TEMPLETON HOUSE, 411 HOLYWOOD ROAD, BELFAST, BT4 2LP
Telephone: 028 9076 8025 Website: www.nilgosc.org.uk
2 July 2007 Circular 04/2007
To: Salaries & Wages Officers
All Employing Authorities
Dear Colleagues
Re: Advance notice of
retrospective amendments to LGPS (NI)
AVC Contribution limit
of 50% of remuneration
1. Advance Notice – AVC
Contribution limit of 50% of remuneration
In a previous circular (03/2007) and in the Members’ News, issued to all our members in November, I indicated that an amendment was expected to restrict the amount of contributions which could be invested within Additional Voluntary Contributions. These retrospective regulations have now been made in England and Wales; The Local Government Pension Scheme (Amendment) (No, 2) Regulations 2007.
The Department of Environment has confirmed that it intends making similar amendments to the Northern Ireland Local Government Pension Scheme Regulations and that these amendments will be retrospective to the same effective dates as now apply in England and Wales. The amendments are planned to be made by October 2007 and the Department will, in the interim, provide the Committee with powers to anticipate the English Regulations until the appropriate legislation is made in Northern Ireland. NILGOSC expects to receive these powers shortly.
These regulations restrict the amount of AVCs that a scheme member may pay to 50% of remuneration and the change applies retrospectively to 6 April 2007. The regulations also require that AVC contributions have to be deducted from pay i.e. members may not make contributions by cheque to the in-house AVC provider. The policy intention is that the change applies to all members, irrespective of when they started paying AVCs.
Any payments made in the 2006/07 year are unaffected and no adjustment is necessary in respect of them.
However, any payments in excess of 50% of remuneration already made in April, May and June 2007 will require adjustment by reducing contributions over the next 9 months. If this is not sufficient to reduce the contributions below 50% of annual remuneration Prudential will have to refund some of the contributions.
From July it is recommended that AVC contributions should not exceed 50% of pay in each month.
Employing Authorities will need to limit members to 50% of pay to AVCs through payroll. I will write to all individual Prudential AVC contributors once the Department has given the Committee powers to anticipate the English Regulations.
Yours sincerely,
Zena Kee (Mrs)
Pensions Manager