The Local Government Pension Scheme Regulations (Northern Ireland) 2014

Special circumstances where revised actuarial valuations and certificates shall be obtained N.I.

70.—(1) If a contributing body—

(a) ceases to be an employing authority (including ceasing to be an admission body participating in the Scheme), or

(b) was an employing authority, but no longer has an active member contributing to a pension fund,

that contributing body becomes “an exiting employer” for the purposes of this regulation.

(2) When a contributing body becomes an exiting employer, the Committee shall obtain—

(a) subject to paragraphs (5) and (6), an actuarial valuation determined by an actuary appointed by the Committee at the exit date of the liabilities of the pension fund in respect of benefits in respect of the exiting employer's current and former employees and any inherited liabilities;

(b) an exit certificate showing any exit payment due from the exiting employer or any surplus due to the exiting employer from the pension fund in respect of those benefits as calculated by an actuary appointed by the Committee, on a basis consistent with the actuarial valuation in paragraph (a); and

(c) where relevant, a revised rates and adjustments certificate to reflect the certificate produced pursuant to paragraph (b).

[F1 (2A) The Department, subject to such conditions as it considers appropriate, may approve the issue of an interim exit certificate by the Committee under paragraph (2) to be replaced by an exit certificate at a later date.

(2B) Any payments made by an exiting employer on the basis of an interim exit certificate under paragraph (2A) does not count as an exit payment for the purposes of paragraph (9).]

(3) An amount equal to any exit payment shall immediately become due from that exiting employer to the pension fund and shall be payable as a lump sum within one month of the date of the exit certificate or such longer period as the Committee and the exiting employer agree, regardless of whether or not there has been any revision of the rates and adjustments certificate after the exit date.

(4) An amount equal to any surplus due to the exiting employer shall be payable by the Committee as a lump sum within one month of the date of the exit certificate or such longer period as the Committee and the exiting employer agree, regardless of whether or not there has been any revision of the rates and adjustments certificate after the exit date.

(5) Where in respect of an exiting employer its entire liabilities to the pension fund in respect of benefits due to the exiting employer's current and former employees and any inherited liabilities attributable to it, have transferred and become attributable to another person in accordance with regulation 71, paragraphs (2)(a) and (b) shall be modified so that no actuarial valuation needs to be carried out in respect of the exiting employer and the exit debt shall be zero.

(6) Where in respect of an exiting employer, part but not all of its liabilities to the pension fund have been transferred and become attributable to another person in accordance with regulation 71, paragraphs (2)(a) and (b) shall be modified so that the reference to liabilities of the pension fund in respect of benefits due to the exiting employer's current and former employees and any inherited liabilities shall exclude any part of such liabilities which have transferred to and become attributable to the other person under regulation 71, and the exit payment shall be calculated accordingly.

(7) Where for any reason it is not possible to obtain all or part of the exit payment due from the exiting employer, or from an insurer, or any person providing an indemnity, bond or guarantee on behalf of that exiting employer, the Committee shall obtain a further revision of any rates and adjustments certificate for the pension fund showing—

(a) in the case where the exiting employer is an admission body falling within paragraph 116(1)(h)(i) of Part 1 of Schedule 2 to these Regulations (admission agreements with admission bodies: bodies providing services as a result of transfer of a service), the revised contribution due from the body which is the related employer in relation to that admission body; and

(b) in any other case, the revised contributions due from each employing authority which contributes to the pension fund,

with a view to providing that assets equivalent to the exit payment due from the exiting employer are provided to the pension fund over such period of time as the Committee considers reasonable.

(8) Where in the opinion of the Committee there are circumstances which make it likely that an employing authority (including an admission body) will become an exiting employer, the Committee may obtain from an actuary a certificate specifying the percentage or amount by which, in the actuary's opinion—

(a) the contribution at the common rate of employers' contribution should be adjusted; or

(b) any prior individual adjustment should be increased or reduced,

with a view to providing that assets equivalent to the exit payment that will be due from the employing authority are provided to the pension fund by the likely exit date or, where the employing authority is unable to meet that liability by that date, over such period of time thereafter as the Committee considers reasonable.

(9) When an exiting employer has paid an exit payment into the pension fund, no further payments are due from that exiting employer in respect of any liabilities relating to the benefits in respect of any current or former employees of that exiting employer as a result of these Regulations.

(10) Paragraph (11) applies where—

(a) an employing authority agrees to pay increased contributions to meet the cost of an award of additional pension under regulation 32 (award of additional pension); or

(b) it appears likely to the Committee that the amount of the liabilities arising or likely to arise in respect of members in employment with an employing authority exceeds the amount specified, or likely as a result of the assumptions stated, for that employing authority, in a rates and adjustments certificate by virtue of regulation 68(9) (actuarial valuations and certificates, [F2 assumptions); or] .

[F3 (c) a contributing body has previously ceased to employ active members and no actuarial valuation or rates and adjustments certificate has been obtained by the Committee in accordance with paragraph (12) but where the admission agreement still allows it to employ active members and it once again starts to employ active members.]

(11) The Committee shall obtain a revision of the rates and adjustments certificate concerned, showing the resulting changes as respects that employing authority.

(12) Where a contributing body becomes an exiting employer the Committee may, with the approval of the Department, defer obtaining an actuarial valuation and exit certificate under paragraph (2) and determine the date at which the actuarial valuation and exit certificate shall be obtained and the dates from which it will be effective, and paragraph (2) will be modified to the extent necessary so that it applies as if the contributing body became an exiting employer on such date as is determined by the Committee in accordance with this regulation.

[F4 (12A) Where in the opinion of the Committee there is a material change in circumstances of an employing authority, the Committee may, with the approval of the Department, vary the date at which an actuarial valuation and exit certificate is determined under paragraph (12).]

(13) During any period of deferral under paragraph (12) the exiting employer will continue to pay contributions under regulation 73 (contributing body's contributions) in respect of liabilities of the pension fund relating to benefits due to the exiting employer's current and former employees and any inherited liabilities which it may have (but excluding any part of such liabilities which have transferred to and become attributable to the other person under regulation 71 (apportionment of liabilities)) and the contributions shall be calculated by the actuary taking account of the amount of those liabilities and the period of deferral.

[F5 (13A) The Committee may determine a nominated calculation date, where it reasonably believes that a contributing body is to cease to employ active members in the near future but the actual calculation date is unknown, and such date will be the calculation date in substitution for the actual date on which the contributing body ceases to employ active members or its admission agreement otherwise ceases to have effect.

(13B) Where paragraph (13A) applies, the Committee—

(a) will assess on or as soon as practicable after the date on which the contributing body actually ceases to employ active members or it admission agreement otherwise ceases to have effect whether it should obtain a further revision of the rates and adjustments certificate under regulation 70(2)(c) as at that date; and

(b) may subsequently ask the fund actuary to revise or withdraw and re-issue the rates adjustments certificate if it considers it reasonable to do so.

(13C) Where a revised rates and adjustments certificate is obtained under paragraph (13B)(a), it will take account of any contributions already received from the contributing body further to the rates and adjustments certificate obtained under paragraph (13A).

(13D) The Committee may, with the approval of the Department, if it thinks necessary to protect the solvency of the fund or prevent liabilities in relation to one contributing body falling onto other contributing bodies, require active members employed by a particular contributing body to cease future accrual with effect from a date specified by the Committee so that the contributing body no longer employs active members.]

[F6 (13E) Where in the opinion of the Committee there has been a relevant change in the circumstances of an employing authority (including an admission body), the Committee may with the agreement of the employing authority obtain from an actuary a certificate specifying the percentage or amount by which in the actuary's opinion it is appropriate that:

(a) the contribution at the common rate of employer's contribution should be adjusted; or

(b) any individual adjustment should be made or any prior individual adjustment should be increased or reduced in respect of that employing authority.

(13F) Where the actuary is producing a certificate under paragraph (13E), the actuary shall take into account the current version of the Committee's funding strategy statement and any other matter which the actuary considers relevant.

(13G) A relevant change in circumstances for the purpose of paragraph (13E) includes any one or more of the following:

(a) the employing authority, since the date of the existing rates and adjustments certificate, has secured a guarantee in a form satisfactory to the Committee of its entire liabilities to the pension fund from a Department which is established by or under any enactment and where that enactment enables the Department to make financial provision for that employing authority;

(b) the employing authority, since the date of the existing rates and adjustments certificate, has provided security, in a legally binding form satisfactory to the Committee, for its entire liabilities to the pension fund;

(c) an assessment carried out to the satisfaction of the Committee and taking account of actuarial advice, of the level of risk arising on the premature termination of the provision of service or assets by reason of insolvency, winding up or liquidation of the admission body demonstrates that the risk has reduced significantly since the existing certificate was issued;

(d) at the time that the existing rates and adjustments certificate was obtained there were circumstances which in the opinion of the Committee made it likely that the employing authority would become an exiting employer but there has been a change in those circumstances so that in the opinion of the Committee it is likely that the employing authority's participation in the scheme will be indefinite; or

(e) there was an error and/or omission in the information provided to the actuary for the purposes of calculating the existing rates and adjustment certificate, which in the opinion of the actuary has had a significant impact upon the contributions certified for that employing authority, or where there has been a substantive or typographical error in the existing rates and adjustments certificate.]

(14) For the purposes of this regulation—

“exit certificate” means a certificate produced in accordance with paragraph (2);

“exit date” means the date on which the employer becomes an exiting employer;

“exit payment” means the amount specified in an exit certificate as being due from an exiting employer in accordance with this regulation;

“exiting employer” means an employer of any of the descriptions specified in paragraph (1); F7 ...

[F8 “interim exit certificate” means a certificate produced in accordance with paragraph (2A); and]

“related employer” means any employing authority or other such contracting body which is a party to the admission agreement (other than the Committee).

Textual Amendments

F1 Reg. 70(2A)(2B) inserted (with effect in accordance with reg. 1(1) of the amending Rule) by The Local Government Pension Scheme (Amendment) Regulations (Northern Ireland) 2022 (S.R. 2022/163), regs. 1(1), 10(a)

F2 Words in reg. 70(10)(b) substituted (with effect in accordance with reg. 1(2) of the amending Rule) by The Local Government Pension Scheme (Amendment) Regulations (Northern Ireland) 2016 (S.R. 2016/128), regs. 1(1), 19(a)(i)

F3 Reg. 70(10)(c) inserted (with effect in accordance with reg. 1(2) of the amending Rule) by The Local Government Pension Scheme (Amendment) Regulations (Northern Ireland) 2016 (S.R. 2016/128), regs. 1(1), 19(a)(ii)

F4 Reg. 70(12A) inserted (18.11.2019) by The Local Government Pension Scheme (Amendment) Regulations (Northern Ireland) 2019 (S.R. 2019/206), regs. 1(1), 73(a)

F5 Reg. 70(13A)-(13D) inserted (with effect in accordance with reg. 1(2) of the amending Rule) by The Local Government Pension Scheme (Amendment) Regulations (Northern Ireland) 2016 (S.R. 2016/128), regs. 1(1), 19(b)

F6 Reg. 70(13E)-(13G) inserted (18.11.2019) by The Local Government Pension Scheme (Amendment) Regulations (Northern Ireland) 2019 (S.R. 2019/206), regs. 1(1), 73(b)

F7 Word in reg. 70(14) omitted (with effect in accordance with reg. 1(1) of the amending Rule) by virtue of The Local Government Pension Scheme (Amendment) Regulations (Northern Ireland) 2022 (S.R. 2022/163), regs. 1(1), 10(b)(i)

F8 Words in reg. 70(14) inserted (with effect in accordance with reg. 1(1) of the amending Rule) by The Local Government Pension Scheme (Amendment) Regulations (Northern Ireland) 2022 (S.R. 2022/163), regs. 1(1), 10(b)(ii)