21^st January 2002

Sir/Madam

1. This letter contains guidance provided by the Government Actuary on the Local Government Pension Scheme Regulations 1997.

2. For the present the guidance referred to in paragraph 3 is available in hard copy only. Copies of the guidance referred to in paragraphs 4 and 5 of this letter are attached. Guidance on Regulation 66 and Regulation 58 will also be made available on our website www.xoq83.dial.pipex.com

3. Draft guidance on individual transfers to and from the LGPS is attached. This guidance expands on the 1995 GAD note on transfers and takes account of regulatory changes made since then. GAD have included a note on the background of the regulatory changes and their interpretation of the current position. Within this they acknowledge that a number of grey areas exist and have included in the form of ‘DNs’ some queries on the form of the regulations as they currently stand. LGPS practitioners are invited to comment and raise any questions they may have on these DNs before GAD signs off the final guidance note. Any comments should be channelled through this office in the first instance by 28 February.

4. The Local Government Pension Scheme (Amendment No. 2) Regulations 2001 amended the Local Government Pension Scheme Regulations1997 with effect from 13 November 2001. The changes substituted a new regulation 66 in the principal regulations (Elections as to use of accumulated value of AVCs). Regulation 66(5) provides that a member who makes such an election shall become entitled to such additional pension in accordance with guidance provided by the Government Actuary. The Guidance Note under Regulation 66(5) of the new version of Regulation 66 is enclosed.

5. Regulation 58(1) (Election for pension in lieu of retirement grant) provides a member with the right to elect for pension in lieu of either the whole or part of his retirement lump sum. The Local Government Pension Scheme (Miscellaneous) Regulations 2001, which came into effect on 2^nd April 2001, clarified the intention of this provision by removing the age restriction of 50. The revised GAD Guidance Note replaces the Note dated 22 January 1998 and should be used with effect from January 2002.

6. We are not issuing any GAD guidance in relation to Regulation 55(10) pending further discussions with LGPC. In the meantime please continue to use the changes provided by GAD guidance note of 11 June 1998.

7. Factors which are required for any age not shown in the above GAD guidance will be dealt with on an individual basis. I would be grateful if, in such a case, requests could be channelled through the Department.

8. I understand from GAD that they are endeavouring to produce the outstanding factors needed for the 1997 regulations. We will keep you posted.

Yours faithfully

Roisin Macreadie

Cc: Terry Edwards