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Why are there any discretions in a statutory scheme?

The Local Government Pension Scheme (LGPS) is, of course, a statutory pension scheme, that is to say, that its rules are laid down under Act of Parliament.

However, scheme regulations do allow an employer certain discretions to enhance members’ benefits.

Scheme employers participating in the LGPS in England or Wales have to formulate, publish and keep under review a ‘statement of policy’ on certain discretions which they have the power to exercise in relation to members of the LGPS.

There are many discretions in the current regulations, together with several more extant from the previous regulations. The LGPS website provides the full list of discretions along with guidance for scheme employers.

However, there are only a handful of discretions where the employer is required to have a written policy statement as if any of the discretions are exercised, there would be a cost to the employer for either allowing early access to benefits or effectively enhancing the benefits the member receives.

All new employers must formulate, publish and send their discretions policies to Peninsula Pensions within three months of becoming a new employer under the LGPS.

Your policy should be reviewed annually to ensure that the decisions are still relevant to you as an employer and your scheme members. 

Example template of an employer discretions policy.

If you decide to amend the policy, you must publish the revised policy and send a copy to us within one month of making the changes. Please note that it has to be published for one month before you can exercise any new decisions.

If you have any questions or need any help with your policy, please contact our Employer Liaison Officer, Mark Griffin. Email mark.griffin@devon.gov.uk.

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