Public Employees Pension Scheme Regulations

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

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demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
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A decision made 16 December 2010 regarding: Public Employees Pension Scheme Regulations.

Decision Reference: MD-C-2010-0094

Decision Summary Title :

Public Employees Pension Scheme Regulations - QROPS

Date of Decision Summary:

13 December 2010

Decision Summary Author:

Maureen Byron

Senior HR Manager

Decision Summary:

Public or Exempt?

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

N/A

Written Report

Title :

Public Employees Pension Scheme Regulations - QROPS

Date of Written Report:

9 December 2010

Written Report Author:

Maureen Byron

Senior HR Manager

Written Report :

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Subject: Public Employees Pension Scheme Regulations - QROPS

Decision(s): The Chief Minister, acting on the recommendation of the States Employment Board, agreed to lodge ‘au Greffe’ the following amendments to the Regulations of the Public Employees Pension Scheme with a view to securing the earliest possible date for debate -

(a) the draft Public Employees (Contributory Retirement Scheme) (Amendment No. 18) (Jersey) Regulations 201-;

(b) the draft Public Employees (Contributory Retirement Scheme) (Existing Members) (Amendment No.11) (Jersey) Regulations 201-;

(c) the draft Public Employees (Contributory Retirement Scheme) (New Members) (Amendment No.14) (Jersey) Regulations 201-; and

(d) the draft Public Employees (Contributory Retirement Scheme) (Former Hospital Scheme) (Amendment No.5) (Jersey) Regulations 201-

Reason(s) for Decision: In order to receive transfer payments from pension schemes registered in the United Kingdom the Public Employees’ Contributory Retirement Scheme (PECRS) must be recognised as a Qualified Recognised Overseas Pension Scheme (QROPS) by HM Revenue & Customs.

In December 2006 the Scheme’s actuaries advised that legislative changes in the UK tax regime effective from 6 April 2006, meant eligibility for QROPS status could not be achieved unless the minimum retirement age specified in the rules of the scheme was equal to or greater than the Normal Minimum Pension Age, which was defined by UK legislation as age 50 for benefits coming into payment until 5 April 2010 and age 55 after that date.

Therefore, in order to be QROPS compliant, all transfers received into PECRS after 6 April 2006, due for payment after 2010, could only be paid if the individual is aged 55 and above. This would not apply to transfers received after 6 April 2006 which would be due for payment prior to 2010.

The amendments to the legislation ensures that the part of the pension which is not attributable to a transfer value is payable from the date the member retires. The part of the pension which is attributable to the transfer value is treated as a deferred pension and payable accordingly.

These amendments have been discussed and agreed with the PECRS Committee of Management and the Public Employees Pension Scheme Joint Negotiating Group. The draft legislation was agreed at the States Employment Board meeting of 3rd December 2010.

Resource Implications: There are no financial or manpower implications

Action required: The Project and Research Officer will arrange with the States Greffe for the Report to be lodged ‘au Greffe’ for consideration on the earliest possible date.

Signature:

Position:

Senator T.A. Le Sueur, Chief Minister

Date Signed:

Date of Decision (If different from Date Signed):

Public Employees Pension Scheme Regulations

REPORT

The Chief Minister is promoting amendments to the Public Employees Pension Scheme, namely the:-

Public Employees (Contributory Retirement Scheme) (Existing Members) (Jersey) Regulations 1989
Public Employees (Contributory Retirement Scheme) (New Members) (Jersey) Regulations 1989
Public Employees (Contributory Retirement Scheme) (Jersey) Regulations 1967
Public Employees (Contributory Retirement Scheme) (Former Hospital Scheme) (Jersey) Regulations 1992

In order to receive transfer payments from pension schemes registered in the United Kingdom the Public Employees’ Contributory Retirement Scheme (PECRS) must be recognised as a Qualified Recognised Overseas Pension Scheme (QROPS) by HM Revenue & Customs.

The amendments to the legislation ensures that the part of the pension which is not attributable to a transfer value from a UK pension scheme is payable from the date the member retires or from the date the member’s employment is terminated. The part of the pension which is attributable to a UK pension scheme is treated as a deferred pension and payable accordingly, i.e. at age 55.

For example, an employee whose 55th birthday is after 2010 has transferred pension benefits into PECRS from a UK scheme since 6th April 2006. Under this scenario they will not be able to receive benefits due to them in respect of the transferred element of their pension before their 55th birthday. However, they will be able to receive any accrued benefits under PECRS for their employment in the States of Jersey if they exercise their option to retire early before their 55th birthday. This legislation affects two employees who have agreed not to draw their benefits from a UK transfer until age 55.

Please note the legislation regarding early retirement for uniformed services was amended by legislation enacted on 1st March 2009. The amendment altered the PECRS Regulations so that all future recruits to the uniformed services on or after 1st March 2009 under Category A will have a retirement age of 55, i.e. the option to retire between age 50 and age 55 has now been removed.

These amendments have been discussed and agreed with the PECRS Committee of Management and the Public Employees Pension Scheme Joint Negotiating Group. There are no financial or manpower implications arising from this draft Law.

MB/HRD/CMD

December 2010