Part 3, Section 14 · The Local Government Pension Scheme (Amendment) (No. 3) Regulations 2023

Contents

14Interest on payments under the statutory underpin#

(1)This regulation applies in relation to a person to whom regulation 5(3), (4), (5), (6) or (7), 6(5), 7(3), 8(4)(a) or (b), 10(5), 11(4) or 12(5A)(b), (6)(b), (6A)(b), (6B)(b), (6C)(b), (6D)(b), (6E)(b) or (c)(ii), or (6F)(b) applies.

(2)An administering authority must pay interest in respect of the following sums—

(a)the amount to be added to the person’s pension account under regulation 5(3) or (4) (retired members) relating to the period beginning with the date on which the pension in question was put into payment and ending with the date on which the final guarantee amount was added to the pension account;

(b)the amount to be paid under regulation 5(5) or (6) or 12(6A)(b) (deceased members);

(c)where regulation 5(7) applies (person who elected to commute an amount of their pension), any new lump sum arising from the amount added to the person’s account under regulation 5(3) or (4);

(d)the amount to be paid under regulation 6(5), 7(3), or 12(6B)(b) or (6C)(b) (death grants);

(e)the amount to be added to the survivor member’s pension account under regulation 8(4)(a) or (b) (survivor member’s pension account) relating to the period beginning with the date on which the survivor pension was put into payment and ending with the date on which the survivor guarantee amount was added to the survivor pension account;

(f)the amount to be paid to the member under regulation 11(4) or 12(6E)(b) or (c)(ii) (commutation payments);

(g)the amount to be added under regulation 12(6)(b) (difference between recalculated pension credit and pension in payment) relating to the period beginning with the date on which the pension credit member’s pension was put into payment and ending with the date on which the difference between the recalculated annual pension and the pension in payment is to be added to the retirement pension account under regulation 12(6)(b).

(3)An administering authority must take reasonable steps to pay interest in respect of—

(a)the amount to be paid to the scheme under regulation 10(5) or 12(6D)(b), unless the transfer to which that amount relates was a transfer to which paragraph (3A) applies;

(b)the amount to be paid to the person under regulation 12(6F)(b).

(3A)This paragraph applies to a transfer which—

(a)is a Club Transfer, and

(b)is not a transfer—

(i)that was completed before 1st October 2023, and

(ii)in respect of which the receiving scheme was a scheme other than a Chapter 1 Scheme, a judicial scheme, or another local government scheme.

(4)The interest is to be paid—

(a)where paragraph (2)(a), (c), or (f) applies, to the person;

(b)where paragraph (2)(b) applies, to the personal representatives in question;

(c)where paragraph (2)(d) applies, to the recipient of the death grant;

(d)where paragraph (2)(e) applies, to the person who has the survivor member’s pension account;

(e)where paragraph (2)(g) applies, to the pension credit member;

(f)where paragraph (3)(a) applies, to the scheme that received the original transfer;

(g)where paragraph (3)(b) applies, to the person that received the original payment.

(5)Interest under this regulation is payable from the relevant date until the day on which the amount in respect of which the interest is payable and the accrued interest are repaid in full.

(6)The “relevant date” is—

(a)where regulation 5(3), (4), (5) or (6) or 12(6A)(b) or (6E)(c)(ii) applies, the day that falls half-way through the period beginning with the day after the member’s final underpin date and ending with the date on which payment is made;

(b)where regulation 5(7) applies, the earliest day from which the administering authority would have been able to make the payment for a lump sum paid under regulation 5(7);

(c)where regulation 6(5), 7(3), 10(5) , 11(4) or 12(6B)(b), (6C)(b), (6D)(b), (6E)(b) or (6F)(b) applies, the day on which the original payment was made;

(d)where regulation 8(4)(a) or (b) applies, the day that falls half-way through the period beginning with the day after the person’s date of death and ending with the date on which payment is made;

(e)where regulation 12(6)(b) applies, the day that falls half-way through the period beginning with the day on which the pension credit member’s pension was put into payment and ending with the date on which payment is made.

(7)In paragraph (6)(c), “original payment” means—

(a)the death grant;

(b)the transfer out; ^note...

(c)the lump sum ; or

(d)the payment under paragraph 1(3) of Schedule 5 to the Welfare Reform and Pensions Act 1999

that was paid, or, as the case may be, made before 1st October 2023.

(8)Interest payable under this regulation is to be calculated in accordance with direction 38 of the PSP Directions 2022.

(9)For the purposes of paragraph (6), where there is no day that falls half-way through the period in question, any reference to that day is to be read as a reference to the first day of the second half of the period.

(10)In this Regulation—• “final underpin date” has the meaning given in regulation 4H(1) of the 2014 Regulations;• “pension credit member” has the meaning given in regulation 8(1) of the 2013 Regulations;• “the PSP Directions 2022” means the Public Service Pensions (Exercise of Powers, Compensation and Information) Directions 2022.

Contains public sector information licensed under the Open Government Licence v3.0.

Defined terms · 24

Show every defined term

active pension account
means a pension account in respect of which the eligible member is an active member;
deferred guarantee amount
has the meaning given in regulation 4P(3) of the 2014 Regulations.”
eligible member
has the meaning given in regulation 4A(2) of the 2014 Regulations;
final assumed benefits
means the benefits calculated in accordance with regulation 4K;
final guarantee amount
has the meaning given in regulation 1(6) of the 2014 Regulations;”
final underpin amount
means the amount calculated in accordance with regulation 4L;
final underpin date
has the meaning given in regulation 4H(1) of the 2014 Regulations;
HMRC
means His Majesty’s Revenue and Customs;
inactive pension account
means a pension account in respect of which the eligible member is no longer an active member. 4R 1 This regulation applies where the cash equivalent of an eligible member’s relevant benefits is, for the purpose of section 29 of the Welfare Reform and Pensions Act 1999 (creation of pension debits and credits), calculated in accordance with regulation 4 of the Pension Sharing (Valuation) Regulations 2000 (manner of calculation and verification of cash equivalents: occupational pension schemes). 2 Where this regulation applies, the cash equivalent of the relevant benefits is to be calculated in accordance with actuarial guidance issued by the Secretary of State. 3 “Relevant benefits” has the same meaning as in section 29 of the Welfare Reform and Pensions Act 1999. 4S 1 An administering authority may, in respect of a compensatable loss that is a Part 4 tax loss incurred by an eligible member— a not pay an amount under section 82 of PSPJOA 2022 by way of compensation in respect of the loss;
IRMP
has the meaning given in Schedule 1 to the 2013 Regulations. 4P 1 This regulation applies where— a an eligible member who is a deferred member or deferred pensioner member of the 2014 Scheme dies;
new scheme
has the meaning given in regulation 98(1) of the 2013 Regulations.
original payment
means— that was paid, or, as the case may be, made before 1st October 2023.
original retirement pension
means the amount of the eligible member’s retirement pension as at the day of the eligible member’s first final underpin date. 7 Paragraphs (8) to (10) apply where the eligible member— a began their reduced working hours or grade of employment during the underpin period;
pension credit member
has the meaning given in regulation 8(1) of the 2013 Regulations;
provisional assumed benefits
means the benefits calculated in accordance with regulation 4I;
provisional underpin amount
means the amount calculated in accordance with regulation 4J;
Relevant benefits
has the same meaning as in section 29 of the Welfare Reform and Pensions Act 1999. 4S 1 An administering authority may, in respect of a compensatable loss that is a Part 4 tax loss incurred by an eligible member— a not pay an amount under section 82 of PSPJOA 2022 by way of compensation in respect of the loss;
survivor guarantee amount
has the meaning given in regulation 4O(3) of the 2014 Regulations.”
the 2013 Regulations
means the Local Government Pension Scheme Regulations 2013;
the 2014 Regulations
means the Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014.
the appropriate person
means the eligible member or, if they are deceased, their personal representatives. 4U An administering authority may pay compensation to a person in respect of the 2014 Scheme under section 82(1) of PSPJOA 2022 (power to pay compensation to members or personal representatives in respect of compensatable losses) or additional benefits payable by virtue of regulation 4S from the pension fund concerned. 4V 1 This regulation applies where an administering authority pays additional benefit to an eligible member under regulation 4S (indirect compensation). 2 Interest is to be paid in respect of the additional benefit in accordance with regulation 14 of the Local Governmen
the PSP Directions 2022
means the Public Service Pensions (Exercise of Powers, Compensation and Information) Directions 2022.
underpin date
has the meaning given in regulation 4G;
underpin period
has the meaning given in regulation 4A(3)”

The Local Government Pension Scheme (Amendment) (No. 3) Regulations 2023

14Interest on payments under the statutory underpin#

Defined terms · 24

History · 1 version

14Interest on payments under the statutory underpin#

Key facts