Duties and responsibilities of an Academy under the LGPS regulations

Local Authority and Independent Schools which are granted Academy status are required to offer their non-teaching staff membership of the Local Government Pension Scheme (LGPS), under the terms of their Funding Agreement with the Secretary of State for Education.

As an academy, the school will acquire new responsibilities for the LGPS pension scheme that it did not have as a maintained school. This is because they will become a scheme employer for LGPS purposes. 

Pensionable employees
  • Automatically enrol eligible new staff into the LGPS where their contract is for 3 months or more or provide the option to join the scheme if your employee had a contract for less than this
  • Decide what percentage of pay the employee must pay into the LGPS and make the necessary deductions from their salary
  • Employer and employee pension contributions must be paid over to the Pensions Services by the 22nd of the month following deduction from salary
  • Provide a monthly remittance of the breakdown of employer and employee contributions
  • Keeping Pensions Services informed of any relevant changes to your pensionable employees:
    • Change of name
    • Any movement between main section and 50:50 section of the scheme
    • Change of payroll number 
    • Additional contribution contracts - starting or ending
Leavers

You must inform the Pensions Services when a pensionable employee leaves employment or opts out of the LGPS. The information that will be needed by Pensions Services to calculate any benefits that may be due will be the employee's:

  • Date of leaving
  • Reason for leaving 
  • Final year's pensionable pay
  • Service History
Retirements

As an employer you will need to manage retirements:

Flexible Retirement

This can only be authorised by an employer where  their discretionary policy allows for flexible retirement.

Redundancy and efficiency

Where a member is over the age of 55 and they are made redundant or dismissed on the grounds of efficiency an immediate pension becomes payable. A strain charge will be payable and must be met by the employer for anyone made redundant or dismissed on the grounds of efficiency who is over 55 and under normal pension age.

Ill-health Retirements

Active members

When an employer makes the decision to terminate a member's employment on the grounds of ill health, they cannot make this decision without having a certificate from an independent registered medical practitioner (IRMP) qualified in occupational health. The IRMP will give their opinion on the ill health tier awarded, however it is for the employer to decide whether to award tier 1, 2 , or 3 ill-health retirement benefits.

Deferred members

The Academy will be responsible for dealing with a request from a former employee for the early payment of these benefits on the grounds of ill-health. The process for this is the same as for active members except there are no tiers for ill health benefits from deferred.

Disputes and complaints

There is a two stage dispute procedure which deals with complaints from LGPS members in relation to pensions. If the complaint is in respect of a decision made by the Academy under LGPS regulations the employer must deal with Stage 1. 
For more information refer to our IDRP webpage.

Employer discretions

Under LGPS regulations all employers must have an up-to-date discretions policy. The Academy must publish policies on how they will exercise some of the discretions they have under the LGPS Regulations, no later than 3 months after it has became a Scheme Employer. A copy of the policy should be forwarded to Employer Services ([email protected]). The compulsory discretions that the Academy must publish policies on are:

  1. Power to award additional pension
  2. Power to allow flexible retirement
  3. Voluntary funding of additional pension - shared cost additional pension contributions
  4. Switching on the 85-year rule 
  5. Waiving of actuarial reductions

There are several optional discretions an employer may wish to include in their policy. For more information and a template for creating your policy, see Employer Discretions.

Charges

There are a number of charges that may be made to you as an employer:

  • Paying for extra/urgent estimates
  • Employer strain charge
  • Costs associated with outsourcing services
  • Costs of additional administration required due to decisions made by the Academy
  • Extraordinary services

For more information on these please refer to our Charges page.

End of Year information

Provide the pensions services with an annual return at the end of each scheme year giving details of employee contributions paid and pensionable pay.

Further information

If you need any more information or would like to discuss any of the above, please contact Employer Services ([email protected])