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To become a SYPF employer you will need to be a body listed in Schedule 2 of the LGPS Regulations 2013
Organisations such as; County Councils, District Councils, Academies and further and higher education corporations are named in the LGPS regulations as scheme employers and automatically participate in the scheme.
Administering authorities can admit organisations that are not automatically scheme employers but who satisfy certain other conditions. These are called 'admission bodies'.
Admission bodies fall into two main categories:
• A body that has a community of interest with Local Government employers. It is a 'not for profit' organisation and is admitted to the Fund by way of an Admission Agreement.
• A company that has taken on work on behalf of a scheme employer by means of a contract or other arrangement and is admitted to the Fund by way of an admission agreement.
Employees of an admission body can join the LGPS if the admission agreement allows it.
An Academy is automatically a Scheme employer upon conversion. This means that all non-teaching staff employed by an Academy Trust upon conversion, and any new members of staff who are employed post-conversion, are entitled to membership of the scheme. LGPS Regulation 2013 Definition A proprietor of an academy within the meaning of section 579 (general interpretation) of the Education Act 1996 who has entered into academy arrangement within the meaning of section 1 (academy arrangements) of the Academies Act 2010. LGA Academy Brochure
• The converting School needs to complete an employee Data file detailing all of the staff who are part of the transfer. Please send this information via a secure messaging service. Data file [15 kb] • The completion of the Point of contact form [278 kb] • The completion of the Direct Debit Mandate, SYPA collect contributions via Direct Debit, please a rrange for the completion of the mandate in readiness for the admission Direct debit mandate [457 kb] Please refer to the section on our website regarding the Direct Debit collection where we have a guide and FAQs regarding the process• Details of the Multi Academy Trust (MAT), if applicable. • Completion of the Funding Declaration and Billing address [683 kb] • Copy of the Secretary of State for Education - Academy Order
Please send the following documents via secure messaging, if you do not have access to a secure messaging service please contact us for further assistance
The potential cost of an application for an Academy is approximately £450-500 plus VAT. This fee has been significantly reduced from earlier years but does assume timely and accurate data is provided to SYPA when required. Additional fees may apply if this is not the case. (These cost are correct at March 2022). SYPA use Hymans Robertson LLP as the funds actuary. Theses cost are payable by the school. The support grant given to the school y the Department of education to help with the cost of converting to an Academy status can be used to cover this.
An application can take a minimum of three months to process, but we are unable to confirm the exact timescales due to various factors which may affect the application process e.g. receipt of information, data accuracy, and delay in academy conversions.
Where a Multi-Academy Trust (MAT) is in place, it is legally the scheme employer for staff in all the academies in its trust. However, it is acceptable practice for LGPS funds to treat each academy in a MAT as a separate employer, because each Academy has its own staffing profile. Employer contribution rates can therefore differ between academies within the same MAT. Some MATs may want to request that SYPA treat them as a single employer for relevant staff in all its academies. The benefits for a MAT to be considered as a single employer include:
• uniform contributions and employer rates across the MAT for that particular fund • reduced annual administration costs/burdens e.g. in identifying/allocating employee costs for individual academies • the MAT might be considered less of a risk than an individual academy, which could impact employer contribution rates and deficit repayment arrangements.
However, the MAT should be aware that being treated as a single employer will mean a sharing of assets and liabilities across all their academies. They may therefore incur extra costs to carry out the necessary calculations to share out those assets and liabilities each time a school enters or leaves the MAT.
Once the actuarial work has been carried out by the funds actuary we will forward the school/trust details of the employer contribution rate and any deficit repayment arrangements. When an academy becomes a scheme employer under the LGPS Regulations, it takes on a responsibility to meet the liabilities for the employees (active members) at the point of conversion. The calculation to determine how assets and liabilities are allocated between the local authority (the previous scheme employer) and the academy on conversion is very complex, and is carried out locally by the fund’s actuary. In all cases, liability for pre-conversion pensioner and deferred members remains with the local authority. However, the methodology used for the allocation of assets may result in the academy not inheriting a sufficient share of assets to meet the liabilities of the active members who are transferred. Where this is the case, the Academy will immediately have a deficit on conversion. Deficit recovery arrangements are set out in our Pension Administration Strategy
SYPA collect contributions via Direct Debit, Please refer to the section on our website regarding the Direct Debit collection
The employer contribution rate is calculated during the actuarial assessment and will be payable from the conversion date. This rate will be subject to review at the next triennial actuarial valuation
Once the academy has converted the employee pension contributions should be paid to the Fund. The employee 2021 Contribution Pay Bands [PDF 505 KB] The employee contribution rate would be payable from the conversion date.
The Academy (or their payroll provider) must submit a Monthly Data Collection (MDC) file via the SYPA secure online Employer Web site. For information on uploading monthly submissions, producing the file, hints, tips and FAQ’s, please refer to our Monthly data submissions guide. Submission should be made in accordance with the MDC collection dates as shown on the table in the Collection of Pension Contributions By Direct Debit Process Guide
Please read our Administration Strategy It sets out, amongst other things, how the Administering Authority, SYPA, will administer the Pension Scheme and Fund on behalf of Employing Organisations, and their Scheme Members, participating in the South Yorkshire Pension Fund, its requirements for employers in terms of the timely and accurate provision of information pertinent to the administration of the Scheme and Fund, and the penalties to be applied to those employing organisations failing to meet their duties, responsibilities and obligations as detailed within the Pension Administration Strategy
If an academy or multi-academy trust (MAT) chooses to outsource particular services (e.g. catering or cleaning services) to another provider, and that involves transferring employment of individuals, the contracted provider must also offer access to LGPS to those employees who are transferring, under Fair Deal. To do this, the academy or MAT must ensure the contractor body has, admitted Body Status, governed by an admission agreement. The agreement will apply to all transferring staff. However, the contractor is not bound to offer LGPS to new staff and therefore a ‘closed’ agreement restricted to transferring staff only is usual practice. A scheme employer who is outsourcing a function is known as the “letting authority”. If outsourcing, the Academy or MAT should remember that if an admission agreement ends (for example, if the contract with the Academy is terminated) any outstanding employer contributions required to meet pension liability obligations, may ultimately revert to them, as the letting authority.
LGPS Regulations Definition
An administering authority may make an admission agreement with:
a body which provides a public service in the United Kingdom otherwise than for the purposes of gain and has sufficient links with a scheme employer for the body and the scheme employer to be regarded as having a community of interest, whether because the operations of the body are dependent on the operations of the scheme employer or otherwise, or
a body to the funds of which any scheme employer contributes, or
a body which provides or will provide a service or assets in connection with the exercise of a function of a scheme employer as a result of:
the transfer of the service or assets by means of a contract or other arrangement.
The cost of an actuarial assessment from the funds actuary Hymans Robertson LLP is approximately £450 (£550 with a bond assessment) plus VAT. This fee has been significantly reduced from earlier years but does assume timely and accurate data is provided to SYPA when required. Additional fees may apply if this is not the case. (These cost are correct at March 2022). In addition to the actuarial work the legal cost would amount to approximately £750 (£1000 with a bond) plus VAT (these costs are correct at March 2022)
An actuarial assessment will determine the level of pension liability risk arising on the premature termination of the admission agreement due to insolvency, winding up or liquidation of the admission body, contract ending or last active member leaving employment. This assessment will confirm the recommended bond value and employer contribution rate. The employer contribution will then be reassessed at the next triennial actuarial valuation. If this assessment has not been included in the contract tender, an actuarial assessment will be requested by the Fund from the Fund actuary upon receipt of the application and member data from the former and new employer. This assessment will be passed to the applicant. The payment of actuary fees will also be the responsibility of the applicant You should contact the outsourcing scheme employer to confirm their requirements with regards to bond provision. Please note that there is no requirement from the Fund for a bond to be implemented. The bond amount detailed in the Fund’s actuary correspondence is for the applicant’s reference, and any decision to implement such a bond is the responsibility of the outsourcing scheme employer as it sees appropriate. Once the admission agreement is sealed, if the applicant were to terminate, and they were unable to pay the potential exit deficit this would fall back on the guarantor to pay. A bond would provide a certain level of protection to the guarantor, so they would not be liable for all or part of the outstanding deficit as the Fund could call on the bond. If a bond is required by a scheme employer, the admission body shall enter into an indemnity or bond in an approved form with an authorised insurer or a relevant institution (as defined by Schedule 2 Part 3(7) of the Local Government Pension Scheme Regulations 2013: Local Government Pension Scheme Regulations 2013 The Fund would then be notified of the bond requirement and bondsman (if a bond is required), and we will ask our legal advisors to circulate a draft version of the bond agreement (if required) with the admission agreement to the guarantor and applicant for approval. Once approved, the engrossed agreement would be issued for signing. Legal fees will apply for these agreements which would be charged to applicant.
Once the Admission Agreement is sealed and the applicant is a scheme employer it is important to know what the next steps and responsibilities the new employer has to maintain. Please see below:
The employer contribution rate is calculated during the actuarial assessment and will be payable from the admission date. This rate will be subject to review at the next triennial actuarial valuation.
Once the Admission Agreement is signed and sealed, employee pension contributions should be paid to the Fund. The employee 2021 Contribution Pay Bands [PDF 505 KB] The employee contribution rate would be payable from the ‘effective date’ of the agreement.
The Admitted Body (or their payroll provider) must submit a Monthly Data Collection (MDC) file via the SYPA secure online Employer Web site. For information on uploading monthly submissions, producing the file, hints, tips and FAQ’s, please refer to our Monthly data submissions guide. Submission should be made in accordance with the MDC collection dates as shown on the table in the Collection of Pension Contributions By Direct Debit Process Guide
Please read our Administration Strategy It sets out, amongst other things, how the Administering Authority, SYPA, will administer the Pension Scheme and Fund on behalf of Employing Organisations, and their Scheme Members, participating in the South Yorkshire Pension Fund, its requirements for employers in terms of the timely and accurate provision of information pertinent to the administration of the Scheme and Fund, and the penalties to be applied to those employing organisations failing to meet their duties, responsibilities and obligations as detailed within the Pension Administration Strategy.
It is important that you keep SYPF informed of details of the Contract. If the contract ends and is not extended, or the last active member on the contract leaves employment, your admission agreement will terminate. When an agreement terminates, there are a couple of potential cost implications that the employer needs to be aware of:-
1. The Fund must obtain a final valuation at exit date of the liabilities that were built up in respect if the exiting employer’s current and former employees. The fund use Hymans Robertson LLP as the actuary and the fee is approximately £500-600 plus VAT for this final valuation and must be paid by the exiting employer. This fee has been significantly reduced from earlier years but does assume timely and accurate data is provided to SYPA when required. Additional fees may apply if this is not the case.
The final valuation may identify a termination deficit * which will need to be paid by the exiting employer to settle all the liabilities under the admission agreement. In exceptional cases there may be a surplus at termination. In cases where the contracting employer has borne some of the funding risk (e.g. where they have subsidised the employer contributions in some way through the terms of the service contract or where they have agreed to restrict the pensions liability of the exiting employer) any surplus would be credited to the contracting employer’s share of the fund. In cases where the exiting employer has fully funded all the contributions AND carried all the funding risk, any surplus would be paid to the exiting employer.
* The contribution rates paid by the employer during the length of the contract were set based on estimates of the projected liability (re-assessed at every triennial valuation) using a wide number of assumptions - for example around membership movements, investment returns, inflation, etc. These assumptions are unlikely to have been exactly borne out in reality of course so the termination deficit (or surplus) reflects the actual experience at the point the admission agreement terminates and is a final settlement amount which extinguishes any future liability.
If your contract is extended, you must confirm the new contract end date to the Fund as soon as possible, to enable us to update our records.
South Yorkshire Pension Fund has a dedicated Employer Engagement team who are committed to supporting employers.
We offer a range of different ways to engage and support our employers on the Employer Engagement page