Access and Fairness LGPS Regulation Changes
On 9 March 2026 the government introduced the LGPS (Miscellaneous Amendments) (Member Benefits) Regulations 2026. These regulations are the first phase of implementing changes under the Access and Fairness proposals.
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The bulk of the changes in this first phase impact on the fund calculations of death benefits and recalculations required as part of the McCloud remedy, including the:
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equalisation of survivor benefits.
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removal of the upper age limit of 75 to qualify for a death grant.
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removal of the requirement to pay a death grant to personal representatives if the administering authority has not paid it using their discretion within the ‘two-year period’. The ‘two-year period’ is the two years after the Scheme member’s death, or two years after the date on which the administering authority could reasonably be expected to have become aware of the death.
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minor changes to the rules covering short term children’s pensions.
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formal removal of the requirement for members to have nominated a cohabiting partner for survivor benefits between 1 April 2008 and 31 March 2014. This change applies from 1 April 2014 and is backdated to cover deaths between 1 April 2008 and 31 March 2014. The Cheshire Pension Fund has already applied this change in line with earlier guidance.
No action is required from employers, but awareness of the updated position may be helpful when supporting members and their families.
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The Gender Pensions Gap and Qualifying additional pension arrangements (QAPAs)
One change that will have a significant impact for the processing of payroll, provision of information to the fund and members is a redesign of how periods of unpaid leave are treated.
For any absences that begin on or after 1 April 2026, there is a new approach to how member pensions are treated for authorised unpaid absences:
Absences of more than 14 calendar days:
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the cost of buying back pension ‘lost’ during a period of authorised unpaid absence of more than 14 days will be based on the normal contribution rates for both the member and employer. These contracts are called QAPAs.
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the time limit to apply for a QAPA will be one year after returning to work or the member’s date of leaving. This replaces the current limit of 30 days.
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Scheme employers will be able to contribute to the cost of a QAPA for the whole of an unpaid absence that lasts more than three years.
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the pension bought through a QAPA will be on the same basis as normal pension build up. Unlike APCs, it will count towards the calculation of survivor pensions and will not be reduced if the Scheme member retires on redundancy or efficiency grounds.
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these new rules will only apply to a continuous period of authorised unpaid absence that started after 31 March 2026.
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The existing rules will apply to unpaid breaks that started before 1 April 2026:
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cost to buy ‘lost’ pension is based on age-related factors.
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Scheme employer funds two thirds of the cost if the Scheme member elects to buy the lost pension within 30 days of returning to work (or such a longer period allowed by the Scheme employer).
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the pension ‘bought back’ is reduced in cases of redundancy or efficiency retirement before Normal Pension Age.
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the added pension does not count towards survivor pensions.
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Absences of 14 calendar days or less:
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compulsory pension contributions will be payable for authorised unpaid absences of 14 days or less. Contributions will be based on ‘lost’ pay and the Scheme member and Scheme employer’s normal contribution rates. This applies to authorised absences that start after 31 March 2026. The current rules continue to apply to an unpaid break that started before 1 April 2026.
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assumed pensionable pay (APP) will apply during unpaid additional adoption leave, unpaid additional maternity leave and unpaid shared parental leave. APP will apply during these types of absences only if the unpaid period starts after 31 March 2026. The current rules will apply to any unpaid additional maternity or adoption leave, or unpaid shared parental leave that started before 1 April 2026.
NOTE: There is no adjustment for working days or in respect of members who work part time when working out whether an unpaid break is less than 15 calendar days.
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Absences guidance: contributions and actions
Sickness
Member contributions are paid using the normal contribution rate on any pay that is received.
Employer contributions are paid based on APP using the normal employer contribution rate for the duration of any lower paid or unpaid periods.
Contributions are deducted as part of usual payroll and paid across to the fund. Pay reported during any periods of lower or nil pay should include APP.
Strike Break / Trade Dispute
The member can ask for their APP for the strike break from their employer.
The employer will provide the APP figure, and the member can obtain a quote for buying back the lost pension using an APC:
Buy lost pension calculator :: LGPS
100% of the cost is paid by the member unless the employer chooses to contribute.
If the member proceeds, they can choose to make payment through lump sum or regular deduction via payroll or by making a lump sum payment directly to the fund.
Other Absences including:
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Ordinary maternity or adoption leave
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Paid additional maternity or adoption leave
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Paid shared parental leave
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Paternity leave
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Bereaved partner’s paternity leave
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Paid parental bereavement leave
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Paid neonatal care leave
Member contributions are paid using the normal contribution rate on any pay that is received.
Employer contributions are paid based on APP using the normal employer contribution rate for the duration of any lower paid or unpaid periods.
Contributions are deducted as part of usual payroll and paid across to the fund. Pay reported during any periods of lower or nil pay should include APP.
Unpaid absences including:
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Unpaid additional maternity or adoption leave
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Unpaid shared parental leave
Member contributions are paid using the normal contribution rate on any pay that is received.
Employer contributions are paid based on APP using the normal employer contribution rate for the duration of any lower paid or unpaid periods.
Contributions are deducted as part of usual payroll and paid across to the fund. Pay reported during any periods of lower or nil pay should include APP.
The member can ask for their APP for the period of unpaid leave from their employer. The employer will provide the APP figure, and the member can obtain a quote for buying back the lost pension using an APC:
Buy lost pension calculator :: LGPS
If the member elects to buy back the lost pension within 30 days of returning from unpaid leave, 1/3 of the cost is paid by the member and 2/3 by the employer.
If the election is made more than 30 days after returning from unpaid leave the entire cost is paid by the member, unless the employer opts to extend the deadline.
If the member proceeds, they can choose to make payment through lump sum or regular deduction via payroll or by making a lump sum payment directly to the fund.
Member pays contributions using the normal contribution rate on any pay that is received.
Employer contributions are paid based on APP using the normal employer contribution rate for the duration of any lower paid or unpaid periods.
Contributions are deducted as part of usual payroll and paid across to the fund. Pay reported during any periods of lower or nil pay should include APP.
If the member is in the 50/50 section of the scheme, they must be moved into the main section at the beginning of the pay period after they go onto no pay.
Other authorised Unpaid absences including:
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Unpaid neonatal care leave
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Unpaid parental bereavement leave
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Sabbaticals
The member can ask for their APP for the period of unpaid leave from their employer. The employer will provide the APP figure, and the member can obtain a quote for buying back the lost pension using an APC:
Buy lost pension calculator :: LGPS
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If the member elects to buy back the lost pension within 30 days of returning from unpaid leave, 1/3 of the cost is paid by the member and 2/3 by the employer.
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If the election is made more than 30 days after returning from unpaid leave the entire cost is paid by the member, unless the employer opts to extend the deadline.
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If the member proceeds, they can choose to make payment through lump sum or regular deduction via payroll or by making a lump sum payment directly to the fund.
Pension contributions are compulsory – no member application needed.
Contributions are based on ‘lost pensionable pay’. This is the pay the member would have received if they had been at work receiving their ‘normal’ contractual pay instead of taking unpaid leave.
Unlike Assumed Pensionable Pay (APP), it is not increased because of non-contractual payments the member received in the past, such as pay for non-contractual overtime.
If a member receives some pensionable pay, e.g. a bonus or pay arrears, during a period of authorised unpaid leave, the actual pensionable pay and lost pensionable pay should be added together to get the total pensionable pay for the period.
Employer contributions are based on the usual contribution rate for that employer for the year in which the leave was taken.
Member contributions are based on their normal contribution rate. If the member was paying reduced contributions immediately before the unpaid period because they had elected to join the 50/50 section of the scheme, the reduced rate also applies when working out the compulsory pension contributions the member must pay in respect of the unpaid period.
A pay reduction because of unpaid leave is ignored when allocating the member to the correct contribution band.
Purchasing additional leave
This change means that contributions may be compulsory where an employee has purchased additional annual leave and the employer treats the purchased leave as unpaid leave.
Members who participate in such a scheme and pay for it through a reduction to their pay will no longer have to arrange an Additional Pension Contribution (APC) contract to buy back the pension they have ‘lost’. From 1 April 2026, this reduction should not reduce the member’s pensionable pay.
Annual leave purchase schemes that operate in a different way, such as by reducing the member’s contractual working time will not be affected by this change.
The pension ‘lost’ due to authorised unpaid leave will be bought back through a QAPA – no compulsory contributions should be deducted for the first 14 days.
Employers and members contribute to the cost of a QAPA:
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the member pays the contributions they would have paid if they had not been absent using their normal contribution rate. The member will pay the reduced rate if they were in the 50/50 section immediately before the absence and they have not moved back to the main section
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the employer pays the contributions they would have paid if the member had not been absent, based on the usual contribution rate for that employer for the year in which the leave was taken.
A pay reduction because of unpaid leave is ignored when allocating the member to the correct contribution band.
Employer contributions to a QAPA are:
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compulsory if the authorised absence is three years or less.
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compulsory for the first three years of an absence of more than three years. An employer can choose to contribute to the cost of buying back the pension lost in the unpaid period after the first three years. If the employer does not contribute to the cost of covering an unpaid break in excess of three years, the member may meet the cost.
The arrangement is still a QAPA and the cost is the total member and employer contributions for the period.
The QAPA arrangement must specify how much pension will be credited to the active pension account:
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if the member is in the 50/50 section, 1/98th of the pensionable pay they would have received if they had been at work receiving their normal pay during the qualifying period of absence
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otherwise, 1/49th of the pensionable pay they would have received if they had been at work receiving their normal pay during the qualifying period of absence.
‘Normal pay’ is the member’s contractual pay. If the QAPA is paid by regular contributions, the arrangement must also specify the amount of extra contribution to be paid each Scheme year and the additional pension to be credited at the end of each Scheme year.
Some of the rules that apply to an APC arrangement will also apply to a QAPA:
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the regulations allow the contributions to be paid as a lump sum or by regular contributions over a year or multiple years
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if the QAPA is paid by regular contributions, the contract must end before the member’s normal pension age (NPA). A member over NPA or within a year of reaching their NPA can only pay by lump sum
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the member may make a direct payment to the administering authority if the QAPA is paid by lump sum. This may happen if:
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they may not pay by regular contributions, and they do not earn enough for the contributions to be deducted in a single pay period, or
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the member is not returning to work after an authorised absence. In this circumstance, the member must make their election before their last day of Scheme membership. The member may elect to start a QAPA to cover part of an authorised period absence. If they do so, they may start a further arrangement to cover the remaining portion of the absence, or part of the remaining portion of the absence. The new arrangement will also be a QAPA if the member makes their election while they are in the same employment and within a year of returning to work, or within a longer period allowed by the employer.
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Reserve forces leave
If the member elects to remain in the LGPS the pension is worked out using APP.
The member pays contributions on APP using their normal contribution rate and the Ministry of Defence (MoD) pays using the employer contribution rate. The employer needs to tell the member the amount of basic pension contributions both the member and the MoD must pay. The member tells the MoD, and the MoD deducts the contributions from the reservists pay and make payments directly to the administering authority.
Pension contributions should not be deducted from any pay the member receives from their LGPS employer during this period.
LGA have developed a calculator to help employers determine the member and employer costs of buying lost pension under a Qualifying Additional Pension Arrangement (QAPA): Employer Guides - QAPA Calculator
The Government plans to implement the remaining proposals from the Access and Fairness consultation later in 2026.
