Administration Guide for Employers - v11 November 2018 - Cornwall Council
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Administration
Guide for
Employers
v11 November
Page 1 of 27
2018
Contents
Employer responsibilities…………………………………………………………….. Page 3
New Employees……………………………………………………………………………. Page 4
Ongoing Information……………………………………………………………………. Page 5
The 50/50 Section……………………………………………………………………….. Page 6
Purchasing lost pension in respect of authorised unpaid leave…. Page 7
Assumed Pensionable Pay (APP)…………………………………………………. Page 8
Leavers…………………………………………………………………………………………. Page 9
Additional Voluntary Contributions (AVCs)…………………………………. Page 10
Payment of Monthly Contributions……………………………………………… Page 10
Provision of Annual Information…………………………………………………. Page 11
Employer Discretions………………………………………………………………….. Page 11
Ill Health Retirement…………………………………………………………………… Page 12
Employer and Fund actions………………………………………………………… Page 13
Contacts………………………………………………………………………………………. Page 15
Appendix 1 – New Entrant Form…………………………………………………. Page 16
Appendix 2 – Employee Amendment Form………………………………. Page 17
Appendix 3 – Member Leaving Pensionable Service Form………… Page 18 – 19
Appendix 4 – Final Pay Examples………………………………………………. Page 20 – 22
Appendix 5 – Election Form………………………………………………………… Page 23
Appendix 6 – Opt-out Notice………………………………………………………. Page 24
Appendix 7 – 50/50 Election Form……………………………………………… Page 25
Appendix 8 – Main Section Election Form………………………………….. Page 26
Appendix 9 – Monthly Contribution Schedule……………………………. Page 27
Page 2 of 27
Employer responsibilities
For all Cornwall Council payroll operated and HR supported employers
some of the following responsibilities have been delegated to them
however, the responsibility still rests with you as the employer and you
may want to check to ensure that these are being actioned accordingly.
Make an assessment and decision, at least once a year, on the rate of
contributions a member will make on pay for each job and notify the
member of their contribution rate
Notify members where their assessed contribution rate has changed
For multiple employments, ensures contributions are made and
recorded correctly for each job i.e. each job treated separately
Supply the necessary information at the appropriate time to the Fund
in order that it can fulfil its regulatory obligations
Notify the Fund of new entrants to the LGPS (see page 4)
Notify the Fund of any changes for the member i.e. change of name,
address, marital/civil partnership status, working hours, periods of
unpaid leave and date of death (see page 5)
Notify the Fund of leavers from the LGPS (see page 9)
Notify the Fund of any changes / mergers to the organisation that will
impact on their participation in the Fund including change of name,
constitution, mergers with other organisations or another decision
which will or may materially affect the employer's Fund membership
Notify the Fund of any TUPE transfers
Notify the Fund of any awards of new contracts for out-sourced
services, even where the employer does not directly employ the staff
involved
Ensure assumed pensionable pay (APP) is applied to a member where
appropriate and recorded for year end returns (see page 8)
Contact members within 30 days of returning from unpaid leave, to
offer them the opportunity to buy back their lost pension via an
additional pension contribution (APC) (see page 7)
Decide the appropriate “tier” for ill health retirements and notify the
fund accordingly (see page 12)
Make a decision on the LGPS employer discretions for your
organisation, supply the fund with a copy of the policy statement and
publish these for your current and former members to view
Fulfil the employer role within the internal dispute resolution process
Pay over contributions to the Fund within the statutory time period
Provide accurate and complete end of year returns to the Fund
These responsibilities should be taken within prescribed timescales, which
may originate from the LGPS Regulations; overriding legislation.
Page 3 of 27
New Employees
Where a new employee is enrolled into the fund, a New Entrant Form
(Appendix 1) must be completed and forwarded to the Cornwall Pension
Fund.
The “Cornwall Pension Fund – A guide to the local government
pension scheme” booklet must be issued to the new employee by the
appointed representative along with an Election Form (Appendix 5). The
employee should be asked to complete and return the Election Form.
Please contact the Cornwall Pension Fund for hard copies of the Cornwall
Pension Fund scheme booklet.
If the employee elects to remain a member of the fund, please forward
the Election Form to the Fund, together with a completed New Entrant
Form, if this has not already been completed.
If the employee elects not to be a member of the fund then an Opt Out
Notice (Appendix 6) must be completed. An Opt Out Notice can be
obtained from our website www.cornwallpensionfund.org.uk or direct form
the Cornwall Pension Fund. If the opt out is within 3 months of joining,
any pension contributions that have been deducted must be refunded
through the payroll. A copy of the Opt Out Notice must be forwarded to
the Fund, together with confirmation that the refund has been processed,
where applicable.
If an employee opts out of the Fund, but has been a member for more
than 3 months then please follow the normal leaver process as detailed
later on in this guide, but include a copy of the Opt Out Notice.
Please note that it is the Employers responsibility to attribute the
employee to the correct tiered pension contribution band, which is
determined by reference to their actual pensionable pay.
Our website www.cornwallpensionfund.org.uk contains details on the
employee contribution bands.
Page 4 of 27
Ongoing Information
It is essential that the Fund is kept informed of changes for your
employees, to ensure that we are able to accurately maintain their
pension records and therefore their benefit entitlements.
All material changes in contractual hoursand working weeks, i.e.
whole-time to part-time or an increase or decrease in part-time
hours, including dates of material change and number of hours
contracted to work
Any reduction in salary grades
Change of address
Periods of long term uncertified sickness
Change of employee normal contribution rate i.e. 50/50 section
Change of name:
o Copies of the appropriate certificates should also be
forwarded to the Fund i.e. marriage certificate
o Decree absolute
Breaks in pensionable service including unpaid leave. Please see the
section regarding purchasing lost pension in respect of authorised
unpaid leave
Any TUPE transfers
Please complete the Employee Amendment Form (Appendix 2) and
forward to the Cornwall Pension Fund.
Page 5 of 27
The 50/50 Section
Since April 2014, members have been able to move to a '50/50' section of
the Local Government Pension Scheme (LGPS) in which they pay half their
normal contributions and get half their normal pension benefits.
Once Employees have become members of the LGPS they can opt to
move into the 50/50 section of the scheme using the 50:50 Election
Form (Appendix 7). Employees should return their completed forms to
their employer and a copy should be passed to the Fund. You will then
need to deduct contributions from the employee at half their normal
contribution rate.
During such periods, employers continue to pay their contributions
at their full contribution rate.
Employers will need to put any 50/50 section members back in to the
main section of the Scheme and begin deducting contributions at the full
rate when the employer meets its automatic re-enrolment date, or from
the beginning of the pay period after the member goes onto no pay due to
sickness or injury if they are still on nil pay at that time.
Employees can elect to move back in to the main section at any time
using the Main Section Election Form (Appendix 8).
Page 6 of 27
Employer
Purchasing lost pension in respect
Discretion
of authorised unpaid leave Required
See page 11
for details
Members can buy additional pension through Additional Pension
Contribution (APCs) and these are also the method through which
members can buy back pension which has been 'lost' when a member has
a period of:
authorised unpaid leave of absence,
unpaid additional maternity, paternity or adoption leave, or
absence due to a trade dispute
In maternity leave cases contributions must be deducted from all
maternity pay entitlement.
In some circumstances, a member's employer is obliged to contribute
2/3rds of the cost of the APC contract when a member confirms, within 30
days of returning to work, that they wish to purchase this lost pension.
These contracts are known as Shared Cost APCs (SCAPCs), and the
types of leave which are eligible for SCAPCs are as follows:
authorised unpaid leave of absence, or
unpaid additional maternity, paternity or adoption leave
To buy back lost pension, members will need to know the total pay lost
during their absence. Members may therefore get in touch with you to ask
for that figure and you will need to provide this promptly so that, where a
member is eligible for a SCAPC, they are able to make the formal
application within 30 days of returning to work. Alternatively, you may
consider providing lost pay figures automatically to members on their
return to work as part of an existing process.
Where absence is due to a trade dispute, employees must pay the full cost
of purchasing lost pension.
Members can get a quote for an APC contract from www.lgpsmember.org
Please supply the Fund a copy of any APC contract agreed.
Where a member has a period of unauthorised unpaid leave of absence
there is no facility for that member to buy back their lost pension via an
APC contract.
If a member elects not to pay pension contributions for their period of
unpaid leave, this period counts as a break in pensionable service and the
Fund need to be notified using the Employee Amendment Form.
Page 7 of 27Assumed Pensionable Pay (APP)
Assumed Pensionable Pay (APP) is a term introduced into the LGPS from
April 2014.
APP is the pensionable pay that has to be calculated and added to a
member's cumulative pensionable pay during certain types of leave of
absence i.e. when a member:
is on reduced contractual pay or no pay due to sickness or
injury;
is on ordinary maternity, paternity or adoption leave or paid
additional maternity, paternity or adoption leave; or
is absent on reserve forces service leave
APP must be applied correctly to ensure that scheme members have the
correct benefit accrual.
APP is calculated as an annual rate then applied to the relevant period as
a proportion of that rate.
The annual rate of APP for a monthly paid member is an average of the
pensionable pay received over the three months prior to the relevant
event (see above) grossed up to an annual rate.
In calculating APP you should remove any pensionable lump sum
payments that a member may have received in the APP calculation period.
Page 8 of 27Employer
Leavers Discretion
Required
See page 11
for details
For all members who leave pensionable membership, you must fully
complete the Member Leaving Pensionable Service Form (Appendix
3).
The following basis of leaving pensionable membership will apply:
Normal/ Early/ Flexible Retirement
o Please include parts 2 and 3 of the employee’s P45
Ill Health Retirement
o Please include the appropriate ill health certificate completed
by the occupational health physician certifying the
employee’s eligibility for ill health retirement and your
confirmation of the tier of ill health retirement that you have
awarded to the employee. Please also provide parts 2 and 3
of the employee’s P45
Death in Service
o Please arrange for a copy of the death certificate to be
forward together with contact details of the next of kin
Redundancy / Efficiency of the Service
o Please include a copy of any relevant approvals together with
the termination letter issued to the employee
Employee leaving service or opting out with more than 3
months membership or any other reason not outlined above.
It would be helpful if employers could provide us with advance notice of
any retirement, as this enables us to inform employees of their benefit
options prior to their actual leaving date and therefore arrange payment
of their pension and lump sum more quickly.
Please note that it is the Employers responsibility to advise the
Cornwall Pension Fund of the correct Final Pensionable Pay and
CARE Pensionable Pay for any period after 1st April 2014 to the
date of leaving, in accordance with the relevant Local Government
Pension Scheme regulations. Examples of final pay calculations can be
found at Appendix 4. CARE Pensionable Pay is a member’s pensionable
pay based on the LGPS 2014 definition, inclusive of non-contractual
overtime.
Page 9 of 27Employer
Additional Voluntary Contributions
Discretion
(AVCs) Required
See page 11
for details
For all Cornwall Council payroll operated employers this is supported by
Cornwall Council Payroll.
Members have the option of paying AVCs to the Standard Life Assurance
Company. Leaflets describing the investment options are available on our
website www.cornwallpensionfund.org.uk or from the Fund.
Following receipt of the application form and appropriate deduction made
from the member’s earnings, the ORIGINAL application form should be
forwarded to Fund. Kindly note, you must ensure that the AVC
payment requested by the member does not exceed Her Majesty’s
Revenue & Customs (HMRC) limits and complies with the LGPS
regulations. Further information is available from the Cornwall Pension
Fund.
It is the employers responsibility to ensure that details of the individual
employee contributions are uploaded via the Standard Life website and
details of how to set up employer access is available from the Fund.
Payment must be sent direct to Standard Life as soon as possible
following deduction from the employees’ earnings.
Payment of Monthly Contributions
Details and payment of employee and employer contributions must be
forwarded to the Cornwall Pension Fund on a monthly basis. A draft
Monthly Contribution Schedule (Appendix 9) is attached if required, which
has been amended to include the split of contributions between the main
and 50/50 sections of the scheme.
Your Contribution Schedule should not include details of your employees
paying AVC’s.
It is a statutory requirement that both the payment and schedule
must be received by the 19th of the month (if paying by cheque) or
22nd of the month for electronic payment following deduction from
earnings.
Page 10 of 27Provision of Annual Information
For all Cornwall Council payroll operated employers this is supported by
Cornwall Council Payroll.
Details of pension contributions and pensionable pay for every member for
each Scheme year i.e. 1st April to 31st March must be forwarded to the
Cornwall Pension Fund.
The Cornwall Pension Fund will send you an excel spreadsheet, around
March each year, for you to complete and return that will contain the
information required to update each of your employee’s pension
membership records.
It is a statutory requirement that this Annual Information is
forwarded to the Fund by the 6th July following the year end.
Employer Discretions
Employers and the Fund have certain powers which enable them to
choose how they will apply specific scheme benefits. These are called
discretions.
As an employer you are obliged to consider how to exercise your
discretion and must have a written policy on how these will apply using
your discretion. For example you must have a written policy on whether
you will:
allow flexible retirement
award, or pay towards the cost of, additional pension
waive any reduction to a members pension if it is paid early (except
for ill health, redundancy & business efficiency retirements)
grant early payment of deferred benefits and whether you will
waive any reductions
extend the 30 day deadline for a member to elect for a shared cost
APC upon return from a period of unpaid absence
You have a responsibility to act with 'prudence and propriety' in
formulating you policies and must keep them under review and
viewable by current and former members of the scheme. Further details
on the employer discretions are available from the Fund.
Cornwall Pension Fund also requires a copy of your agreed
employer discretions.
Page 11 of 27Employer
Ill Heath Retirement Discretion
Required
See page 11
for details
If you are intending to dismiss a Local Government Pension Scheme
(LGPS) member on ill-health / capability grounds, the following steps
must be followed:
The member must be referred to a qualified Independent
Registered Medical Practitioner (IRMP) to be assessed for potential ill
health retirement against the LGPS regulations.
The IRMP must provide a completed OH3 certificate and must not have
previously advised, or given an opinion on, or otherwise been involved in
the particular case for which the certificate has been requested.
The Pensions Ombudsman Service (TPOS) have highlighted the
importance of employers in obtaining a narrative report from the IRMP.
Narrative reports help employers to understand the reasoning behind the
medical opinion the IRMP has given. A full understanding of the IRMP’s
reasoning will be important to minimise the risk of you making a poor or
flawed decision, potentially resulting in a mal-administration claim from
the member.
Implementing the decision to award ill health benefits
The IRMP provides an opinion that the member meets the conditions set
out the LGPS regulations that the member is;
As a result of ill-health or infirmity of mind or body, permanently
incapable of discharging efficiently the duties of the employment
the member was engaged in and that the member;
As a result of ill-health or infirmity of mind or body, is not
immediately capable of undertaking any gainful employment
As the scheme employer, you decide whether to award an ill-
health retirement benefit and which tier to award according to the
likelihood of undertaking any gainful employment.
An active member who has qualifying service for a period of two years
and whose employment is terminated by an employer on the grounds of
ill-health is entitled to, and must take, early payment of a retirement
pension.
The amount of retirement pension that a member who satisfies the
conditions above receives is determined by which of the benefit tiers the
employer awards.
Further details on the benefit tiers, reviews and the notice letter are
available on our website within the “employers section”:
http://www.cornwallpensionfund.org.uk/jobs-and-careers/cornwall-
pension-fund/employers/ill-health-retirement/
Page 12 of 27Employer and Fund Actions
Cornwall Pension Fund (CPF)
Event Employer Action
Action
Complete new entrant form CPF set up a pension account
and return this to CPF for the member with employer
Assess the members Send a welcome pack
New Entrant contributions based on their including: scheme guide,
actual pay per job pension history form and
Notify the member of their expression of wish form to the
contribution rate member
Complete an election form CPF set up a pension account
and new entrant form, for the member with employer
returning these to CPF Send a welcome pack
Opt ins including: scheme guide,
pension history form and
expression of wish form to the
member
Change in employee Notify member of their new Not applicable
contribution rate contribution rate
Change of name, Complete an amendment CPF amend the record
address, marital/civil form with the amended accordingly
partnership status, details and return this to
working hours, periods CPF
of unpaid leave and date
of death
Completes a leaver form CPF close the pension
detailing the reason for account, calculate preserved
leaving, pension details, benefits and send a letter to
Leaver
CARE pensionable pay and the member advising them of
pensionable earnings – their pension options and
returning this to CPF benefits
Direct member to the CPF CPF refund contributions if
website to read the “can I opted out after 3 months and
opt out” section under the up to 2 years of joining
“thinking of joining” section scheme, if applicable
of the website which also CPF write to member / optant
includes details on the out to explain options
Opt outs 50/50 option If the individual has over 2
Refund contributions via years membership: CPF close
own payroll if opted out the pension account, calculate
within 3 months of joining preserved benefits and send a
Complete a leavers form letter to the member advising
and return this with the opt them of their pension options
out form to CPF and benefits
Complete year end Send employer the year end
template from CPF with all template and instructions for
the required information completion
Year end then submit to CPF Reconcile the year end data
Answer any queries from and update the pension
their members regarding accounts
CARE pay figures contained CPF send out the annual
Page 13 of 27within the annual benefit benefit statement (ABS)
statement (ABS) based on the information
supplied by the employer to
the member by the statutory
deadline of the 31st August
Refer members to employers
where this is a query
regarding the CARE pay
figures used
Make a decision for each of Employer discretions policy
the employer discretions, saved for future reference
construct a policy when calculating members
statement and then publish benefits etc.
this within one month of
joining the scheme (new
employers) and by 30th
June 2014 (existing
employers) so that both
existing and previous
Employer discretions
members can view this e.g.
on your website
Send employer discretions
to CPF
Review discretions on a
regular basis and provide
the updated details to CPF
within one month of the
changes
Page 14 of 27Contacts
This guide has been created as a basic guide to the information that must
be provided by employers to the Cornwall Pension Fund to ensure
effective administration of the fund, and therefore ensure the correct
benefit entitlement for all members of the fund.
The Cornwall Pension Fund is available during normal office hours to assist
with any queries or issues and the contact details are as follows:
Cornwall Pension Fund
Fourth Floor South Wing,
County Hall,
Truro
TR1 3AY
pensions@cornwall.gov.uk
www.cornwallpensionfund.org.uk
(01872) 322322
The Cornwall Pension Fund also has an Employer Liaison Officer – Matt
Allen, who can be contacted via email mallen2@cornwall.gov.uk or by
telephoning 01872 323563
There is also a dedicated website containing more detailed information
about the Cornwall Pension Fund, including all of the attached forms, at
www.cornwallpensionfund.gov.uk
The Cornwall Pension Fund website also has a dedicated Employer area;
http://www.cornwallpensionfund.org.uk/jobs-and-careers/cornwall-
pension-fund/employers/
Full HR and Payroll guides for the LGPS can also be found here;
http://www.lgpsregs.org/index.php/guides
Page 15 of 27This form is available to view
Appendix 1 – New Entrant Form and download at:
www.cornwallpensionfund.org.uk
Page 16 of 27This form is available to view
Appendix 2 – Employee Amendment Form and download at:
www.cornwallpensionfund.org.uk
Page 17 of 27Appendix 3 – Member Leaving Pensionable This form is available to view
and download at:
Service Form www.cornwallpensionfund.org.uk
Page 18 of 27Page 19 of 27
Appendix 4 – Final Pay Examples
Example 1 Basic Pay
Employee leaves/retires/dies on 6th October 2018 therefore the final
year’s pay is the pensionable pay in the period 7th October 2017 to 6th
October 2018.
Annual Salary from 1st April 2017 was £12,345.00 and £12,750.00 from
1st April 2018.
The final years pay is calculated as follows:
N.B. The 29th of February should NOT be counted in Final Pay Calculations
Days: /
From To 365 FTE
07/10/2017 31/03/2018 176 x £12,345 = £5,952.66
01/04/2018 06/10/2018 189 x £12,750 = £6,602.05
£12,554.71
Final Year’s Pay = 5952.66 + 6602.05 = £12554.71
Page 20 of 27Example 2 (with Honorarium)
Employee leaves / retires / dies as in Example 1. However this time the
employee received a pensionable honorarium of £1,200.00 in December
2017 for additional work during the period 1st December 2016 to 30th
November 2017.
This honorarium will need to be proportioned correctly over the relevant
final pay periods i.e. 7th Oct 2017 to 30th Nov 2017 and 1st December
2016 to 6th October 2017.
Days: /
From To 365 Honorarium
07/10/2017 30/11/2017 55 x £1,200 = £180.82
Total of the final pay for the period 7th October 2017 to 6th October
2018 = £12,554.71 + £180.82 = £12735.53
In this example the majority of the honorarium falls within a preceding
year. The year in question would be 7th October 2016 to 6th October 2017
and the annual salary from 1st April 2016 is £11,985.00 and £12,345.00
from 1st April 2017.
Final year’s pay calculated as follows:
Days: /
From To 365 FTE
07/10/2016 31/03/2017 176 x £11,985 = £5,779.07
01/04/2017 06/10/2017 189 x £12,345 = £6,392.34
£12,171.41
The honorarium has to be proportioned for the period 1st December 2016
to 6th October 2017 calculated as follows:
Days: /
From To 365 Honorarium
01/12/2016 06/10/2017 310 x £1,200 = £1,019.18
Total of the final pay for the period 7th October 2016 to 6th October
2017 =
£5779.07 + £6392.34 + £1019.18 = £13,190.59
Therefore the best final years pay is £13,109.59
Page 21 of 27Example 3 – Part-Time / Term-Time Employee
A part-time member ceases employment on 30 September 2018. The
contractual hours of employment and salary rates during the last year of
service are set out below.
Period Hours Wks Part-time Salary Full-time Salary
01.10.2017 to 20.10.2017 25/37 52/52 £11148.65 £16500.00
21.10.2017 to 31.01.2018 30/37 52/52 £13621.62 £16800.00
01.02.2018 to 31.03.2018 30/37 52/52 £13864.86 £17100.00
01.04.2018 to 30.09.2018 25/37 52/52 £12027.03 £17800.00
Note: * It is important that the Fund is informed of each revision in the
contract of employment.
Pensionable Remuneration (Full-Time Equivalent) 1.10.2017 - 30.9.2018;
01.10.2017 to 20.10.2017 at £16500.00 = 20 days / 365 x 16500.00 = 904.11
21.10.2017 to 31.01.2018 at £16800.00 = 103 days / 365 x 16800.00 = 4740.82
01.02.2018 to 31.03.2018 at £17100.00 = 59 days / 365 x 17100.00 = 2764.11
01.04.2018 to 30.09.2018 at £17800.00 = 183 days / 365 x 17800.00 = 8924.38
TOTAL £17333.42
If a part-time/term-time employee dies in employment we will
also need the Pensionable Remuneration (Actual Part-time Pay) to
calculate the Death Grant;
01.10.2017 to 20.10.2017 at £11148.65 = 20 days / 365 x 11148.65 = 610.88
21.10.2017 to 31.01.2018 at £13621.62 = 103 days / 365 x 13621.62 = 3843.91
01.02.2018 to 31.03.2018 at £13864.86 = 59 days / 365 x 13864.86 = 2241.17
01.04.2018 to 30.09.2018 at £12027.03 = 183 days / 365 x 12027.03 = 6029.99
TOTAL £12725.95
Page 22 of 27This form is available to view
Appendix 5 – Election Form and download at:
www.cornwallpensionfund.org.uk
Page 23 of 27This form is available to view
Appendix 6 – Opt-out Notice and download at:
www.cornwallpensionfund.org.uk
Page 24 of 27This form is available to view
Appendix 7 – 50/50 Election Form and download at:
www.cornwallpensionfund.org.uk
Page 25 of 27This form is available to view
Appendix 8 – Main Section Election Form and download at:
www.cornwallpensionfund.org.uk
Page 26 of 27This form is available to view
Appendix 9 – Monthly Contribution Schedule and download at:
www.cornwallpensionfund.org.uk
EMPLOYER MONTH
EMPLOYERS
PENSIONABLE PAYROLL PRIMARY SECONDARY TOTAL
£ £ £ £
EMPLOYEES
BASIC 50/50 ADDITIONAL - Pre ADDITIONAL Post 2014
BASIC - Main Scheme TOTAL
Scheme 2014 Scheme Scheme
£ £ £ £ £
Grand Total - £
Payment date -
Payment method -
Please e-mail to: pensioninvestments@cornwall.gov.uk
Cornwall Pension Fund
Fourth Floor South Wing,
County Hall,
Truro
TR1 3AY Page 27 of 27
pensions@cornwall.gov.uk
www.cornwallpensionfund.org.ukYou can also read
