Employers’ Guide

Employer Discretions

Why are there any discretions in a Statutory Scheme?

The Local Government Pension Scheme 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 – please see the link below to the LGPS website for the full list. 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.

 

We have designed some guidance to help you make the decisions you need:

Example pensions discretions policy

Guidance notes on employer discretions policy

Full List of Employer Discretions

LGPS Employer Discretions Technical Guide

All new employers must formulate, publish and send your discretions policies to Peninsula Pensions within 3 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. If you decide to amend the policy, you must publish the revised policy and send a copy to us within 1 month of making the changes. Please note that it has to be published for 1 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