period as his/her employer will allow.
Before this change a member was able to decide to combine two periods of LGPS membership at any time. If you think that you have a period of LGPS membership, which you decided not to combine with your current period and that you may be affected by this change please
contact the Avon Pension Fund for further information.
Back to top of page
Employers Conference
The 2nd Avon Pension Fund Employers Conference took place on 20th November 2003 at Ashton Court Mansion, Bristol. A large majority of
the Scheme’s employers attended and were treated to presentations given by senior Pension Fund staff including Steve McMillan (Pensions
Manager), Tony Worth (Investments Officer) and Alan South (Technical and Compliance Officer). Additionally, Steve Jacquest from Mercer
Human Resource Consulting (Actuaries and advisor to the Fund) updated employers on the financial position of the Fund.
The Conference was well attended, and gave representatives of the employing bodies an opportunity both to discuss current issues with
Fund representatives and also share experiences with their colleagues.
The Conference also saw the release of Avon Pension Fund’s Annual Report for the year ended 31 March 2003,
you can read the report here.
Back to top of page
Actuarial Valuation - 31 March 2004
The Avon Pension Fund is subject to an actuarial valuation every 3 years. The last valuation took place on 31 March 2001 when the Fund’s
assets were judged sufficient to meet 99.4% of its liablities. The employer contribution rates currently in place are based on this valuation.
Since 31 March 2001 there have been substantial falls in the world’s major equity markets. For example, UK equities lost just under 35% of
their value in the following two years. The falls experienced by Europe (ex-UK) and Japan were even more severe. Although some of the lost
ground has been recovered in the current financial year, the overall effect is to leave the Avon Pension Fund well short of full funding as we
approach the 31 March 2004 valuation. Mercer Human Resource Consulting, the Fund’s actuary, estimates that the current funding level, i.e.
the proportion of the Fund’s liabilities which are covered by its assets, is thought to currently be between 80% and 85% overall, although this
may vary for each employer depending on its membership. This may, of course, change between now and the valuation date depending on
the way in which markets move.
All other local authority pension funds have suffered in a similar way. Indeed, a number of them were far from fully funded as at 31 March 2001
and will now have even larger deficits to recover.
Any funding deficit identified in the 31 March 2004 valuation will be taken into account in revised employer contribution rates operative from
1 April 2005. In effect, the deficit will be recovered over a period of years so that full funding is ultimately restored. (In the short term the
Fund’s assets are more than adequate to meet its outgoings). A deficit of between 15% and 20% would see employer contribution rates rise
significantly. However, because it is the employing bodies which are required to meet the deficit, there is no question of members scheme
benefits being reduced in any way.
Employing bodies in the Avon Pension Fund will have to fund higher employer contribution rates through either an increase in their funding
sources or cost savings.
In summary, Scheme members will find that with effect from 1 April 2005 the financial position of their
employers will be affected but not the pension benefits to which they are entitled.
Back to top of page
Part Time Worker’s Claims: Update
Following the decisions from the European Court and the House of Lords, the Employment Tribunal [E.T.] has issued guidance as to how
these cases are to be covered. As a result all employees who have made a claim through the E.T. should have received, from their employer,
a questionnaire to complete and return.
On return of this questionnaire, the employer must verify the information given and decide whether to accept the claim in full, in part, or to
contest the claim.
The employer will be notifying each claimant accordingly. However, the E.T. is still addressing some appeal cases which will cause further
delays.
The Part time cases that are in the process of being resolved relate to employees who have claimed with an E.T. For all staff who have not
made a claim, either a change to the Scheme regulations would be required or claims would be required through the Employment Tribunals.
The Office of the Deputy Prime Minister [ODPM] has yet to decide which method will be implemented.
If in the meantime any of these staff leave employment, it is advisable they make a claim within six months to an Employment Tribunal using
form IT1, which can be sent to you if required.
Some of the E.T. claims, and other enquiries, have been from employees who have not technically been denied entry to the Scheme, but
claim they were not notified by their employer of their right to join the Scheme or of any option to buy back previous part time service. These
need to be assessed by each employing authority, who must determine the validity of each case.
Back to top of page
Pension Clinics
As mentioned in the last two newsletters, 2003 saw another series of successful Pension Clinics throughout the old Avon area. We have
helped hundreds of you with your pension queries, the clinics have been a huge success and we’re looking to hold more again this year.
The clinics comprise of a series of individual, confidential sessions at which experienced Pensions staff will provide assistance and
(non-financial) advice to members on queries submitted in advance. Armed with laptops, our Pensions staff have remote electronic access to
members’ records, and also a calculation facility enabling them to resolve any subsequent queries.
We are always looking to improve the service we provide to our customers, so please remember to fill out a questionnaire when attending
the clinics to enable us to make improvements.
Your employer should contact you if a clinic is coming to you, so keep your eyes and ears open!
Please remember though that it is not essential to attend one of the clinics to obtain the information you need; you can
contact our office at any time.
Additionally, provided we are give sufficient notice, personal visits to our offices in Keynsham can be arranged.
Pension Scheme of the Year Awards 2003
The Avon Pension Fund is proud to have been shortlisted for two awards at the prestigious “Pension Scheme of the Year Awards 2003”: the
DB Communications Award and the Website Design Award (we were the only Local Government Scheme nominated in this category).
Editor of Professional Pensions, Len Roberts - who chaired the judging panel - said “the judges had been very impressed by the standard of
entries this year.”
He added: “Presenting awards for excellence in any area of business is never easy. But it is particularly difficult when it comes to UK
pension schemes where exceptional service is the norm. One constant in a fast changing environment is the service schemes provide to
their members.”
The awards ceremony took place at London’s Grosvenor House Hotel in September and werehosted by ITV’s Gabby Logan. Unfortunately,
the Fund didn’t win in either category this year, but being short-listed is a huge achievement in itself.
We will of course be applying for consideration in this years’ awards.
Death Grant Nomination Forms - A reminder
As an active member of the Avon Pension Fund you have automatic life cover. Should you die, the Fund pays a lump sum of twice your annual
pensionable salary.
By completing a Nomination Form, you can nominate whoever you like to receive the lump sum.
If your circumstances have changed since originally completing a form, you’ll need to fill in a replacement.
Back to top of page |
If the pdf version takes too long to download, the text version
contains identical information.