The Local Government Pension Scheme (Scotland) Regulations 2018

Made: 1st May 2018

Laid before the Scottish Parliament: 2nd May 2018

Coming into force in accordance with regulation 1

The Scottish Ministers make the following Regulations in exercise of the powers conferred by sections 1, 2 and 3 and schedule 2, paragraph 3(b) of the Public Services Pensions Act 2013 and all other powers enabling them to do so.

In accordance with section 21(1) of that Act, the Scottish Ministers consulted such persons or the representatives of such persons as appeared to the Scottish Ministers likely to be affected by these Regulations.

PART 1 — Membership, contributions and benefits

Preliminary Provisions

Citation, commencement and effect

1

• (1) These Regulations may be cited as the Local Government Pension Scheme (Scotland) Regulations 2018, and come into force on 1st June 2018.

• (2) Regulations 18(7), 26(8), 29(11), 29(13), 30(2), 40(13), 58(2), the definitions of “Club Memorandum”, “Club Transfer” and “revaluation adjustment” in schedule 1 and paragraph 6 of schedule 5 have effect from 1st April 2015.

• (3) Regulation 54(2) has effect from 5th April 2016.

• (4) Regulation 56(2) and (4) has effect from 31st March 2016.

Introductory

2

• (1) These Regulations consolidate with certain amendments the provisions of the Local Government Pension Scheme (Scotland) Regulations 2014, which established a scheme for the payment of pensions and other benefits to or in respect of persons employed by Scheme employers, and constitute “the Scheme”.

• (2) The Scheme manager responsible for the local administration of pensions and other benefits payable under these Regulations is referred to in these Regulations as the “administering authority”.

• (3) The Scottish Ministers may, after consultation with the Scheme actuary, issue actuarial guidance to administering authorities.

• (4) Schedule 1 (interpretation) contains definitions of expressions used in these Regulations which apply for their interpretation unless the context indicates that they have a different meaning.

Membership

Active membership

3

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• (1) Subject to regulation 4 (restriction on eligibility for active membership), a person is eligible to be an active member of the Scheme in an employment�??

• (a) if employed by a body listed in Part 1 of schedule 2;

• (b) if employed by an admission body and designated, or belonging to a class of employees that is designated, by the admission body under the terms of an admission agreement as being eligible for active membership of the Scheme.

• (2) Subject to paragraph (3), a person eligible to be an active member of the Scheme in an employment becomes an active member on the day that person's employment begins or (if later) the day the person becomes eligible for membership.

• (3) A person who would, apart from this paragraph, be an active member of the Scheme by virtue of paragraph (2) who is employed under a contract of employment of less than 3 months does not become a member on the day specified in paragraph (2) but becomes an active member on�??

• (a) the person's automatic enrolment date;

• (b) the first day of the payment period following an application to become an active member; or

• (c) the first day of the payment period following an extension to the contract of employment to be for 3 months or more,

whichever is the earliest.

• (4) Where an administering authority enters into an admission agreement with an admission body�??

• (a) the admission agreement must comply with the requirements specified in paragraphs 3 to 12 of Part 2 of schedule 2; and

• (b) these Regulations apply to the admission body and to employment with the admission body in the same way as if the admission body were a Scheme employer listed in Part 1 of schedule 2.

• (5) A person who is eligible to be an active member in an employment, but who is not an active member in that employment becomes an active member in an employment�??

• (a) on the first day of the payment period following the application to become an active member in that employment; or

• (b) on the automatic enrolment date or automatic re-enrolment date relating to that employment.

• (6) Subject to paragraph (7) and regulation 5(6) (person whose membership is less than 3 months treated as never having been a member), an active member has qualifying service for a period of 2 years if�??

• (a) that member has spent 2 years as an active member;

• (b) a transfer value payment has been received in respect of rights accrued in a registered pension scheme or under a European pensions institution and the length of service in respect of which that person accrued benefits in that scheme or institution was 2 or more years;

• (c) the aggregate of the period the person has spent as an active member of the Scheme and of a registered pension scheme or European pensions institution in respect of which a transfer value payment has been received, is 2 years;

• (d) a transfer value payment has been received in respect of rights accrued in a scheme or arrangement that does not permit a refund of contributions to the member;

• (e) the member has paid contracted-out National Insurance contributions whilst an active member and ceases active membership after the end of the tax year preceding that in which the member attains pensionable age;

• (f) the member already holds a deferred benefit or is in receipt of a pension (other than a survivor's pension or pension credit member's pension) under these Regulations;

• (g) a transfer value payment has been paid to a qualifying recognised overseas pension scheme;

• (h) the member ceases active membership at age 75; or

• (i) the member dies in service.

• (7) The following periods do not count as periods of qualifying service for the purposes of these Regulations�??

• (a) any period for which contributions have been returned to the member;

• (b) any period of membership derived from a non-contributory pension scheme or arrangement from which a transfer value payment has been received and which is attached to the membership in respect of which contributions have been returned under regulation 18 (rights to return of contributions);

• (c) any period in respect of which rights have been transferred to another registered pension scheme other than a qualifying recognised overseas pension scheme;

• (d) any period in respect of which the member has been deprived of benefits under regulation 86 (forfeiture of pension rights after conviction for employment-related offences).

Restriction on eligibility for active membership

4

• (1) Subject to paragraph (4), if a person's employment entitles the person to belong to another public service pension scheme, or would so entitle them were it not for their age, that employment does not entitle the person to be an active member of the Scheme, unless that other scheme was made under section 7 of the Superannuation Act 1972 .

• (2) A person who is an employee of an admission body may not be an active member of the Scheme if the person is a member of another occupational pension scheme in relation to the employment in respect of which that person would otherwise be eligible to be a member of the Scheme under regulation 3.

• (3) A person may not become or remain an active member on or after the person's 75th birthday.

• (4) A person may be a member of the Scheme despite being entitled to be a member of the National Health Service Pension Scheme for Scotland (“the NHS Scheme”) if—

• (a) that person's entitlement to be a member of the NHS Scheme is by reason of the person's employment by an NHS Scheme employing authority as a result of a prescribed arrangement under section 15 of the Community Care and Health (Scotland) Act 2002 (delegation etc. between local authorities and NHS bodies );

• (b) the person is specified in, or within a class of employees specified in, an admission agreement made between an administering authority and an NHS Scheme employing authority; and

• (c) the person was an active member of the scheme immediately before that person's employment by the NHS Scheme employing authority.

Ending active membership

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• (1) A person stops being a member in an employment if the person stops being eligible for membership in that employment.

• (2) A person who wishes to leave the Scheme must notify his or her employer in writing.

• (3) A person with more than one employment may leave the Scheme if the person wishes in respect of one, some or all of the employments.

• (4) A member who gives notice under paragraph (2) stops being a member in the specified employment from the date the notification specifies.

• (5) But, if a date earlier than the notification or no date is specified, the member stops being a member at the end of the payment period during which the notification is given.

• (6) Where notice is given by a person before that person has been a member for 3 months, that person must be treated as not having been a member in that period.

Deferred members

6

• (1) A person is a deferred member of the Scheme in relation to an employment if the person—

• (a) has qualifying service for a period of at least 2 years;

• (b) is no longer an active member in relation to that employment;

• (c) has not started to receive any pension under the Scheme in relation to that employment; and

• (d) has not reached the age of 75.

• (2) A person may be a deferred member of the Scheme in relation to one period of membership notwithstanding the fact that the same person is a member in the same or a different category in relation to a different period of membership.

Pensioner members

7

• (1) A person is a pensioner member of the Scheme if that person was—

• (a) an active member;

• (b) a pension credit member; or

• (c) a deferred member; and,

is in receipt of a benefit from the Scheme relating to that membership.

• (2) A person may be a pensioner member in relation to one period of membership notwithstanding the fact that the same person is a member in the same or a different category in relation to a different period of membership.

Pension credit and survivor members

8

• (1) A person is a pension credit member of the Scheme if that person has been given a pension credit in the Scheme as a consequence of a pension debit created under section 29 of the Welfare Reform and Pensions Act 1999 in relation to a member of the Scheme.

• (2) A person is a survivor member of the Scheme if that person is entitled to a benefit under regulations 39, 40, 42, 43, 45 or 46 (survivor pensions).

Contributions

Contributions

9

• (1) Subject to paragraph (6) and regulation 10 (temporary reduction in contributions), each active member shall make contributions to the Scheme at the contribution rate from that member's pensionable pay in each employment in which the member is an active member.

• (2) Subject to paragraph (4), the annual contribution rate to be applied to a person who becomes an active member is determined by the person's Scheme employer at the commencement of the person's membership and at the commencement of each scheme year on the basis of the person's pensionable pay—

• (a) in accordance with the following table; and

• (b) having regard to guidance issued by Scottish Ministers.

Band	Range	Contribution Rate
1	On earnings up to and including £20,300	5.5%
2	On earnings above £20,300 and up to £24,800	7.25%
3	On earnings above £24,800 and up to £34,000	8.5%
4	On earnings above £34,000 and up to £45,300	9.5%
5	On earnings above £45,300	12%

• (3) The figures in the second column of the table in paragraph (2) (“Range”) are—

• (a) to be increased each year by any increase applied to pensions under the Pensions (Increase) Act 1971 and rounded down to the nearest £100; and

• (b) to be treated for the purposes of paragraph (3)(a) as if they were pensions beginning on 1st April 2014.

• (4) Where there has been a permanent material change to the terms and conditions of a member's employment which affects the member's pensionable pay in the course of a financial year, the member's Scheme employer must determine that the contribution rate to be applied in that case is to be recalculated in accordance with paragraph (2) and in such a case, the Scheme employer shall inform the member of the contribution rate applicable to the member, and the date from which it is to be applied.

• (5) The amount of an employee's pensionable pay for the purposes of this regulation is calculated in accordance with regulation 20 (meaning of “pensionable pay”).

• (6) An active member does not make contributions on or after the day prior to the member's 75th birthday.

• (7) A person who is an active member in more than one employment must make contributions for each of those employments at the rate applicable to the person's pensionable pay in each such employment.

• (8) The active member's Scheme employer may decide the intervals at which the contributions are made.

• (9) For the purposes of this regulation any reduction in pensionable pay which arises as a consequence of any of the following circumstances is to be disregarded—

• (a) the actual or assumed enjoyment by the member of any statutory entitlement during any period away from work;

• (b) child-related leave;

• (c) leave of absence with permission;

• (d) sick leave;

• (e) leave due to injury;

• (f) reserve forces service leave;

• (g) absence due to trade dispute.

Temporary reduction in contributions

10

• (1) A person may elect to pay reduced contributions in an employment for a period by giving written notice to the member's Scheme employer that the member wishes to do so, and the Scheme employer must notify the fund of the election.

• (2) Where a notice is given under paragraph (1), from the next payment period following the giving of the notice, the contribution rate payable on the member's pensionable pay in relation to that employment is 50% of that which would otherwise be payable under regulation 9 (contributions).

• (3) An active member may cancel the election under paragraph (1) at any time by giving written notice to the member's Scheme employer to this effect, and the Scheme employer must notify the fund of the election.

• (4) Where a notice is given under paragraph (3), from the next payment period following the giving of the notice, the contribution rate payable on the member's pensionable pay in relation to that employment is as provided by regulation 9.

• (5) An active member's election under paragraph (1) is cancelled from the beginning of the first pay period after—

• (a) the automatic re-enrolment date; or

• (b) going on to no pay as a result of long-term sickness or injury provided that the member is still on no pay at the beginning of that pay period; or

• (c) going on to no pay during ordinary maternity, paternity , parental bereavement or adoption leave,

and the contribution rate payable on the member's pensionable pay in relation to that employment is as provided by regulation 9 from that date.

• (6) An active member may make a further election under paragraph (1) at any time when the member is liable to make contributions as is provided by regulation 9.

• (7) The Scheme employer of any member who elects to pay reduced contributions under paragraph (1) shall give the member information about the effect on that member's likely benefits consequent to that election.

Contributions during absence from work

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• (1) An active member must pay contributions under regulation 9 (contributions) or 10 (temporary reduction in contributions) during an absence from work on child-related leave in accordance with regulation 12 (contributions during child-related leave).

• (2) An active member must pay contributions under regulation 9 or 10 during an absence on reserve forces service leave in accordance with regulation 13 (contributions during reserve forces service leave).

• (3) An active member must pay contributions under regulation 9 or 10 during an absence from work because of illness or injury in accordance with regulation 14 (contributions during absence for illness etc.).

• (4) A person remains an active member during any absence from work—

• (a) of a description mentioned in paragraphs (1) to (3);

• (b) due to a trade dispute; or

• (c) with permission from the member's Scheme employer.

• (5) An active member, who is absent from work with permission from the member’s Scheme employer (otherwise than by reason of illness or injury) for a continuous period of less than 31 days and is receiving reduced or no pay, must pay contributions on the pensionable pay the member would have received during that period but for the absence.

Contributions during child-related leave

12

• (1) An active member on child-related leave must pay contributions in accordance with regulation 9 or 10 on any pensionable pay received, including statutory pay but that pay does not include any amount that reduces the member's actual pensionable pay on account of possible entitlement to statutory pay.

• (2) If an active member is on ordinary maternity leave, paternity leave , parental bereavement leave or ordinary adoption leave and is not entitled to receive pensionable pay (including statutory pay) for any of that period, that member is treated for the purposes of these Regulations as if that member had paid contributions for that unpaid period under paragraph (1).

Contributions during reserve forces service leave

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• (1) An active member on reserve forces service leave must pay contributions in accordance with regulations 9 or 10.