The LGPS require pension decisions to be made by scheme employers in a wide range of circumstances, some of these decisions may require scheme employers to exercise a discretion.
Decisions made by a scheme employer can be divided into three basic types:
- A decision made on employment grounds and this, combined with basic information on the person, dictates the pension decision that has to be made; e.g. a member, who is over age 55 but below their Normal Pension Age, is being made redundant; therefore immediate payment of unreduced pension benefits should be made on grounds of redundancy.
- A decision that requires the employer to exercise a discretion on the pension decision; e.g. whether to allow flexible retirement.
- A decision on which the regulations are technically clear but, in reality, reasoned judgment is needed on making decisions; i.e. tiered contribution rate.
Please note that any decision made by a scheme employer could be subject to an appeal.
LGPS regulations give scheme employers some discretionary powers where employers are required to:
- Formulate, publish and keep an up to date policy statement on the main discretions
- Ensure you are applying any other discretions correctly
- Have a procedure in place to respond to individual requests for you to exercise your discretionary powers.
A comprehensive list of scheme employer discretions can be found below.
You should review this list periodically to ensure that you have policies in place to cover these discretions.
The LGPS Regulations 2013 specify that existing scheme employers should have provided the Pensions Fund with a copy of their discretions Policies. They should also review and update their discretions policies at least every 3 years.
New scheme employers are required to provide the Clwyd Pension Fund with a copy of their discretions policies within 30 days of joining the Pension Fund.