# The Local Government Pension Scheme (Amendment) Regulations (Northern Ireland) 2023, Note: Explanatory note

Extent: N.I.

(This note is not part of the Regulations)
The Local Government Pension Scheme Regulations (Northern Ireland) 2014 (“the 2014 Regulations”) established the Local Government Pension Scheme (“the Scheme”) as a career average revalued earnings scheme in accordance with section 8(2)(a) of the Public Service Pensions Act (Northern Ireland) 2014 (“the Act”).
According to section 8(4) of the Act, a person’s pensionable earnings under a career average revalued earnings scheme must be revalued each year until the person leaves pensionable service, based upon the index rate adjustment for the relevant period specified in an Order made by the Department of Finance under section 9(2) of the Act.
Section 3(3)(b) of the Act provides that scheme regulations may make retrospective provision. The regulations listed in regulation 1(2) are retrospective. The retrospective provisions contained in these Regulations do not appear to the Department to have significant adverse effects in relation to the pension payable to or in respect of members of the scheme, or members of previous schemes. Accordingly, the procedures set out in section 23 of the Act are not applicable in relation to these Regulations.
These Regulations amend the provisions of the 2014 Regulations in relation to the process of making revaluation adjustments which currently require the revaluation adjustment to be made at the beginning of the Scheme year, meaning that on 1 April each year, members’ pensions are revalued to take account of the impact of inflation over the previous scheme year (1 April to 31 March). Currently, tax liabilities may arise because the timing of the Scheme revaluation process on 1 April is not aligned with HMRC’s process for assessing the annual allowance tax charge under the Finance Act 2004.
The overall effect of the changes made by these Regulations to the 2014 Regulations is that the revaluation adjustment is made on 6 April each year, so that the Scheme revaluation is brought into alignment with the HMRC process for assessing the annual allowance tax charge and then applied to the member’s account and accounted for when calculating the end of year balance on 31 March. These Regulations will have no effect on the amount of Scheme benefits to which members are entitled.
Regulation 3 amends regulations 25, 26, 27 and regulation 29 of the 2014 Regulations in relation to active members and members who change status within a Scheme year by becoming deferred members of the Scheme, or by taking full or flexible retirement.
The amendments specify that the revaluation adjustment made to the member’s pension account must take place on the ‘revaluation date’ (defined as being 6 April). This change means that the inflation figure used for the revaluation adjustment in the tax year commencing 6th April is the same as the inflation figure used for any tax calculation specified by HMRC for annual allowance purposes, under the Finance Act 2004.
Regulation 3 also makes consequential changes to the 2014 Regulations, to ensure that the correct figures are used and the index rate adjustment in accordance with the Pensions (Increase) Act 1971 is correctly applied.
Regulation 4 amends regulations 41 and 43 to 45 of the 2014 Regulations in relation to survivor benefits for the partners and children of active members and makes consequential changes to reflect the fact that the revaluation adjustment is now to take place at the new ‘revaluation date’. The purpose of these changes is to ensure that, notwithstanding the change in the revaluation date, there is no change to the amount of Scheme benefits to which survivors are entitled.
Regulation 5 amends regulation 46 of the 2014 Regulations in relation to death grants relating to deceased deferred members and pension credit members. The purpose of these changes is to ensure that, notwithstanding the change in the revaluation date, there is no change to the amount of Scheme benefits to which survivors are entitled. The changes ensure that for deferred members, where the person died within the period 1 to 5 April within a Scheme year (ahead of the revaluation date), the death grant reflects the correct pension entitlement, factoring in the relevant revaluation adjustment.
Regulation 6 amends regulations 47, 48, 49 and 50 of the 2014 Regulations in relation to survivor benefits for partners and children of deceased deferred members and similarly to regulation 4, makes consequential changes to reflect the fact that the revaluation adjustment is now to take place at the new ‘revaluation date’. The purpose of these changes is to ensure that, notwithstanding the change in the revaluation date, there is no change to the amount of Scheme benefits to which survivors are entitled.
Regulation 7 amends regulation 51 of the 2014 Regulations in relation to death grants relating to deceased pensioner members, and regulations 52, 53, 54 and 55 of the 2014 regulations relating to survivor benefits in relation to such a member. The changes to regulation 51 of the 2014 Regulations ensure that where the pensioner member died within the period 1 to 5 April within a Scheme year (ahead of the revaluation date), any death grant payable reflects the correct pension entitlement, factoring in the relevant revaluation adjustment. The purpose of these changes is to ensure that, notwithstanding the change in the revaluation date, there is no change to the amount of Scheme benefits to which survivors are entitled.
Regulation 8 substitutes the definition of “revaluation adjustment” at Schedule 1 of the 2014 Regulations and inserts a new definition of “revaluation date”, so that the revaluation date is fixed as 6th April which aligns with the start of the tax year, rather than taking place at the end of a tax year.

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Source: https://www.legislation.gov.uk/nisr/2023/81/note (the official version)
Page: https://openlegislation.uk/local-government-pension-scheme-amendment-regulations-northern-ireland-2023/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.