Discretions policy
Under LGPS regulations, an employer must have a discretions policy. This policy must be kept under review. Where changes are made, members must be given one month’s notice of the change. The regulations also state you should be mindful and consider if exercising a discretion could lead to a serious loss of confidence in the public service.
The full list of employer discretions can be found on the LGPS regulations and guidance website. You'll see that some discretions are mandatory and must be included in your policy. Others are optional, although we recommend you also include them.
Please be aware some discretions will also need our agreement. Please contact us if you wish to use one of them. How we use our discretions as an administering authority, is included in our governance compliance statement.
Key points to think about when making your policy
The LGPS regulations state that a policy must be completed, approved (by the appointed person/people in your organisation), and published. When the policy is published, it must be made available to your members and the public. You must send us a copy of your discretion policy, and if you make changes, send the revised copy within one month of implementation.
You can apply discretions to certain groups, posts, all members or on a case by case basis. But, whatever you decide, this must be in your policy. You should always be mindful of discrimination laws if you're applying discretions to certain people/groups.
If you're considering exercising a discretion that may incur a charge, you should contact us first to find out the cost. This cost will then be re-charged to you.
Transfer of previous pension rights
All LGPS members can transfer in pension benefits from elsewhere within twelve months from starting in their job. We ask members to include information about previous pension benefits on their new member form, so we can tell them about their options before this time limit expires.
A member wishing to transfer in benefits outside of the twelve-month time limit, can still do so but they must ask for your permission for the transfer to take place. Both you as the employer, and the pension fund as the administering authority must agree to the transfer. You should therefore contact us if you get a request.
For us to agree a transfer, we must be assured that you have exercised your discretion in line with your policy (if one has been made). We also need to make sure that you are aware of the potential financial implications of allowing the transfer.
Although the discretion on transfers in (out of the twelve months) is not mandatory, we'd advise that you include this in your policy as it's one of the most frequently requested uses of an employer discretion.
Our policy on supporting transfer in requests can be found in the governance compliance statement.
Need help writing your discretions policy?
Creating a discretions policy is a complex process. So, to help you along we've purchased a template.
Our template includes all mandatory and optional discretions, and gives example wording as to how you may wish to exercise the discretions. This document not only saves you time, but also makes sure that you're compliant with the regulations.
Please contact us if you'd like a copy of the template. You must not share the template with any third parties
