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Help with completion of the LGPS Leavers form

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Introduction

This guide has been designed to help you complete the leaver form and understand what information you need to state in each section.

If you wish to, you can download this guide.

You must use Employer Self Service (ESS) to notify us of any members leaving, opting-out and retiring from the Local Government Pension Scheme. As you have direct access, the leaver form is instantly attached to the member’s record and a task will be created for us to action. If the member has multiple posts, a separate form will be required for each post.

Please see the Employers Guide to ESS for guidance on how to submit the Leaver form

Member Details Section

  • The Employer Name, Title, Surname, Date of Birth, Partnership Status and NI Number will be pre-populated so please check the details are correct and then complete the remaining fields.

Employment Details

copy of the employment details section of the leaver form

  • The pay reference should be pre-populated along with the Post Title if held on our records. Please check they match the ending employment.
  • Complete either the Date of Leaving or Date Opted Out fields – For Flexible Retirement cases, please state the last day before the change in grade, change in hours or both as agreed with the employee.

Reasons for Leaving

  • Please tick the relevant box and answer the corresponding questions.

A quick guide to each type of retirement is listed below. Please refer to the Employer’s Guide to the LGPS for more detailed information on each type and strain costs.

Leaver under age 55 – the earliest a member can voluntarily access their benefits is age 55 so anyone who leaves before this age, will be entitled to either of refund of contributions if less than 2 years membership or a preserved benefit if more than 2 years membership.

Opted-Out – if a member opts out within 3 months of joining, their pension contributions must be refunded through their employer’s payroll. If a member opts out with more than 3 months’ but less than 2 years’ total membership, they are entitled to a refund of contributions less the tax adjustment. If they have more than 2 years total membership, they will be entitled to a preserved benefit.

  • In both cases, a copy of the opt out form, once processed, must be attached an additional page of the ESS Leaver Form.

Ill Health Retirement – a member can be retired on ill-health grounds, at any age, if they’re medically certified as being ‘permanently incapable of discharging efficiently the duties of his or her current employment’.

Regulations provides three levels of ill-health retirement benefits, depending on how likely it is that the member will be able to find work again before retirement age – Tier 1, Tier 2 and Tier 3. Ill health retirements do not incur a ‘strain cost’, as the cost is built into the employers’ contribution rate as part of the triennial valuation.

  • All in cases, copies of the ill health certificates IHCURR1 and IHCURR2 forms must be attached to an additional page of the ESS Leaver form.

Flexible Retirement – under the regulations, once an employee reaches age 55, they may remain in employment and draw their retirement benefits but the employer must agree to the release of the pension and the member must reduce either their hours, their grade or both.

An employer can waive any actuarial reduction (in full or part) but this would result in a ‘strain cost’. Flexible retirement is not a standard benefit but can be offered at the employer’s discretion, so you will need to include this in your discretions policy. We are unable to process flexible retirements where no policy exists.

  • Confirm the details of the reduction in hours, grade or both
  • You will need to confirm how you wish to pay the cost

Voluntary Retirement (Age 55+) – a member can resign from their employment and start drawing their pension benefits from age 55 but if the benefits are paid before their normal retirement age, an actuarial reduction will be applied. There would not be any strain cost payable unless you choose to waive the actuarial reduction.

If the member is aged between 55 and 60, they could have ’85-year rule protections’ – this rule was removed from the scheme, so the protections do not automatically apply between age 55 and 60. Benefits would be actuarially reduced but the employer does have the option of switching on the protection but this would incur a strain cost. Your decision on waiving reductions and switching on the ’85-year rule ‘must be stated in your pensions discretions policy.

  • Confirm if you are using any discretions
  • You will need to confirm how you wish to pay the cost.

copy of voluntary retirement section of form

Redundancy or Interest of Efficiency Retirement – if the member is aged 55 and over with at least 2 years membership, the regulations state that the member is entitled to and must take their pension benefits immediately without any actuarial reduction. Actuarial reductions do not apply, and the employer is required to pay the full ‘Strain’ cost to the Pension Fund.

  • You will need to confirm how you wish to pay the cost.

copy of redundancy reason for leaving section of leaver form

Section 1 - Pension Contributions

copy of pension contributions section of leaver form

  • choose Main or 50/50 Scheme (delete as appropriate)
  • confirm contribution rate at the date of leaving

Section 2 – Information required for a refund of contributions

copy of refund section of leaver form

This section needs to be completed for opt outs with more than 3 months membership and for all leavers with less than 2 years total membership

  • You will need to provide the last 3 years pension contributions – we ask for 3 years as the date of leaving may span 3 financial years ending on 31st. For example, membership is 01/03/2017 to 20/02/2019, we need contributions for 2016/17, 2017/18 and 2018/19.
  • The total actual pensionable pay must be provided and include Assumed Pensionable Pay where appropriate – please see the Employers Guide to the LGPS for more information on Assumed Pensionable Pay. The figures supplied will be accepted as final and will therefore overwrite pay previously provided via your monthly CARE data interface.

Section 3 – Hours as at Date of Leaving

copy of hours section of leaver form

This section should not be used to address previous hour changes – you will need to submit these via the monthly interface or directly through Employer Self Service (ESS).

  • Confirm the contract type and delete what is not appropriate
  • If part-time, term-time, variable or casual, please confirm the weekly hours and the full-time equivalent percentage of hours worked.
    • Weekly Hours should be stated as the actual weekly hours over the full-time equivalent hours. For example, 18.50/37.00 Then provide the proportion of full-time as a percentage (18.50 ÷ 37 x 100 = 50.00%)
    • If Term-time – there is a difference in the information required for the weekly hours and the percentage (see below). Weeks factor is only required for Devon Fund employees.
    • If Variable/Casual – confirm all the requested information and Pensions will work out the required hours from this information.

Term-time employee’s

Somerset Fund term-time employee’s – the pay is reduced according to the total number of weeks worked each year not the hours so just state the actual full-time equivalent percentage as per the example above.

Devon Fund term-time employee’s – the hours are adjusted not the pensionable pay so the term-time adjustment should be done to the hours – this can be done in 2 ways:

  1. Using a week’s factor: actual weekly hours ÷ 37.00 x 43.145 (wks. factor) ÷ 52.143 (FTE annual hours)

(18.50 ÷ 37.00 x 43.145 ÷ 52.143 x 100 = 41.3718%)

OR

  1. Using annual hours: actual weekly hours x weeks worked: 20 x 40 = 800 total actual hours per annum

total actual hours per annum ÷ full-time equivalent annual hours: 800 ÷ 1700 x 100 = 48.2353%**

** If you use SIMS Payroll software, the percentage you need is stated in the ‘Pay factor’ field

Section 4 – Award of Additional Pension

copy of award additional pension section of leaver form

This section is only to be completed if you are awarding the member any additional pension. The member must be entitled to immediate payment of benefits and your pension’s discretions policy must include this discretion.

  • You need to confirm either the amount of additional pension awarded, or the lump sum amount you wish to pay.

Section 5 – Pensionable Pay (Final Salary and CARE Pension Benefits)

copy of final salary section of leaver form

 

Final Salary Pensionable Pay

This section requires you to confirm the full-time equivalent pensionable pay for the pre 2014 benefits (Final Salary Pension)

Any pension built up to 31st March 2014 has the protection of a final salary link to the date of leaving. The final pay used to calculate this part of a member’s benefits will be the pensionable pay earned over the last 365 days of membership uprated to a full-time equivalent (FTE).

For example, if a member left on 22nd August 2019, the pensionable pay will need to be provided for the period 23rd August 2018 to 22nd August 2019.

Non-contractual overtime must not be included in these figures as it’s not deemed pensionable under the 2008 definition of pensionable pay

The total pensionable pay for the final 365 days of membership must be provided along with the best of the previous two years if higher – this is a standard pay protection provided by the regulations. For example, the date of leaving is 25/03/2015. Figures to be provided for the periods 26/03/2014 to 25/03/2015, 26/03/2013 to 25/03/2014 and 26/03/2012 to 25/03/2013.

  • complete the dates for the pensionable pay figures – if there has been a change in hours or pay during the period stated, please spilt the figures at the date of change
  • confirm the percentage of hours applicable to the period stated
  • select Final, Best or Pens Allow and delete as appropriate – if a previous years pay is more beneficial, select ‘Best’ and choose ‘Pens Allow’ to add any additional pensionable payments.
  • confirm the actual pensionable pay for the period.
  • confirm the full-time equivalent pensionable pay for the period

How to calculate the full-time equivalent pay for period stated

Take the actual pay for the period and uprate to a full-time equivalent using the percentage of hours worked per week: £9,000 ÷ 50% = £18000.00

Important:

  • If the hours or pay changed during the period stated, the figures will need to be split at the date of change
  • Non-contractual overtime must not be included in the figures as it’s not deemed pensionable under the 2008 definition of pensionable pay

Term-time employee’s

For Devon Fund term-time employees – employees have their hours adjusted NOT their pensionable pay, so you need to use the adjusted hours when uprating the actual pay to a full-time equivalent.

For Somerset Fund term-time employees – employees have their pay reduced according to the total number of weeks worked each year, so you need to provide the adjusted actual pensionable pay, (plus any additional pensionable recurring pay), and then uprate to the full-time equivalent pay using the part-time hours.

For example:

£8.83 (hourly rate) x 18 (hours per week) x 43.1281 (weeks factor) = £6854.78 (adjusted actual pay)

Then uprate to a full-time equivalent:

£6854.78 x 37 (full-time equivalent hours per week) ÷ 18 (hours per week) = £14090.38 = full-time equivalent adjusted pay)

Reduction or restriction in pay

If the member has suffered a drop in their permanent pensionable pay since 1st April 2008 and this falls within the 10 years before they leave, they can choose to use the best 3-year average pensionable pay in the last 13 years (ending on 31st March) in the calculation of their benefits.

Members must elect to apply this protection in writing to Peninsula Pensions at least a month before they leave. We will ask you to complete a separate Previous Years Pensionable Pay Request form if this applies.

Actual Pensionable Pay for CARE Pension

copy of CARE pensionable pay section of leaver form

CARE stands for Career Average Revalued Earnings which is simply a member’s actual pensionable pay for the period – there is no longer a need to uprate the figures provided to a full-time equivalent.

Non-contractual overtime and additional hours are deemed as pensionable under the 2014 LGPS scheme so can be included in the figures.

The total actual pensionable pay must be stated and include Assumed Pensionable Pay where appropriate – please see the Employers Guide to the LGPS for more information on Assumed Pensionable Pay. The figures supplied will be accepted as final and will therefore overwrite pay previously provided via your monthly CARE data interface.

  • Confirm the dates for the pensionable pay
  • Choose Main or 50/50 – delete as appropriate
  • If the member is taking Ill-Health Retirement on Tier 1 or Tier 2 or they have died in service, you must provide the Assumed Pensionable Pay to calculate the enhanced benefit.

The APP figure is calculated in the normal way but using the average of the pensionable pay for the 12 (weekly) or 3 (monthly) complete pay periods prior to the date of retirement or death. Please see the Employers Guide to the LGPS for more information on Assumed Pensionable Pay

  • If the member is age 65 or over at the date of leaving, you must provide the final 365 days pensionable pay to their 65th This figure will be used for our underpin calculations.

The LGPS guarantees to pay the higher of either the equivalent 2014 CARE Scheme   benefits or the final salary 2008 Scheme benefits, had the scheme not changed on 1st April 2014. This is called the ‘Underpin’ and applies to anyone ten years or less from retirement age on 1 April 2012.

Employers Authorisation

Copy of employers authorisation section of leavers form

The form needs to be signed off by an authorised contact or authorised delegated contact.

Please keep us updated with any changes to staff responsible for completing our forms (authorised signatories). This can be done by completing the employer contact details form.

Help section

If you need help with any aspect of Employer Self Service (ESS) or completing the Leaver form, please contact the Employer & Communications Team direct via email: peninsulaemployers@devon.gov.uk

You can also contact our Employer Liaison Officer, Mark Griffin, to arrange training for you and your colleagues if required. Contact Mark direct on mark.griffin@devon.gov.uk or 01392 385372

 

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