Eligibility of New Employees into the LGPS

Employees with contracts of three months or more must be entered automatically into the LGPS unless they give you written confirmation that they wish to opt-out; they can do this by completing an Opt-out form (PDF, 178 KB)(opens new window); the only exception to this are employees aged 75 or over and/or those who are eligible for another public sector pension scheme (with a few exceptions); these categories of employee are not eligible to join.

Employees with a contract of less than three months are also eligible to join the LGPS but in most cases they must opt-in. Only employees with a contract of less than three months who meet the definition of an eligible jobholder under auto-enrolment legislation (for employers whose auto-enrolment staging date has passed) should be auto-enrolled into the Pension Scheme (note this rule changed in April 2014)

The change in 2014 also impacts any employees where there is no mutual obligation to work outlined in a formal contract. Hence, it is our understanding that all Scheduled Bodies employees (except those who are already eligible for another scheme, such as the Teachers Scheme) are now eligible to join the LGPS.

All resolution bodies must have a resolution in place stating which employees they have designated as being eligible to join the LGPS. Since 1 October 2012, all new employees, whose posts are designated as being eligible for the LGPS, should be auto-enrolled into the LGPS from each employee's employment start date (except employees with a contract of three months or less who do not meet the definition of being an 'eligible jobholder' under Auto-enrolment legislation). Employees can still opt-out at any time, although employees are only able to opt-out after the commencement of employment (i.e. they cannot sign an opt-out form before they start working).

Designated employees with no formal contract or a contract of less than 3 months will need to opt-in as they cannot be contractually enrolled into the scheme even if they are designated (unless they are an 'eligible jobholder' under auto-enrolment legislation).

As there have been several changes over the years in this area, we recommend that Resolution Bodies review the current resolution they have in place in order to make sure that it is still valid.

However, note that the only exception to this is that employees aged 75 or over and/or those who are eligible for another public sector pension scheme (with a few exceptions); these categories are employees are not eligible to join regardless of the above.

For admitted bodies, the eligibility criteria and admission process for new employees should be dictated by what the admission agreement says in the relevant clause. We normally refer to the admission agreement as either being 'open to new entrants' or 'closed to new entrants'.

Open to new entrants arrangements will still normally mean that approval from the employer and the Fund will be needed to allow new staff to join, and, for TUPE transfers, within the same area of employment under to which the employees were transferred.

However, for TUPE transfers in both open to new entrants and closed to new entrants situations, anyone who transferred across to the new employer who was eligible to join the LGPS at the date of transfer but who was not currently a member (normally because they had opted-out without their previous employer) should remain to be eligible after the transfer date (this will form part of the admission agreement). Furthermore, for all new contracts from 1 October 2012 onwards, all eligible staff (whether current members or not) should be automatically enrolled into the LGPS from the transfer date, although members can still opt-out again.