1. Local Government Pension Scheme February 2015 Pension Liaison Officers Group (PLOG) Employer Presentation Andy Cunningham Employer Relationship & Fund Development Manager Wiltshire Pension Fund

2. Local Government Pension Scheme Agenda 1). End of year return 2). Normal Actual/Assumed Pensionable Pay 3). Pension Remuneration 4). Employee and employer contributions 5). Refunds 6). Questions

3. Local Government Pension Scheme 1. End of year - introduction First year that CARE figures are required CARE figures will directly determine part of the value of a member’s pension – we rely on employers for accuracy Will be more time-consuming this year for employers and us Benefit statements deadline of 31 August 2015 (1 month earlier)

4. Local Government Pension Scheme 1. End of year return brief overview To be covered separately To help us estimate if CARE figures seem reasonable To be covered separately

5. Local Government Pension Scheme 1. End of year return brief overview (the following text can be found in full on the spreadsheet)

6. Local Government Pension Scheme 1. End of year return brief overview What do we do with the information return? We do some basic checks against the data provided to check the following: 1). If pay figures significantly differ from expectations 2). If there are members/jobs on the return for whom we have no pension record. 3). If there are members not present on the return who we believe is still part of the fund. We will then come back with queries where relevant.

7. Local Government Pension Scheme 2. Normal Actual/ Assumed Pensionable Pay How to complete this field? A). If the person has been on full pay throughout -> should be straightforward, as we just need to know the actual pensionable pay for 2014/2015 (or to date left) B). If they have been on reduced or nil pay  Assumed Pensionable Pay (APP) may apply. If it does, remove the reduced pay and replace by a calculation of APP and add to full pay for the rest of the period. C). If they have been on reduced/nil pay but APP doesn’t apply -> do A. Tip: If you have a large number of members, identify those who have been on reduced pay and deal with those manually. The rest should be able to completed by running a report.

8. Local Government Pension Scheme 2. Normal Actual/ Assumed Pensionable Pay When does assumed pensionable pay apply? In the following circumstances (ONLY) The member is on leave due to sickness or injury and is on reduced contractual pay or no pay; The member is on relevant child-related leave (i.e. ordinary maternity, paternity or adoption leave and any paid additional maternity, paternity or adoption leave but NOT unpaid additional maternity leave); or The member is absent on reserve forces services leave.

9. Local Government Pension Scheme 2. Normal Actual/ Assumed Pensionable Pay How do I calculate it? (these notes are on our website) 1). Calculate the total pensionable pay the person received in the 3 monthly pay periods immediately preceding the period of reduced or nil pay. 2). Determine the average daily pay for the 3 month period (after removing any one-off or non-standard additional payments). The easiest way to do this is to multiple the figure from 1 by 4 and then divide by 365. 3). Multiple up the figure from 2 so that it covers the entire period the member was on reduced or nil pay. 4). Then add this figure to the normal full pay for the year. Note: The total figure should be similarly to what their actual pay would have been if their pay had not been reduced.

10. Local Government Pension Scheme 3. ‘Pension Remuneration’ for end of year return What is it used for? For the purposes of the end of year return, we calculate all members’ pre-April 2014 benefits based on the figure you provide and insert this pension amount into a member’s benefit statement. The most accurate figure to provide is by doing a pension remuneration calculation. However, for the purposes of the end of year return (NOT leavers), you could base it on a member’s grade figure but in some cases, accuracy will be lost and could lead to more members querying this. Note: In all cases, figures, should be based on the pre-April 2014 definition of pensionable pay (e.g. excluding non contractual over-time)

11. Local Government Pension Scheme 3. Pension Remuneration How is it calculated? (accurately) - e.g. for leaver information The general idea is to calculate the average full-time equivalent pay that applied in the 12 months up until they left the Scheme. However (for leavers), if either of the two preceding years produce a higher figure than the highest figure should be used. We recommend you use our on-line calculator in all cases when there is a change of pay during the year

12. Local Government Pension Scheme 5. Pension Remuneration Example 1: Example 1: Basic Member leaves 31 st August 2014. In their final year, their FTE Salary history is: 1 st Sept 2013 to 31 st March 2014 = £35000 1 st April 2014 to 31 st August 2014 = £36000

13. Local Government Pension Scheme 5. Pension Remuneration Example 2: sdfsdf Example 2: With plussage Member leaves 31 st August 2014. In their final year, their FTE Salary history is: 1 st Sept 2013 to 31 st March 2014 = £35000 + 10% plussage = £38 500 1 st April 2014 to 31 st August 2014 = £36000 + 10% plussage = £39 600 Comment: For plussages or other percentage enhancements, it doesn’t matter whether the member is part-time or full-time.

14. Local Government Pension Scheme 5. Pension Remuneration Example 3: sdfsdf Example 3: Less than a year Member leaves 31 st December 2014, they worked less than a year. In their final year, their FTE Salary history is: 1 st May 2014 to 31 st August = £35 000 1 st Sept 2014 to 31 st December 2014 = £36000 Comment: The calculator will multiply the figure up for you.

15. Local Government Pension Scheme 5. Pension Remuneration Example 3: sdfsdf Example 4: Part-time & with a bonus Member leaves 31 st August 2014, in their final year, their FTE Salary history is 1 st Sept 2013 to 31 st March 2014 = £35000 1 st April 2014 to 31 st August 2014 = £36000 They work 50% of full-time and they are paid a bonus (or honorarium) of £1000. The bonus was £2 000 for equivalent full-time staff. Comment: You need to calculate this as before and then add on the full-time equivalent bonus. It could be that the bonus would be £1000 regardless of the hours in which case £1000 would be added instead of £2000 +£2000 =£37 419.18

16. Local Government Pension Scheme 5. Employee and employer contributions Provisional contribution rates have been released. Final ones to be sent around shortly (once confirmed) Basis will be the same but earnings thresholds will change. Employee contributions A reminder of these will be sent shortly. The agreed rates for 2015/2016 and 2016/2017 can be found in the employer’s guide (except for employers who have joined since April 2013, where there will be no change from the current rates) Employer contributions

17. Local Government Pension Scheme Under the 2014 Regs the situation is: A). Opt-outs within 3 months of joining the scheme i). Refund all pension contributions through payroll and re-instate any tax and the full amount of NI contributions ii). Please notify us over email that you have refunded contributions to the member. We do not need a leaver form in these cases. … 6. Refunds

18. Local Government Pension Scheme B). Opt outs between 3 months and 2 years; AND C). All leavers within 2 years of starting i). Do not refund through payroll. i). Send us a leaver form, ensuring all the relevant details are completed. Note: The member may be entitled to a refund if they meet a number of conditions but we will need to check this first. If a refund is due, we will process the refund D). Opt outs and leaver, 2 years plus Send us a leaver or retirement form as normal. The member is ineligible to receive a refund. 6. Refunds (cont.)

19. Local Government Pension Scheme Any questions?