Employer Focus - April 2020
This bulletin from the Staffordshire Pension Fund, focuses on the Local Government Pension Scheme (LGPS) implications for employers as a result of the COVID-19 outbreak.
We understand that the current situation around COVID-19 continues to cause significant concern and uncertainty. However, we want to reassure you that we have taken a number of important steps to ensure we continue to support and work with you during these difficult times.
Therefore, in this edition we have set out a number of things we are doing to try and reduce the service impact to employers and the most frequently asked questions for employers regarding the impact of COVID-19.
In this edition we have also covered other topics affecting the LGPS.
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Frequently asked LGPS questions for employers on COVID-19 Back to top
Please see the Covid-19 FAQs for employers page.
Deadline for employer's submission (except employers using i-Connect) Back to top
We would like to remind all employers that the submission of data for the financial year ending 31 March 2020 must be received by Pensions Services no later than 24 April 2020, in order that we can comply with the requirement to issue annual benefits statements within statutory time limits.
This deadline will allow for data validation processes to be completed and any necessary data cleansing to be performed prior to the issue of our members' annual benefit statements.
Please note
Failure to respond by 24 April 2020 will result in the late issue of members' annual benefit statements, which constitutes a breach of law and which further invokes a legal requirement for the breach to be reported to the Pensions Regulator, exposing both the employer and the administrator to the risk of censure and financial penalty.
Please contact us immediately if you can't comply in the current circumstances or foresee any problems with meeting this deadline.
Actuarial valuation as at 31 March 2019 Back to top
The actuarial valuation of the Fund, which takes place every 3 years, reviews current funding plans and sets contribution rates for the Fund's participating employers for the period from 1 April 2020 to 31 March 2023.
A full copy of the actuary's report which summarises the outcomes of the valuation and the underlying advice the actuary has provided to the administering authority throughout the valuation process, is now available on our website.
Actuarial strain cost for early retirement - new factors from 1 May 2020 Back to top
Employers will be aware that, when your organisation agrees to an early retirement from age 55 for an employee who is a member of the LGPS, typically on grounds of redundancy, business efficiency or 'flexible retirement', there can be an additional employer's contribution payable to the Pension Fund. This additional payment is known as actuarial strain and represents the cost to the employer of permitting the early payment of a pension benefit.
At each triennial valuation the Fund actuary reviews the factors which are used in the actuarial strain calculation. The revised factors have now been agreed and, this time, have the effect of decreasing the actuarial strain costs in the majority of cases.
The Fund will implement the new factors for any retirements which take place after 30 April 2020.
Please note
In cases where the employee chooses to retire from age 55 without their employer's agreement, then no early retirement cost applies, and the employee's pension benefits are reduced accordingly.
The Fund normally holds an employer training day in June as well as quarterly training sessions for new academies. Under the current restrictions we are unable to host such events but do hope to resume them when restrictions are lifted.
In the meantime, if you do have any questions, issues or concerns, either individually or as a small group then please contact us about the subject matter, and if we do not already have training materials available, then we will be happy to provide suitable remote training in a mutually convenient form.
If you require any further information or clarification, please do not hesitate to get in touch: