## London Borough Of Bexley Augmentation Of Local Government Pension Scheme Service Hr Service March 2007 (Updated August 2009)

AUGMENTATION OF LOCAL GOVERNMENT PENSION SCHEME SERVICE 
1. 
Introduction 
 
This document is intended to provide practical guidance for Directors and HR 
Advisers in preparing a request for the augmentation of Local Government Pension Scheme service and seeking agreement to such a request. Whilst this document primarily deals with a request for augmentation of Local Government Pension Scheme service on termination of employment, the guidance and request form can be adapted appropriately for requests for other reasons (ie.at 
recruitment or as a retention measure). 2. 
The Council's Policy Pensions Committee agreed the Council's Augmentation policy in November 2006. This gives the Director of Finance, in consultation with the relevant Director, authority 
to agree to augment pensionable service as follows: 
For new Scheme Members 
- Only where exceptional difficulties are 
experienced in recruiting staff 
As a retention Measure 
- 
During 
times 
of 
uncertainty 
or 
reorganisation; and - Where a valuable worker on a key project 
needs to be retained who might otherwise leave; and - Where retention of the employee would ensure stability in times of a reducing workforce 
 
On termination of Employment 
- Only where there is clear financial and operational advantage to the Council or compassionate grounds are appropriate. 
Cases will be determined on a case-by-case basis, depending upon the individual circumstances, up to a maximum of 5 additional years. Posts subject to Member level appointment must be considered by General 
Purposes Committee in consultation with the Chairman of Pensions Committee. 3. 
Funding The Regulations state that the cost of augmentation will be borne by the Council and 
not by the pension fund.  The full cost of the additional pension will therefore be funded by the relevant staffing budget. 

## The Staffing Budget Will Make An Immediate One-Off Lump Sum To The Pension Fund To Cover The Additional Pension Lump Sum And An Appropriate Annual Contribution To Cover The Additional Annual Pension For The Lifetime Of The Pension. 4. Monitoring Details Of Any Requests For Augmentation Will Be Provided On An Annual Basis To Pensions Committee As Part Of The Report On The Numbers, Costs And Savings Of Early Terminations. 5. How A Request For Augmentation Is Likely To Be Triggered The Guidance That Follows Is In Respect Of A Request To Augment Local Government Pension Scheme Service On Termination Of Employment But May Be Adapted Appropriately For Requests For Other Reasons. A Request May Arise From Either The Employee Or The Manager.  Possible Triggers Might Be: Employee - May Wish To Volunteer To Leave But Is Just Short Of Service To Receive Unreduced Pension - May Be Under Notice Of Redundancy And Would Wish To Use His/Her Severance Payment To Purchase Augmentation Instead

Employer 
- may wish to facilitate a request by the employee for 
particular 
reasons 
eg. 
to 
aid 
organisational 
efficiencies 
 
- May wish to suggest augmentation if it would facilitate 
an agreed termination that may not otherwise be possible 
 

 6. 

Relationship with the Council's Financial Terms for Redundancy and Early Termination The Council's financial terms currently provide a severance payment to qualifying employees on termination of employment for reasons of redundancy or on the grounds of the efficient exercise of the Authority's functions. The relevant Regulations do not permit an employee who has been awarded augmented service to also receive a severance payment.  Therefore it is not possible to receive both a severance payment and augmented service. As severance is paid as part of a standard package of benefits it is not expected that consideration will be given to augmenting service in many cases.  If it is considered it will replace any severance payment that the employee would otherwise be eligible for.   

 
7. 
When a decision should be taken The Regulations allow a decision to be taken at any time, which does allow time for 
the decision making process to commence in good time before the termination is effective. In any event, a decision must be taken prior to termination if the employee would otherwise be eligible for a severance payment.  This would prevent a severance payment being made in error. 8. 
Procedure 
 
Whether triggered by the employee or the manager, it is the relevant Director that 
must put a case for consideration to the Director of Finance.   Whilst each case will be different, information to support the case is likely to include: 
- The reason for the request - The amount of augmentation requested and how this affects the employees 
pension benefits 
- An estimate of the costs of the increased pension - this should be requested 
via TOPS (Pensions). 
- The financial and organisational benefits to the Council of agreeing to the 
request - this must be supported by calculations from the relevant Finance Manager.  
- The skills and experience that the employee has brought to the Council 
- The benefits that the employee would otherwise be eligible for under the 
Council's financial terms (if applicable) 
- Any other information that should be taken into consideration 
 
A request/authorisation form is attached for this purpose. 9. 
The Director of Finance Decision The Director of Finance will consider each request on a case-by-case basis. A decision whether to grant augmentation, and the amount awarded, will take into account the information provided in the request plus: 
- Whether the employee has volunteered to leave the Council 
- The commitment and experience the employee has given to the Council and 
over what period of time  
- The value to the organisation of releasing the individual under these terms, for 
example, whether a voluntary retirement with augmentation would avoid the need for compulsory redundancies at a later date and therefore assist organisational change and reduce future costs 
- The additional cost to the Council compared with the costs that would be 
incurred if any other benefits would have applied 
- Whether the amount of augmentation requested is appropriate 
 Care will be taken to ensure that application of this policy does not fall foul of antidiscrimination legislation. 

 
The Director of Finance will complete the authorisation form either agreeing to the request or giving his reasons for refusal. 

REQUEST/ AUTHORISATION FOR CONSIDERATION TO AUGMENT LOCAL GOVERNMENT PENSION SCHEME SERVICE ON TERMINATION OF EMPLOYMENT This form is to be used to request/agree augmentation of pensionable service by the Director of Finance, in consultation with the relevant Director, under delegated powers. (Non-Member level appointments only). 

EMPLOYEE DETAILS 
 
The amount of augmentation requested and the effect on the employees pension benefits: 

 

An estimate of the costs of the increased pension: (to be provided by LPFA via TOPS (Pensions)) The lump sum and annual costs should be shown separately. 

 
The financial and organisational benefits to the Council of agreeing to the request: (supporting papers attached) 
The skills and experience that the employee has brought to the Council: 
The benefits that the employee would otherwise be eligible for under the Council's financial terms (if applicable): 
Any other information that should be taken into consideration: 

 
DECISION   
 
To be signed by the relevant Director and the Director of Finance ONLY Under delegated powers I agree to award ____________ augmented Local Government Pension Service to the above named employee. I confirm that the cost of this additional service will be borne by the relevant staffing budget and not the Local Government Pension Scheme. Signed: _______________________________  Date: _______________ Relevant Director Signed: _______________________________  Date: _______________ 
Director of Finance 
 
OR Following careful consideration of this request, I have decided not to award augmented service in this case. In summary, the reason for my decision is:_______________________________ Signed: _______________________________  Date: _______________ Director of Finance 

## 

REQUEST/ AUTHORISATION FOR CONSIDERATION TO AUGMENT 
LOCAL GOVERNMENT PENSION SCHEME SERVICE ON 
TERMINATION OF EMPLOYMENT 
 
SUPPORTING PAPERWORK: DECISION SHEET 
(FOR THE USE OF THE DIRECTOR OF FINANCE) 
Employee Name:  
Designation: 
Has the employee volunteered to leave the Council? (or would agreement lead to 
volunteering)? 
 
 
What commitment and experience has the employee given the Council and over what period of time? 
 
 
What is the value to the 
organisation of releasing the employee under these terms? Eg. would this voluntary retirement with augmentation avoid the need for compulsory redundancies at a later date? 
 
 
Are there additional costs to the Council compared with other benefits that might apply (eg. severance)? 
 
 
What are the implications to the Council if the employee is refused augmentation?  (eg. will they still volunteer to go?  If they would not, does this cause the Council any difficulties? 
 
If I agree that the case warrants consideration of augmentation, is the amount of augmentation requested appropriate? 
 
Any additional considerations?