Employer

Responsibilities

We need accurate, timely information to administer the London Borough of Southwark Pension Fund (the Fund) successfully and make sure we comply with pensions law.

Each employer is responsible for their scheme’s funding. Employer contributions vary, depending on the underlying funding position of the employer. Employers should be aware that certain decisions, for example pay awards or ill-health pensions, will affect their long-term pension funding and the cost of taking part in the Fund. Our actuary carries out a formal ‘valuation’ (a financial check) of the Fund every three years and recommends the employers’ contribution payable for the next three-year period.

By law, each employer must supply any information needed by Southwark Pension Services to carry out its legal duties. You may face penalties if you don’t meet these requirements. Read the Pension Administration Strategy (PAS) which gives you full details of the LGPS administration duties that are required of you as an employer in the Fund.

Southwark Pension Services may also fine an employer if it feels that the employer has cost them extra money by failing to meet its responsibilities. This particularly applies where employers have not provided information as we outline above.

Employer’s responsibilities include:

  • Deal with LGPS joiners and leavers;
  • Work out which employees qualify for membership and enrol them automatically when appropriate;
  • Ask new members for documents about previous pensions, unless Southwark Pension Services already have these;
  • Work out members’ pensionable pay and contribution rate;
  • Deal with members applying to join the 50/50 section of the LGPS;
  • Take the correct employee and employer contributions from members’ salaries and pay these to the Fund;
  • Refund contributions through payroll for any member who opts out within three months of joining;
  • Set up and manage a Shared Cost Additional Voluntary Contribution (SCAVC) arrangement if suitable;
  • Deal with members applying to pay additional pension contributions (APCs) or buy back pension they’ve lost through absence and tell Southwark Pension Services;
  • Take any additional voluntary contributions (AVCs) from salaries and pay to the relevant provider;
  • Keep up to 13 years’ pay records to work out final pay correctly;
  • Work out final pensionable pay;
  • Provide information for bulk transfers;
  • Develop policies on how to take certain actions and decisions, then review these as appropriate;
  • Make suitable decisions where there isn’t a published policy;
  • Consider whether to pay a contribution to the Fund if the pension of an active member needs to increase;
  • Decide which benefits members are entitled to;
  • Establish whether a member qualifies for a particular benefit on leaving;
  • Arrange for an independent doctor’s opinion about whether a member can retire on grounds of ill-health;
  • Review Tier 3 ill-health awards and tell Southwark Pension Services the outcome;
  • Deal with members applying for early retirement and working out any reduction to their benefits;
  • Pay any costs arising from these duties into the Fund;
  • Address any issue where a member may have to give up or lose any benefits;
  • Deal with deferred members applying for early retirement based on the rules at the time they left; and
  • Set employee contributions, tell employees the bands they are in and appoint someone to hear any appeals.

If an employer does not supply timely, accurate information to the Fund, it could have a major impact. For example, the Fund may:

  • Pay the wrong benefits to a member; or
  • Fail to meet its legal duties.

Or members may:

  • Receive and rely on incorrect figures in their benefit statements;
  • Receive the wrong benefits; or
  • Have to pay unexpected tax charges.

If you need more information on your responsibilities, please contact us.

You need to tell the Fund about each member of staff joining it, even if they opt-out within three months of joining. If a member has more than one job, you must complete a separate form for each job. Post the completed form to Southwark Pension Services within 20 days of the employee joining the LGPS.

Do not delay completing this form – please send it to Southwark Pensions Services as soon as possible.

The Fund must write to the new member with details of their membership .

We will ask you to complete a detailed electronic year-end return at the end of each LGPS year (1 April to 31 March). This is a legal requirement.

You must send this back to the Fund by the 30 April after the year-end.

We use the information you send to update members’ benefits. So, it is vital that the information is accurate and matches the payments made on the Monthly Contribution Remittance. If any errors arise, you will need to correct them and send the updated information back to the Fund so that member records stay accurate. If you don’t correct them, this could affect your future employer contribution rates and result in your members receiving incorrect benefit estimates.