Employee Contribution Rates

The employer contribution rate will be a percentage of LGPS salary roll.

During a period of sickness, with a member receiving either reduced pay or no pay, or reduced pay due to child related leave, employer contributions should continue to be paid. This will ensure that an employer is not underfunding the cost of the member's pension benefits at any time. The level of employer contributions will therefore instead become a percentage of the Assumed Pensionable Pay (APP) that you will have to calculate in cases of sickness, or paid child related leave in order to rebuild pension rights.

Employer contributions are not altered if a member has elected to participate in the 50/50 Scheme.

The definition of Pensionable Pay is all payments in respect of the job, apart from those listed in the regulations as exclusions.

Under the Regulations, an employee’s pensionable pay is the total of:

• all the salary, wages, fees and other payments paid to the employee, and
• any benefit specified in the employee’s contract of employment as being a pensionable emolument

An employee’s pensionable pay doesn't include:

• any sum which has not had income tax liability determined on it
• any travelling, subsistence or other allowance paid in respect of expenses incurred in relation to the employment
• any payment in consideration of loss of holidays
• any payment in lieu of notice to terminate a contract of employment
• any payment as an inducement not to terminate employment before the payment is made
• any amount treated as the money value to the employee of the provision of a motor vehicle or any amount paid in lieu of such provision
• any payment in consideration of loss of future pensionable payments or benefits
• any award of compensation (excluding any sum representing arrears of pay) for the purpose of achieving equal pay in relation to other employees
• any payment made by the Scheme employer to a member on reserve forces service leave
• returning officer, or acting returning officer fees other than fees paid in respect of:
  • local government elections
  • elections for the National Assembly for Wales
  • Parliamentary elections, or
  • European Parliamentary elections

Unlike in the 2008 scheme, where benefits are based on the pensionable pay due for a period, not pensionable pay received in that period, benefits in the 2014 CARE scheme will be calculated based on the pensionable pay that is received in the Scheme year (1 April to 31 March) and not the pay due during that period. There is therefore no need to adjust pensionable pay on payment of arrears or other payments which are paid in the current pay period but not related to the current pay period.

Wrongly deducted pension contributions should be amended as soon as the error has been picked up, as items which are listed as non-pensionable will not be used to calculate a member’s pensionable pay, even if contributions have been deducted.

The Pension Section should be informed of any adjustments made. The calculations will also need to be attached to the monthly pension contributions return.

Any retrospective payments that come within the definition of pensionable pay must have the relevant employees and employer contributions paid on them.

If more pensionable payments are made after termination of Scheme membership in a job and after data has already been submitted to the pension fund administering authority, the revised data (if the payment is made in the year of leaving) or new data (if the payment is made in a year after leaving) should be submitted to Leicestershire County Council Pensions together with the date the additional payment was made.
 
The additional pension derived from a retrospective payment made after leaving (e.g. from a backdated pay award or backdated re-grading) is treated as if it were received on the day before the active member left and the pension in the account is retrospectively recalculated which, for a pension already in payment, would require LCC Pensions to calculate and pay any arrears due.

Note that if the member has pre 1 April 2014 membership the retrospective pay will result in a recalculation of the final year’s pensionable pay and any pension already paid in respect of the pre 2014 membership will need to be recalculated and, consequently, arrears of pension paid.

Employers should pay contributions to Leicestershire County Council before the 8th working day of each month. Every month, a breakdown of the amount paid is required, detailing the employee, employer and additional contributions elements of the payment. Total amounts are sufficient for each monthly breakdown. This should be emailed to the Investments Team.

ARCs, Added Years and APCs should be stated separately from each other and standard contributions on the monthly contributions return. This is because they do not attract a contribution from the employer. AVCs are not required on the monthly contributions return as these are paid to Prudential not the Pension Fund.