8. COVID-19 - LGPS information for employers

The government has released new guidance for Local Government Pension Scheme (LGPS) administration due to the COVID-19 pandemic. The purpose of this guide is to provide employers with a summary of the key directives and clarify the fund’s position on any recommended discretions.

You may receive questions from members concerned about their financial situation and the impact of the crisis on their pension. Please refer them to our website where we will be publishing specific guidance for members.


Prioritising services

As COVID-19 has led to increased staff shortages due to factors such as sickness, and the Government’s COVID-19 response plan, administering authorities have been advised to prioritise paying benefits, and processing retirements and deaths. We are following this guidance. This does mean, that it may take us longer to deal with work relating to areas not considered a priority. We appreciate your understanding and patience at this difficult time.

The Pension’s Regulator has asked employers to focus on providing leaver and pay information for retirements, pay information for any death in service and paying over employee and employer contributions.


Contributions and other payments

The regulations state that employer contributions must continue to be paid (as per the individual employer contribution rate) to the Administering Authority (AA) in line with the usual timescales.

We have made no amendment to our discretionary policy or funding strategy statement at this time, and expect payment of all other invoiced items, such as pension strain, to be paid as per the usual timescale.

Contact us as soon as possible if you anticipate any delays.


Submission timescales

The government has not yet issued any extension on statutory pension deadlines; therefore, we continue to expect the delivery of information, such as the monthly and year end returns to be received within the usual timescale.

We understand that you may be experiencing added pressures at this time and may also need to prioritise workflow. Communication and transparency are crucial to enable us to support each other. If you anticipate any delays to the timescales agreed in the service level agreement, contact your Employer Liaison Officer (ELO) as soon as possible.


Electronic communications

Help us to minimise delays and time spent by staff in the office by ensuring that, where possible, all communication is sent to us electronically.

The government recently confirmed that electronic signatures are as reliable as wet ink signatures, and all our pdf forms are fully editable.

If you are not yet using i-Connect to provide us with pension information, you are missing an opportunity to decrease your workload and paperwork. We are still supporting employers to set up this invaluable resource. Contact us to find out more.


Furloughed staff

Employees paid under the government’s COVID-19 job retention scheme (CJRS) are known as furloughed staff. The government recently announced it would be extending this scheme until September 2021. The government previously announced that it intended to replace CJRS with the Job Support Scheme and the Job Retention bonus, but this has been delayed due to the extension of CJRS.

Employees qualifying for furlough will receive 80% of their wages (from 1 November 2020 to 30 June 2021), paid for by the government, up to the value of £2,500 a month for the qualifying period. The employer can choose to top up the value to 100% of the employee’s usual wages. After 1 July 2021, the amount you can claim will reduce and you will need to top up your employee’s wages. 

Contact your Employer Liaison Officer if any of your staff paying into the LGPS have been furloughed.

Here are the key points to consider when dealing with furloughed employees in relation to LGPS administration:

  • Furloughed pay is pensionable; therefore, employee and employer contributions should be deducted based on the employee’s actual pay. No Assumed Pensionable Pay (APP) should be applied. If the employee receives only 80% of their pay, their pension contributions, and correspondingly, their pension build-up, will be less than if they had continued to receive 100% of pay. The member can choose to pay Additional Pension Contributions (APC) to make up for the loss. The employer can choose to contribute towards this, but there is no obligation to do so. Before 1 August 2020, employers could reclaim the cost of employer contributions up to 3% but are unable to reclaim these after this date.
  • The employer must continue to pay contributions to the AA as per the employer contribution rates tables on the pensionable pay which includes any amount funded by CJRS.
  • If a member’s final pay calculation is reduced due to furloughed pay, we will require three separate final pay calculations in respect of the three years prior to the last day of service. We will use the highest of these three figures in our assessment of pension benefits. All members are entitled to this provision. Furloughed employees will not qualify for a 3 in 10 final pay calculation. Please indicate to us where an employee’s pay has reduced due to being furloughed so that we can assess their pension entitlement accurately and save you the trouble of supplying us with information we don’t need.
  • The government has specified that all furlough pay must be paid to employees in the form of money. Salary sacrifice schemes should not be deducted from the grant. Where the employer provides benefits to furloughed employees through a salary sacrifice scheme, these benefits should be in addition to the furlough pay.
  • Furloughed workers on parental related leave are entitled to the usual associated paid leave.
  • If furlough pay forms all or part of a member’s pensionable pay, it should be used to determine the employee contribution rate at reviews. The employer can set the band in April and choose to keep it in place until 31 March of the following year; however, the regulations also allow for review mid-year if, during the year, there are changes to employment, or a material change to income.
  • If a member who has been furloughed, retires due to ill-health, you need to provide us with an Assumed Pensionable Pay figure (APP). The regulations advise that you can calculate the APP using a higher pay figure to reflect the pensionable pay the member would normally have received had they not been furloughed.
  • If a furloughed member dies in service, and their pay has been reduced, the regulations advise that the employer can calculate the APP for the death grant using a higher pay figure to reflect the pensionable pay the member would normally have received.
  • Employers can decide to end the furlough at any time and bring employees back to work.
  • If a member on furlough has their contractual hours reduced, the hours used for the calculation of final pay should include any hours subsidised by the wage support scheme.


Summary of important dates for CJRS

1 July 2020

Employers were able to bring back previously furloughed employees on a part-time basis (flexible furlough).

1 August 2020

A new taper began to operate. Employers required to meet part of the salary and other costs previously provided by the scheme. Previously, employers were able to reclaim up to 3% of pension contributions back from the government, they were no longer be able to do so.

1 September 2020

Government grant towards employee wages reduced to 70%.

1 October 2020

Government grant towards employee wages reduced to 60%.

1 November 2020

Government grant towards employee wages increased to 80% up to the value of £2,500 per month. Employer’s to pay NICs and pension contributions.

1 July 2021

The amount an employer can claim through CJRS will reduce. You'll also need to make a contribution to your employee’s wages.

Please refer to government guidance for more information about these changes to CJRS.

1 October 2021

CJRS will close.

Refer to government’s CJRS guidance for further information.


Secondment for active members

Where a member of staff has been seconded under the government’s plan for emergency staffing to the NHS, they will still be paid their usual wage; therefore, their pension contributions should continue as before.


Deferred and pensioner members returning to work as emergency staffing

Deferred or pensioner members returning to paid work as part of the government’s plan for emergency staffing, should be given access to the LGPS where they qualify for it. In the case of pension abatement, the fund’s policy continues to apply.

However, we will also apply the government stipulation that no worker should be penalised for helping with the COVID-19 effort.   


Emergency Voluntary Leave (EVL)

Any member on EVL, should not lose out on pension build-up if they have temporarily left the post to volunteer in the health and social care sectors to support the COVID-19 effort.

APP should be added to the Cumulative Pensionable Pay (CPP) for pension purposes. Employer pension contributions should be based on the APP.

Employee pension contributions should only be paid on any actual pay the employee receives during the period. When submitting information to us, please advise us if a member has received APP due to EVL.


Reserve Forces Leave

If an employee is called away from their usual work on Reserve Forces Leave (RFL) as part of the Government’s plan to tackle COVID-19, the employee will have the choice to leave or remain in the LGPS.

For those that choose to remain, the employee and employer contributions should be based on APP. The employer should notify the MOD of the APP figure, as well as the contributions payable. It would then be the MOD’s responsibility to pay all contributions to the AA.

If the employer makes any payment to the member during the period of leave, it would not be pensionable.


Progressing ill health retirements

It is expected that ill-health retirements should progress as usual during the COVID-19 crisis. Delays in obtaining the IRMPs report could affect the date a post-2014 deferred pension is paid on the grounds of ill health, as well as the date a tier 3 pension is upgraded to tier 2.

Therefore, you should ask the IRMP to include any information in their report about delays caused by the crisis and should consider this in the member’s application.

Though furlough is not to be used for short term sick leave, if a current employee’s long-term sick pay is coming to the end, you could consider whether they would qualify for the CJRS. For further information, see the LGA’s advice on eligibility.


Contacting your Employer Liaison Officer (ELO)

Although face to face meetings are on hold for the time being, our ELOs are still available to answer queries and can also offer meetings via Microsoft Teams.

More information about employment issues related to the pandemic can be found on the LGA’s COVID-19 employment Law FAQs.


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Last updated: 7 June 2021

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