The University will not normally make use of this discretion but may consider its use in exceptional circumstances.

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1 University Of Portsmouth Discretions Policy - Local Government Pension Scheme 2014 The University is required to have a discretions policy to comply with the Local Government Pension Scheme (LGPS) Regulations. There are some discretions which are compulsory and others are optional. This policy applies to LGPS 2014 only. The decision to exercise discretions will be taken after having considered: The cost to the University where there is a cost to the University, it will not normally make use of the discretion but may consider its use in exceptional circumstances Issues of fairness and consistency Potential discrimination Impact on the wider fund employers should the University exercise discretion outside of the stated policy Decisions falling outside this policy must be referred to the Director of Human Resources who will make a recommendation to the University Executive Board. Compulsory Discretions 1. Awarding additional pension Employers can award active members additional annual pension of up to An award may also be made within six months of leaving to members who have left on the grounds of redundancy or business efficiency. This can be a one-off contribution to buy a set amount of additional pension. The University will not normally make use of this discretion but may consider its use in exceptional circumstances. 2. Shared cost additional pension contributions (SCAPC) In cases of authorised unpaid leave (e.g. maternity, paternity, adoption leave) members can purchase the lost pension. Under the scheme rules, provided they notify Human Resources, in writing, within 30 days of the date on which their pay recommences that they wish to purchase the lost pension, this will automatically be a SCAPC. The university has no discretion in these circumstances. However, employers can agree to meet some of the cost when an active scheme member wishes to increase their pension (up to a maximum of 6500 per annum). This can be a one-off payment or regular additional pension contributions, at any proportion agreed. The University will not normally make use of this discretion 3. Flexible retirement Employers can allow a member aged 55 or over to draw all the pension benefits they have already built up whilst still continuing in employment provided the employer agrees to the 1 The amount will be increased each April by the Pensions Increase 1

2 member either reducing their hours or moving to a position on a lower grade. In such cases, pension benefits will be reduced in accordance with actuarial tables unless the employer waives the reduction either fully or in part. The employer will pay any cost for early payment of the benefits, including the additional costs of waiving any early payment reduction. The University will consent to flexible retirement provided: There is no cost to the University and The proposed reduction in hours/grade is agreed and is in the business interests of the department/school and The flexible retirement is agreed by the employee s Head of Department and The individual reduces their remuneration by at least 40% by either a reduction in contractual hours or grade and The hours or grade do not revert back within 12 months of changing. The University may consider paying the cost in exceptional circumstances. 4. Waiving of actuarial reductions Employers can agree to waive any actuarial reduction on pre 2014 benefits on compassionate grounds and/or waive (on any grounds) all, some or none of the reduction on post 2014 benefits. The employer will pay the cost of waiving the reductions. The University will only waive the actuarial reduction in exceptional circumstances. 5. Switching on the 85 year rule This applies to members voluntarily drawing benefits on or after age 55 and before age 60. The 85 year rule does not automatically apply if the employee decides voluntarily to draw benefits on or after age 55 and before age 60. Employers can agree to switch on the 85 year rule and the employee will benefit from whatever level of protection they qualify for. If the employer decides to switch on the 85 year rule, some or all of the employee s pension benefits will not be reduced or will only be partly reduced. There will be a charge to the employer. If the rule is not switched on the member would have their both their pre- and post benefits actuarially reduced. The University will not normally make use of this discretion as there will always be a charge to the employer but may consider its use in exceptional circumstances. 6. Early payment of pension benefits to leavers between 1 April 2008 and 31 March 2014 An employer can allow the early payment of deferred benefits to those with pre 2014 benefits between ages 55 and 59. They may also allow early payment of pensions to former employees who were in receipt of a tier 3 ill health pension which has since been suspended. In such cases, benefits will be actuarially reduced unless the employer waives the reduction on compassionate grounds or a member has protected rights. The employer will pay any charges for early payment of benefits, including the additional cost of waiving any early payment reduction. The University will not normally make use of this discretion but may consider its use in exceptional circumstances. 2

3 Other discretions 1. Membership aggregation If an employee has previous LGPS membership then they will need to make a decision about whether it is combined with their new LGPS membership. Unless an election is made to keep benefits separate within the first 12 months of commencing employment, the benefits will be combined. The University will apply the 12 month limit but may consider extending it in exceptional circumstances. Applications to extend the period must be made, in writing, to the Director of HR. 2. Transfers of membership An active member of the pension scheme may request to transfer previous pension rights into the LGPS. The member must make the request within 12 months of becoming an active member. The University will apply the 12 month limit but may consider extending it in exceptional circumstances. Applications to extend the period must be made, in writing, to the Director of HR. 3. Redundancy and Additional Pension Contributions (APCs) The University will permit the part of the redundancy payment in excess of the statutory maximum to be used to make a lump sum APC to buy additional pension in the LGPS. This will be at the employee s cost, the University will not make a contribution. The employee must be an active member of the LGPS, regardless of age, at the time of the redundancy and the request must be made by the employee, in writing to the Director of HR, before their employment ceases. NB: An employee made redundant or retired for business efficiency reasons when aged 55 or over, provided they have met the two years vesting period in the LGPS, will receive immediate payment of their pension benefits with no reduction for early payment of their pension. This is a rule of the scheme and there is no discretion in such cases. Any charge for early payment will be met by the University. 4. Additional Voluntary Contributions (AVCs) The University does not contribute to the cost of employees AVCs 5. Contribution Bands Where a change in pay takes place which moves the employee into a different contribution band, the new band will be applied from the following 1 April. 3

4 LOCAL GOVERNMENT PENSION SCHEME Hampshire Pension Fund Statement of Decisions and Policy (pre 1 April 2014) The pension information entitled Your Pension An Employee s Guide, which an employee receives upon joining the University, explains that your employer has several discretionary provisions and these are set out below : Pensionable Service (regulation 30 (5)) The University will allow a woman s pensionable service between 1 April 1972 and 5 April 1988 to count towards the calculation of her widower s pensions. It will not reduce or suspend the added years pension paid to an employee who had been an early retirer during a period of re-employment. Power to increase total membership (regulation 12) Augmentation of service of a new Scheme member or of a retiring Scheme member will not generally be exercised, unless specifically authorised in advance by the Directorate in order to assist recruitment and retention of staff with key skills or to facilitate the operation of the Staff Reduction Policy and Procedures respectively. The University will treat each case to award augmentation on its own merits, taking all costs into account. The member s total additional membership under this regulation (including additional membership in respect of different employments) must not exceed 10 years. Power to award additional pension (regulation 13) The power to award an additional amount of pension to an active member, up to of pension per annum, will not generally be exercised, unless specifically authorised in advance by the Directorate in order to assist recruitment and retention of staff with key skills or to facilitate the operation of the Staff Reduction Policy and Procedures respectively. The University will treat each case to award additional pension on its own merits, taking all costs into account. Increase Active Membership The University will consider increasing total membership of an active member only where specifically authorised in advance by the Directorate in order to assist recruitment and retention of staff with key skills. The University will treat each case to award an increase in active membership on its own merits, taking all costs into account. 4

5 Increase Membership where Retired through Efficiency The University can consider, where an employee is retiring in the interests of the efficiency of the service consider buying the employee additional service in the LGPS using an amount no greater than the payment the employee would have received had the employee been made redundant. This option is only open to the employee if the employee requested it before the employee s employment ceases. Aggregation of previous periods of membership (regulation 32 (8 A.)) The University will not consider either extending or accepting employee elections to combine pension rights from previous local government employment with a current period of membership, which are made after 12 months of the employee re-joining the scheme, except for those employees who hold certificates of protection. Election for early payment of benefits (regulations 30) The University will only consider the immediate payment of benefits to a member of staff who resigned between age 55 and 60 (or age 50 for employees who have been in the LGPS since 31 March 2008, leaving before 31 March 2010), where the Directorate believed that there are clear benefits, financial or otherwise, accruing to the University that outweigh the cost. Waiving of early payment reductions on compassionate grounds(regulation 30 (5)) The University will consider the immediate payment of benefits without reduction to a member of staff between age 55 and 60 (or age 50 for employees who have been in the LGPS since 31 March 2008, leaving before 31 March 2010) on compassionate grounds, provided that the Directorate is satisfied that the person had to give up work to care for an aged or sick relative or partner. The University will consider payment of preserved benefits without reduction to a former employee between age 55 and 60 (or age 50 for employees who have been in the LGPS since 31 March 2008, leaving before 31 March 2010) on compassionate grounds. This will be subject to the approval of the Directorate and will be agreed only in exceptional circumstances, and provided that the Directorate is satisfied that the person had to give up work to care for an aged or sick relative or partner. Flexible retirement (regulation 18) The University will consent to pension benefits being paid under the flexible retirement policy to an employee over the age of 55 (or age 50 for employees who have been in the LGPS since 31 March 2008, leaving before 31 March 2010), who requests this, provided their remuneration is reducing by at least 40% either by a reduction in contractual hours or grade. In addition, agreement must also be obtained from the employee s Head of Department and Director of Human Resources. Waving early retirement reduction for flexible retirement (regulation 18 (3)) The University will consider, in exceptional circumstances, waiving some or all of any reduction in benefit where a member has obtained, through the employer s consent, Flexible Retirement, only where the Directorate believes that there are clear benefits, financial or otherwise, accruing to the University that outweigh the cost. This will be subject to the approval of the Directorate and will be agreed only in exceptional circumstances, and provided that the Directorate is satisfied that the person had to give up work to care for an aged or sick relative or partner. 5

6 Transfer of pension rights (regulation 121) The University will not consider either extending or accepting an employee s election for transfer of pension rights from an external provider into the LGPS if this election is made after 12 months of the employee joining the LGPS. The University has a transitional provision that the 12 month limitation on transferring employee s previous pension rights into the LGPS may be extended, subject to there being no cost to the University upon the retirement of the employee. This transitional provision applies only to those active employees who have made a written request/application for a transfer illustration to LGPS before Employees can apply for the LGPS Transfer Application Form from either Human Resources or Hampshire County Council. Contributions -Over 40 years service Following resumption of payment of contributions which previously had been waived where the employee had accrued 40 years in the LGPS by age 60, the University will not look to immediately reclaim any contributions which could have been collected under the waived period. However, the University reserves the right to request waived contributions if it is in the interest of the pension fund and/ or University. Unpaid leave The University will not consider extending the general limitation on paying retrospective contributions following a period of unpaid leave. A member of staff must make an election within 30 days of their return to work, or within 30 days of leaving the employment of the University if they do not return to work, if they wish to make up contributions in respect of the period of unpaid leave. Cost Sharing AVCs It is University policy not to contribute to sharing the cost of employee s additional voluntary contributions. Redundancy Payments The University will calculate redundancy payments for staff to whom the Discretionary Compensation Payment Regulations apply by reference to the actual weekly pay of the employee concerned, not merely by reference to the statutory sum set by Parliament. That part of your redundancy payment that relates to earnings in excess of the statutory maximum can be used to buy additional service in the LGPS. This option is only open to an employee if the employee requested this before the employee s employment ceases. Enhanced Early Termination Payments The University will not in general award enhanced termination payments to an employee to whom the Discretionary Compensation Payment Regulations apply who is made redundant. The University will consider whether to exercise its discretion in exceptional circumstances. The University will treat each case to award lump sum compensation on its own merits, taking all costs into account. 6

7 Discretionary Compensation Compensatory Added Years (Transitional protection provision available before whereby either the 2000 regulations or 2006 regulations may be applied to an employee whose employment commenced before and whose termination date is on or after and before ) The University will not in general award compensatory added years to an employee to whom the Discretionary Compensation Payment Regulations apply who is made redundant. The University will consider whether to exercise its discretion in exceptional circumstances. The University will treat each case to award compensatory added years on its own merits, taking all costs into account. 7