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New members

Who is eligible to join the scheme, contribution rates and information about Auto Enrolment.

Who is eligible to join the scheme?

Under the current LGPS regulations, the information from the employer must be provided to the ERPF within two months of being brought into the scheme. This applies to new employees who are being brought into the scheme along with any employees who have previously opted out and have now requested to join (or re-join) the scheme.

Dependant on what type of employer you are will determine how you treat new employees and their access to the Local Government Pension Scheme (LGPS).

Scheduled Bodies - councils and other specified employers such as academies and further education establishments.

A scheduled body must provide access to the LGPS in respect of all of their employees who are not eligible to join another public sector pension scheme (such as the Teachers Scheme). Under the current LGPS regulations, with the exception of those with a contract of less than three months, all new employees must be initially enrolled into the LGPS.

Designating Employers - employers such as town and parish councils.

A designating employer can choose who is able to join the LGPS, normally done through a resolution. Where a designating employer makes a resolution to allow access to the LGPS, the ERPF cannot refuse them entry.

Admission Bodies – employers participating in the LGPS through an admission agreement.

Admission bodies will be one of two types – closed or open. Where an employer has a closed agreement, only those employees who join the scheme at the time of the agreement will be allowed into the LGPS. Any new starters after this will not be allowed. An open agreement will allow new starters into the LGPS but certain criteria may be set as to whether they are eligible.

What contribution rate do members pay?

Once you have calculated the members pensionable pay, you need to apply that member into a contribution banding; this is where you inform the ERPF of the rate.

The current bandings are:

ERPF contribution banding
If your actual pensionable pay is: You pay a contribution rate of:
Up to £13,700 5.5%
£13,701 to £21,400 5.8%
£21,401 to £34,700 6.5%
£34,701 to £43,900 6.8%
£43,901 to £61,300 8.5%
£61,301 to £86,800 9.9%
£86,801 to £102,200 10.5%
£102,201 to £153,300 11.4%
£153,301 or more 12.5%

What is Auto Enrolment and how does it work?

Automatic Enrolment requires all employers to enrol their workers into a qualifying workplace scheme if they are not already in one.

The law affects all employers, large and small, throughout the UK.

The Government is getting employers to enrol their workers automatically into a workplace pension so it’s easier for people to start saving for the future.

The Local Government Pension Scheme (LGPS) is classed as a qualifying pension scheme and current regulations dictate that employees should already be brought into the LGPS by their employer.

The LGPS is a very good pension scheme and a large proportion of current employees are already paying into the scheme, but not everyone has chosen to join, or has been permitted to do so. If you are already a current member of the LGPS you will not be affected by the auto enrolment rules but your employer will write to you and confirm this.

Any actively contributing member can request to stop paying into the LGPS. This can only be actioned with the receipt of a fully-completed ERPF Optout form – an employer cannot accept any other form of request to opt out of the scheme. This form is available from the ERPF website – as an employer, you are not allowed to give your employees an opting out form. This would be classed as a breach of the Automatic Enrolment regulations.

Also, a member can only opt out of the LGPS once they are in their post. What this means is, if you have an employee who is commencing employment (and eligibility to the LGPS) on 01 September 2015 – an employer can only accept a fully completed Optout form which is dated 01 September 2015 or later. If it is dated before, the form must be returned to the employee for amendment.

A guide can be found below which will provide further details and guidance on this topic.

Auto Enrolment and the LGPS - Feb 2016 (pdf 30mb opens in new window)

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