The admission agreement may come to an end for a number of reasons:
- when the commercial contract ends
- when the last active scheme member leaves
- if the terms of the admission agreement are breached, or
- if the employer or administering authority give 3 months written notice to terminate.
In these events the Treasury and Investments team will ask the Fund Actuary to produce a cessation report to determine the position on exit. This may be a surplus, deficit or nil balance position. The cost of the report is recovered from either the scheme employer or admitted body employer, in line with your admission agreement .
If there is a deficit
An exit liability may be payable on a full cessation basis, or instalments of the full cessation basis including interest, as agreed with the administering authority.
Kent Pension Fund will not accept the exit payment being settled on anything other than the terms of regulation 64 of the 2013 regulations which for the avoidance of any doubt, does not allow for settlement on the ongoing basis.
Once the deficit is paid, we confirm there is nothing further due. The Fund writes to confirm the exit from the Fund and will discharge any security as appropriate.
If there is a surplus
The Local Government Pension Scheme regulations allow us to return a surplus to an exiting employer although before doing so, the Fund wishes to establish if there is any ‘risk sharing’ between the letting authority and the exiting employer. If the surplus is above £20,000, we will seek permission of the Pension Fund Committee before returning it.
Once the surplus is discharged, we confirm there is nothing further due. The Fund writes to confirm the exit from the Fund and will discharge any security as appropriate.
If there is a nil balance
There is neither a deficit or surplus due.
We confirm there is nothing further due. The Fund writes to confirm the exit from the Fund and will discharge any security as appropriate.