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Here you will find the latest news from the West Midlands Pension Fund...

Information for Customers - Public Sector Exit Cap

The Government first announced plans to cap exit payments in the public sector in 2015. The aim to capping exit payments was to end six figure exit payments for public sector workers, believing that these payments are neither fair nor do they 'offer value for money to the taxpayer who funds them'. This issue has been on the radar for some time now, however on the 4th November 2020 regulations were laid out by HM Treasury (HMT), introducing new rules that must be applied to the public sector in order to limit employer exit payments.

The limit of an exit payment has now been set at £95k (otherwise known as the £95k cap), any exit payments which exceed this amount will mean restrictions will apply and members will have to choose how they want their benefits to be paid.

What is an exit payment?

An exit payment includes redundancy payments (both statutory and discretionary compensation payments) and any pension strain cost (which arise when an LGPS pension is paid unreduced before a member's normal pension age) and other payments made as a consequence of termination of employment.

What is a pension strain cost?

If an employer agrees to an employee receiving their pension benefits early before their normal retirement age, the employer will be responsible for covering the cost of the strain for any early release of benefits. This is because provisions for early exits are not included in their standard employer contributions. This extra payment is also known as the pension strain cost and is payable to the West Midland Pension Fund.

How will the £95k cap work?

The exit payment cap is set at a total of £95,000.

Exit payments include:

  • redundancy payments (including statutory redundancy payments)
  • severance payments
  • pension strain costs that arise when an LGPS pension is paid unreduced before a member's normal pension age, and
  • other payments made as a result of termination of employment.

The cap applies to all exit payments that arise within 28 days of their end of employment

Who will the £95k cap apply to?

We understand that the revised requirements will only apply to employers who are set out in the HMT Regulations as employers where the exit cap can be applied. This means that the restrictions described above will apply generally only to members of public sector bodies. This means that not all employers would be affected for example some Higher/Further Education bodies and some Transferee/Community Admission Bodies maybe exempt.

What are my obligations?

A person who receives an exit payment must inform any other public body covered by the regulations that employs them about that payment. An employer must ensure that any exit payment does not exceed the cap (unless permitted by the relaxation directions) and, where a non-compliant payment is made, recover any overpayment subject to a value for money assessment.

Where do I find out further information?

As this is new legislation where understanding is continually evolving, further information can be found on the Local Government Pension Scheme Advisory Board website https://lgpsboard.org/. The Fund is currently seeking advice on the payment of benefits for any members who could be affected under these new changes.

 


Information for Customers - Covid19

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Changes to survivor's benefits for same-sex husbands, wives and civil partners (June 2019)

A change has been made as a result of a Supreme Court judgment (Walker v Innospec) which found that Mr Walker's husband was entitled to the same benefits that would have been paid if Mr Walker had died and left a widow in an opposite-sex marriage.

Why does this apply to the LGPS?

The government believes that the implication of this judgment for all public-service pension schemes, including the LGPS, is that surviving civil partners or surviving same-sex husbands or wives should receive benefits equal to those that would be left to the widow of a male member of the scheme.

When does the change take effect from?

The change is backdated to the date that civil partnerships and same-sex marriages were introduced. This is 5 December 2005 for civil partnerships and 13 March 2014 for same-sex marriages.

This means that if a member of the LGPS has died leaving a surviving civil partner or a same-sex husband or wife, the survivor's pension will need to be reviewed and any extra amounts paid, if this applies. We are currently reviewing the effect of this change and will tell you if it applies to you.

The change will automatically be taken into account in survivors' benefits paid to civil partners and same-sex husbands and wives in the future.


Updates to Scheme Actuarial Factors (October 2018)

The Fund has been made aware that the Scheme's actuarial factors are to be revised. We will keep you informed of any changes through this web page.

 

Annual Benefit Statements 2018 (August 2018)

Annual Benefit Statements are currently being uploaded to the Pensions Portal so "Be Pension Smart" and check your Pensions Portal account today! This year, the Fund has implemented a rolling benefit statement production to maximise the number of statements we produce. Visit our Annual Benefit Statement  page for more information.

 


New 'Be Pension Smart' video for contributing members  (August 2018)

If you are actively contributing to the scheme, please click here to find out how you can be pension smart.

 


Updates to the LGPS for active and deferred members (Disclosure Update July 2018)

If you are actively contributing to the scheme or you have a deferred pension benefit, there have been some updates to the LGPS.

For more information on these updates, please select the relevant link below:

pdf icon Deferred Member Disclosure Update 2018 [375kb]

pdf icon Active Member Disclosure Update 2018 [377kb]

 


New Pensions Portal Guidance & Support page (July 2018)

Click here for Portal Guides, videos and FAQs

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Portal Guide Image


The Fund has launched a new-look Pensions Portal (August 2017)

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My Pensions Portal

 

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