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Useful scheme information



How to become a South Yorkshire Pension Fund employer

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.

  • Academies If you are a school and
    are considering converting
    to an academy
  • Admission body If you are an employer choosing
    to participate in the LGPS under
    an admission agreement i.e. a
    contractor or a charity

LGPS Regulations Definition

An administering authority may make an admission agreement with:

  1. 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

  2. a body to the funds of which any scheme employer contributes, or

  3. 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.

  1. The outsourcing employer needs to complete the Template for new admission body, providing SYPF with details of the outsourcing service or function Template for new admission bodies[778 kb]
  2. The completion of the employee data file detailing all staff who are part of the transfer Data file [15 kb]
  3. The completion of the points of contact form Point of contact form [278 kb]
  4. Completion of the Direct Debit Mandate - SYPF collect contributions via Direct Debit. Please arrange 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 regarding the process

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
 

  1. Download PDFTemplate for new admission bodies[778 kb]
  2. Data file [15 kb]
  3. Download PDF Point of contact form [278 kb]
  4. Download PDF Direct debit mandate [457 kb] Please refer to the section on our website regarding Direct Debit Collection

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 opens in new window 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 finalised - the next steps 

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:

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 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 Download PDF 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. 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.


  2. 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