Local Financial Return (LFR) 2020-2021: guidance

17. LFR 24: Pension Funds

Please note the following:

• The references in these notes are to the Local Government Pension Scheme (Scotland) Regulations 2018 (SI 2018 No. 141), unless otherwise specified.
• The form should be completed by every administering authority, completing one form per pension fund. Entries should include all pension benefits expressly authorised to be charged to pension funds, whether or not rechargeable to services. Any other expenditure not authorised to be charged to the fund should be excluded.
• The data supplied should only relate to employees and pensioners who are covered by the Local Government Pension Scheme and not teachers who have their own schemes. For the avoidance of doubt, AVC contributions received from and transferred to AVC providers should be excluded.
• UK investments comprise UK public sector securities, securities of UK registered companies, property investments in the UK and unit trusts etc. where the management is based in the UK. UK should be taken to include the Channel Islands and Isle of Man, and to exclude the Republic of Ireland.
• Income should be entered as a negative and expenditure as a positive throughout the return.

17.1 Fund Account (Rows 7 to 18)

This section provides a summary of the net opening and closing position of the fund. Most rows are pre-populated with information from sections 2, 3 and 4.

Opening net assets of the fund (Row 9): Include the opening net assets of the fund at 1 April as stated in the Pension Fund accounts.

Revaluation of insurance buy-in contract (Row 16): This line should reflect the revaluation value of the Insurance Buy-In Contract for the Aberdeen City Council Transport Fund (ACCTF) only. This figure should be zero for all other pension funds.

17.2 Scheme Administration (Rows 20 to 48)

Contributions Receivable – Employees and Employers (Rows 25 & 26): Record here payments for pensionable service accrued during the year, from employees and employers respectively.

Pension – Retired and Dependents (Rows 30 & 31): Record here pension payments to retirees and dependents respectively, paid within the year.

Lump sum on retirement (Row 33): Include all lump sum payments on retirement, including those members whose pension was deferred.

Lump sums on death (Row 34): Include death gratuities and lump sum payments on death on a deferred pensioner.

Other benefits (Row 36): Include injury allowances including any payments to widows or dependants.

Elements of 'Total Pensions' relating to payments under the Pensions (Increase) Act (Row 39): Record here the element of total pensions paid, as recorded in Row 32, that relates to the Pensions (Increase) Act. This row is collected as additional information only and will contain double counting. It is therefore not included in any total or subtotal calculations. The validation check in Cell H39 ensures that the value recorded here does not exceed the total pensions paid.

Elements of 'Total Pensions' relating to payments made overseas (Row 40): Include payments to persons resident or to bank accounts outside the UK. Record here the element of total pensions paid, as recorded in Row 32, that relates to payments made overseas. This row is collected as additional information only and will contain double counting. It is therefore not included in any total or subtotal calculations. The validation check in Cell H40 ensures that the value recorded here does not exceed the total pensions paid.

Refunds to members leaving service (Row 43): Include the amount of contributions returned to employees plus interest thereon (if any); any recovery by employing authority from the funds in respect of the employee's share of payment in lieu of contributions and any recovery from the fund of Contributions Equivalent Premium (CEP) paid (Regulation 18); and the amount of charge to tax on repayment (Regulation 18). This line was called 'Refund of Contributions' in prior years' returns.

Contributions equivalent premiums (Row 44): Regulation 18 provides that transfer premiums and limited revaluation premiums to the premiums payable under the Pensions Act may be met from the pension fund. Record this value here, less any recoveries from employees that have been included above.

Transfers in (Row 45) and Transfers out (Row 46): Record here the amount received from (Transfers in, Row 45) or paid to (Transfers out, Row 46) other pension funds for members who have either joined or left the fund during the financial year. These values should include all transfer payments and apportionments. Where apportionments have not been completed, this line should include their book value. Please note transfers in should be entered as a negative number, while transfers out should be entered as a positive number.

Other (Row 47): Record here any other amounts relating to the administration of the scheme that has not been included in the above rows. Please provide a note of what this figure relates to in the comments box at the bottom of LFR 24.

17.3 Investments (Rows 50 to 56)

This section should not include management expenses, which are to be reported in section 4 below.

Rows 52 to 54 should include the same information as is reported in Pension Fund accounts.

Increase (-) / decrease (+) in market value of investments (Row 53): Please record increases as a negative figure and decreases as a positive figure. This is in line with income being recorded as negative and expenditure as positive.

Other (Row 55): Record here any other expenditure relating to investments that has not been included in the above rows, and which does not relate to management expenses. Please provide a note of what this expenditure relates to in the comments box at the bottom of the return.

17.4 Management Expenses (Rows 58 to 65)

This data was previously recorded under Additional Information 5. The row descriptions have been updated to better reflect the terms commonly used in the Pension Fund accounts. The total expenditure figure calculated in Cell D64 is used to pre-populate Cell C14 in Section 1. Please note the following:

• the number of FTE staff should be recorded as at 31 March;
• administration and management staff of the fund includes only the number of FTE staff involved in pension fund duties as an administering authority of a Local Government Pension Scheme (LGPS);
• administration costs should only be those for the local authority acting in the role of the LGPS administering authority;
• the costs to the administering authority of acting as an employing authority should not be included;
• costs of administering the Teacher Schemes should be excluded.

Administration costs (Row 61): This was previously called 'Benefits Administration Expenditure' and should include:

• Staff costs – including employees' salary costs; NI costs; admin staff pension costs; other benefit costs such as cars, bonuses etc.; travel and subsistence; any other costs, such as relocation, recruitment, training etc. – for staff employed in pensions, personnel, accounting functions etc. for time on pension admin duties. Please exclude all costs for staff involved in fund management.
• System costs, including systems processing, development, maintenance, lease costs / depreciation, and disaster recovery insurance.
• General costs, including rent and rates charges for office and storage space, repairs and maintenance, depreciation, postage, telephone and fax costs, insurances, preparation of scheme accounts (excluding audit), PLSA membership fees and other subscriptions, general management and time spent on pension issues, legal costs, stationery, printing and office supplies (including benefits statements and scheme booklets), outside administration consultancy (e.g. actuaries, external auditors, other management and administration consultancies) and other general costs.

Please exclude all costs associated with investment administration and management – these should be recorded under 'Investment management expenses' in Row 62.

Investment management expenses (Row 62): Previously referred to as Investment Management Expenditure and should include:

• both internal fund management costs (such as staff, system and general costs), and external fund management costs (such as fund managers, consultancy and other external management costs including Unit Trust fees, custody fees, corporate governance fees etc.)
• internal monitoring costs, investment accounting, performance measurement, external investment consultancy and advisory fees etc.

Oversight and governance costs (Row 63): Record here any management expenses relating to the oversight and governance of the scheme, including staff costs and appropriate apportionments of management and other overhead costs. This should include costs of Council committees that are charged to the fund.

17.5 Membership details at 31 March (Rows 67 to 82)

Record in this section the membership details of the scheme as at 31 March. This data was previously recorded under Additional Information 2, 3 and 4.

Please note, the columns for Admitted Bodies are only for employees admitted or deemed to be admitted under Regulation 4. It is not for employees of other Scheduled Bodies who participate in the fund.

Number of employees who have opted out (Row 79): Record here the number of employees who have chosen to opt out of the pension scheme after joining. Do not include employees who chose to opt out prior to joining. This information has been requested by the Scottish Public Pensions Agency (SPPA) and will be used to analyse the membership trends of Local Government Pension Fund Schemes.

Number of scheduled bodies (Row 81) and Number of admitted bodies (Row 82): Record here the number of Scheduled Bodies (Row 81) and Admitted Bodies (Row 82) potentially covered by the scheme, including those that don't have active members.

17.6 Retirements in year (Rows 84 to 92)

All information in this section should relate only to employees who retired during the year. The number of retirements should represent those to whom the payments in pension payments are made. Those retiring on 31 March and whose payments are recorded in the next financial year should be included in the LFR 24 period in which the payments are recorded. This data was previously recorded under Additional Information 6.

Scottish Government

Local Government Finance Statistics

August 2021 (updated October 2021)