The Local Government Pension Scheme (Scotland) Amendment (No. 2) Regulations 2006

Publication Date:January 01, 2006

2006No. 468


The Local Government Pension Scheme (Scotland) Amendment (No. 2) Regulations 2006



The Scottish Ministers, in exercise of the powers conferred by sections 7 and 12 of the Superannuation Act 1972 1 and of all other powers enabling them in that behalf, after consultation with such associations of local authorities as appeared to them to be concerned and such representatives of other persons likely to be affected by the proposed Regulations as appeared to them to be appropriate, and not having considered consultation with any individual local authority to be desirable, all in accordance with section 7(5) of that Act, hereby make the following Regulations:

Citation, commencement and application


(1) These Regulations may be cited as the Local Government Pension Scheme (Scotland) Amendment (No. 2) Regulations 2006.

(2) These Regulations extend to Scotland only.

(3) These Regulations shall come into force on 6th October 2006 but regulations 10, 14, 18(3), 21, 23, 24, 31 and 35 shall have effect from 6th April 2006.

Amendment of Regulations

2.The Local Government Pension Scheme (Scotland) Regulations 1998 2 ("the principal Regulations") are amended in accordance with regulations 3 to 7, 8(1) and 9 to 40.

Requirements for admission agreements

3.Omit regulation 4B(4).

Further restrictions on eligibility

4.In regulation 5-

(a) after paragraph (2A) insert-

(3A) A person may not become a member after the day before his 75th birthday.

; and

(b) omit paragraphs (4) and (5).

Periods of membership: "total membership"

5.In regulation 8-

(a) omit paragraph (1A); and(b) in paragraph (2) insert "10A," after "10" and omit "and Schedule 4".

High earners

6.After regulation 10, insert-

High earners


(1) This regulation applies to a member who was subject to regulation 15(1) immediately before 1st October 2006 and whose pay (calculated in accordance with regulation 12) in the year ending 5th April 2006 exceeds £105,600.

(2) In such a case, his period of membership for calculating his benefits payable under these Regulations is obtained by aggregating his period of membership after that date with the period obtained by applying the formula set out in paragraph (3).

(3) That formula is- (M ×

105,600 /P

) +T,


M is his period of membership after 5th April 1989 and before 1st October 2006 (excluding any membership credited by virtue of a transfer under regulation 121);

P is his pay as mentioned in paragraph (1); and

T is the aggregate of his period of membership before 6th April 1989 and any membership credited by virtue of a transfer under regulation 121..

Members' contributions

7.In regulation 11-

(a) in paragraph (1), omit "(but see regulation 14)"; and(b) in paragraph (7), for "Regulations 15 to 17" substitute "Regulations 16 and 17".

Employer's discretion to reduce members' contribution rate


(1) Omit regulation 14.

(2) Where, before its omission by paragraph (1), a member's liability to make contributions to the Scheme has been reduced or, as the case may be, extinguished in accordance with regulation 14, his employing authority may recover any such contributions as would otherwise have been made.

Inland Revenue limits on contributions

9.Omit regulation 15.

Limit on total amount of benefits

10.After regulation 18 insert-

Limit on total amount of benefits


(1) A member and any dependant of his shall not be entitled, under any provision of these Regulations, to receive benefits the capital value of which exceeds his lifetime allowance, increased where applicable by his primary protection or enhanced protection, except in accordance with guidance issued by the Government Actuary.

(2) In this regulation, "lifetime allowance", "primary protection" and "enhanced protection" are to be construed in accordance with section 218 of, and Schedule 36 to, the Finance Act 2004 3.

(3) Any calculation of the capital value of a member's benefits is to be carried out in accordance with guidance issued by the Government Actuary.

Deduction of tax

18B.The appropriate administering authority is responsible for deducting from any payments of benefits under the Scheme any tax to which they may become chargeable under the Finance Act 2004..



(1) Regulation 19 is amended as follows.

(2) After paragraph (3) insert-

(3A) A member in respect of whom a benefit crystallisation event occurs on or after 1st October 2006 may elect in writing to the appropriate administering authority before any benefits become payable to increase the retirement grant payable under paragraph (3) by commuting his pension, or a part thereof, at a rate of £12 for every £1 of annual pension entitlement surrendered.

(3B) But the total amount of the member's retirement grant, including any sum received-

(a) in accordance with an election under paragraph (3A);(b) as benefits provided in the form of a lump sum in accordance with regulation 63; or(c) as additional lump sum benefits in accordance with regulation 65,

shall not exceed 25% of the capital value of his accrued rights.

(3C) For the purposes of this regulation, a member's accrued rights include rights accrued in respect of any payments made by or for him in accordance with Chapter IV of Part III (Additional Voluntary Contributions).

(3D) The capital value of a person's accrued rights shall be calculated as shown in guidance issued by the Government Actuary.

(3E) In paragraph (3A), "member" includes a deferred member to whom regulation 4 of the Local Government Pension Scheme (Transitional Provisions) (Scotland) Regulations 1998 4 (Deferred members and pensioners: general) applies..

(3) For paragraph (4A) substitute-

(4A) Where a benefit crystallisation event has not occurred before the day after a member's 65th birthday in respect of any benefit payable under the Scheme, that benefit shall be increased at such a rate as is shown as appropriate in guidance issued by the Government Actuary..

(4) In paragraph (6) omit sub paragraphs (c), (e) and (f).

Final pay

12.In regulation 20(1), omit "and Schedule 4".

Revenue limits

13.Omit regulation 23.

Retirement after age 65

14.In regulation 24A-

(a) in paragraph (1), for "when he retires from service" substitute "in accordance with paragraph (2)"; and(b) for paragraph (2) substitute-

(2) The pension and retirement grant are payable immediately on retirement or, if earlier, on the day before the member's 75th birthday..

Other early leavers: deferred retirement benefits and elections for early payment


(1) In regulation 30(7), at the beginning insert "Subject to paragraph (7A)".

(2) After regulation 30(7), insert-

(7A) A member who continues to be employed by a Scheme employer listed in Schedule 2 is only entitled to receive a pension and grant without reduction payable from his NRD if his employer consents to his doing so..

Re employed and rejoining deferred members

16.In regulation 31, omit paragraph (2).

Surrenders of pension

17.Omit regulation 32.

Requirements as to time of payment


(1) Regulation 34 is amended as follows.

(2) After paragraph (1) insert-

(1A) But where, after 1st October 2006, a member who has attained the age of 50, with his employer's consent, reduces the hours he works, or the grade in which he is employed, he may elect in writing to the appropriate administering authority for benefits to be paid and such benefits may, with his employer's consent, be paid to him notwithstanding that he has not retired from that employment.

(1B) If the payment of benefits referred to in paragraph (1A) takes effect before the member's 65th birthday, the benefits payable are reduced in accordance with guidance issued by the Government Actuary.

(1C) But the employer may choose to waive, in whole or in part, any such reduction.

(1D) Where the employer so chooses, it shall pay to the fund the cost incurred as a result of such waiver as calculated by the fund's actuary.

(1E) Any benefits paid following an election under paragraph (1A) are not subject to abatement under regulation 110 in respect of any subsequent employment with the person who is his employer at the date of his election..

(3) For paragraph (2), substitute "In any event, retirement benefits under this Chapter must begin to be paid no later than the day before the member's 75th birthday even if he has not retired (and see regulation 35(3)).".

Guaranteed minimum pensions etc.

19.In regulation 35, omit paragraphs (7), (8) and (9).

Surviving spouse's or civil partner's long-term pension

20.In regulation 40(6), after "death" insert "or half his pension before any commutation under regulation 19(3A), whichever is the greater".

Meaning of "eligible child"

21.In regulation 43-

(a) at the beginning of paragraph (2) insert "Subject to...

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