This information is designed to inform employers of their responsibilities, to provide guidance about typical events and provide you with contacts within pensions should you require further assistance.
If employers do not carry out their responsibilities in a timely and accurate manner, it can have a detrimental effect on their employees.
It will not always be possible for pensions to repair at a later date a situation that has had a detrimental effect on a member’s pension position through the employer failing to carry out their responsibilities at the correct time. Cases of member dissatisfaction can result in referrals to the Pensions Ombudsman.
Administering the scheme
The employer will:
- Ensure that each new employee who is eligible for admission to the Tower Hamlets Pension Fund is issued with a Member’s Guide, a new member form and a Death grant expression of wish form.
- Enter employees into the LGPS in accordance with the regulations.
- Determine the contribution rate to be paid by the new LGPS member.
- Notify LBTH Pensions of the necessary details so they can create a scheme member record.
- Inform all employees with a temporary contract that is extended to exceed three months that they will join the Tower Hamlets Pension Fund and of their option to backdate membership to their commencement date on the payment of appropriate pension contributions.
- Forward to Pensions all completed New Member Forms and all relevant supporting documentation together with any option forms.
- Determine the members’ pension contribution rate in the event of any permanent material change to the terms and conditions of a member’s employment and pay reviews which affect the pensionable pay.
- Advise Pensions of any instances where a member is on unauthorised absence or authorised absence e.g. maternity leave.
- Advise Pensions of any changes to employment which might affect the member’s LGPS record, including but not limited to:
- changes in contractual hours of working
- changes in contractual weeks of working
- changes in pensionable pay, including pensionable emoluments
- changes in status from casual/fluctuating hours to fixed hours or vice versa
- a change from manual worker to officer (for historical cases, this will affect contribution rate)
- change of employer
- change of location/department/place of work/role
- change in contribution rate.
- Notify Pensions of the date and reason for an active member leaving employment, together with all necessary details regarding the member’s entitlement under the LGPS.
- Supply the details of the Final Pay as defined by the LGPS.
- Provide Pensions with the date of and reason for an active member retiring from the employer’s employment, together with all necessary details for Pensions to notify the member of their entitlements under the LGPS.
- Determine the level of any ill health benefit in accordance with the Scheme Rules and notify Pensions accordingly.
- Notify Pensions of the death of a Tower Hamlets Pension Fund active member, by forwarding the appropriate Notification Form and, if available, a copy of the death certificate.
Communicating the scheme
Employers have a crucial role to play in making members aware of the benefits of the pension schemes throughout their careers.
Below is a summary of the benefits provided by the pension schemes:
- The employer makes a substantial contribution towards the cost of the pension.
- The pensions schemes not only provide the member with a regular income after retirement, but also provides their family or other dependants with financial protection after the member dies.
- All employees, both full time and part time, are automatically members of the scheme unless they elect to opt out.
- If the member becomes too ill to work, they may receive their pension early.
- The member can increase their pension credit by buying extra pension. They may also be able to transfer in pension credit from another scheme.
- The pensions schemes will pay a lump sum if the member dies before retirement and we may pay children’s and dependants’ pensions.
- The pension is index-linked, to protect its value against the effects of inflation.
Employers have a crucial role to play in helping members understand their pension provision.
- Ensuring members are kept informed of any changes to the scheme that may affect them.
- Providing information to new appointees such as the scheme guide, relevant fact sheets and by encouraging members to access information on the Tower Hamlets Pension Scheme website.
- Ensuring new appointees are aware that previous pension provision may be transferred into the pension schemes within one year of taking up their appointment.
- Educating members on options for planning how and when to retire, e.g. how new average salary calculation or phased retirement might support them winding down towards the end of their career
making members aware of options to increase their pension such as by buying AVCs or purchasing additional pension in the pension scheme.
- Encouraging members to periodically review their pension position by for example, making them aware of the pension modellers on the Tower Hamlets Scheme website.
- Ensuring members are aware of the need to register their unmarried partner with the pension scheme, if they want benefits to be paid to that partner after their death.
- Making members aware of what happens to their pension when they are on leave of absence.
Informing leavers of their options
Information on entitlement to benefits, and how these are calculated, is given in the scheme guide. Employers must ensure that new members are provided with this if they have not previously received one.
A Members’ Short Guide to the new LGPS Scheme is available to give to current members. The guide is available on the website or copies can be obtained from LBTH Pensions. (Employers are not encouraged to hold large stocks of this because it is regularly updated).
The administration of the pension schemes is subject to statutory regulations and employers have a crucial role to play in adhering to these requirements.
The London Borough of Tower Hamlets has statutory pension responsibilities, and is the administering authority under the Local Government Pension Scheme (“LGPS”), for the:
- Tower Hamlets Pensions Fund for Members
- Tower Hamlets Pension Fund for Councillors
They also have to comply with the Occupational Pension Schemes (Disclosure of Information) Regulations 1996 and the Occupational Pension Schemes (Transfer Values) Regulations 1996.
The Pensions Regulator supervises the pensions industry and ensures that pension schemes and employers meet the regulatory requirements. The Pensions Regulator has the power to impose fines on schemes and employers (and their individual managers) that do not comply with the regulations.