The Local Authorities Pensions Fund Act, 2006

This section gives the Act its short title and says it is deemed to have come into operation on 1 July 2005.

This section says the Act applies to specified local government and Fund-related employees, and also to institutions or self-employed persons who choose to join the Fund.

This section defines key terms used in the Act, including employee, employer, Fund, inspector, salary, and qualifying pensionable service.

This section establishes the Local Authorities Pensions Fund and says money is to be paid into it from specified sources.

The Fund’s objectives are to provide benefits to insured persons, improve those benefits over time, and set policies and strategies to administer the scheme under the Act.

The existing Fund is transferred to the Fund when the Act starts, and the Board gets sole control and management of it.

The Board is responsible for managing and administering the Fund.

The President appoints the Fund’s Director General, and the Board may appoint other officers and employees.

This section establishes the Board of Trustees of the Local Authorities Pensions Fund and gives it corporate powers, including the ability to sue, hold property, contract, and set its own meeting procedures.

The First Schedule sets rules for the Board’s composition, appointments, termination of members, and proceedings. The Minister may change the Schedule by Gazette order after consulting the Board.

The Board must manage the Fund, protect members’ interests, uphold good governance, advise the Minister, and do what is necessary for the Fund’s proper and efficient administration.

The Board must administer the Fund under the Act, and it may authorize payments from the Fund only for purposes expressly authorized by the Act.

The Board has power to assess the Fund, recommend contribution changes when underfunded, appoint staff and contractors, and do acts needed to carry out the Act.

The Board may delegate some of its functions and powers in writing, but it cannot delegate its own power of delegation or approval of the annual budget or accounts.

Employees in a contributing employer’s service must be registered as insured persons, and the Minister can make Gazette orders about who becomes insured and who counts as a contributing employer.

Contributing employers must register, display their certificate at the workplace, pay statutory contributions for insured persons, keep proper records, and file a yearly return with the Director General within three months after the financial year ends.

Contributing employers and insured persons may make other contributions to the Fund, but they must apply to the Director General and be registered if approved.

An insured person who keeps contributing to the Fund is exempt from having to contribute to any other compulsory pension scheme, and the contributing employer is also exempt.

Insured persons must contribute 5% of monthly salary to the Fund, and employers must deduct it and also contribute 15% for the insured person’s account.

The Board must keep a list of all insured persons, open and maintain a separate account for each one, and give account-status information to contributing employers and insured persons.

Sums collected, recovered, or transferred for contributions and payments to the Fund must be paid into the Fund as the Board directs.

An insured person is entitled to a pension or gratuity on retirement if the listed retirement conditions are met.

Unclaimed benefits must be moved to reserve accounts after set periods, and the Board may order payment on application.

The Board must have the Fund’s assets and liabilities valued by an actuary at least every three years, or sooner if the Minister directs. The Board must submit the actuary’s report to the Board and make recommendations to the Minister. The Minister must act on the report and may also advise higher contributions or take other measures to reduce any deficiency or loss in the Fund.

Pensions, gratuity, and related benefits are funded by insured person and employer contributions, and those benefits may be due as of right when the employee retires under section 33 or otherwise stops working in qualifying circumstances.

Section 26 lists the classes of benefits payable under the Fund and says most of them cannot be paid for any period before the Minister declares the payable date and administration method in the Gazette.

An insured person may receive retirement benefit when they turn 60 and convince the Director General they have retired from regular employment, subject to section 33.

The Director General must pay death-related gratuities or pensions to dependants, parents, children, or a legal personal representative in specified cases, and may help pay burial expenses.

The Director General may distribute a survivors’ benefit to a widow, a guardian, an estate representative, or the Administrator-General, depending on the family situation and notice received.

An insured person who is physically or mentally disabled and unemployable may receive invalidity benefit under section 33.

A withdrawal benefit is payable to a female member who left employment because of marriage and does not intend to seek further work, or to an insured person who meets the childbirth-related condition.

An insured person may receive a withdrawal benefit if they are emigrating or have emigrated with no intention of returning, or if they have not been employed by a contributing employer and do not intend to be an employee around the application period. An insured person who withdraws from the Fund under sections 31 and 32 is entitled to a gratuity based on total contributions plus interest set by the Board on the actuary’s advice.

Pension, gratuity, or similar benefits are not to be granted under this Act except in specified retirement cases and except for payments under sections 28 to 32.

Employees may retire voluntarily at 55, and if they do not opt to retire then they continue in office on pensionable terms until 60.

Pension or gratuity is not to be awarded for service while an insured person is on probation, on unpaid leave, or under 18.

For pension or gratuity calculations, use the insured person’s highest pensionable emoluments from the 12 months before retirement.

Employees with enough qualifying service may receive retirement pension and gratuity benefits, subject to the Act and the stated conditions.

An insured person cannot receive more than one benefit at the same time.

This section sets when a person may get a pension after moving between contributing and non-contributing employers, and bars pension or gratuity payments while employed by a non-contributing employer.

Certain employees may be granted a retirement gratuity if they otherwise qualify for pension and have not been insured in the Fund for 15 years.

If an employee is terminated in the public interest, the President may grant benefits if they cannot otherwise be granted under the Act.

An insured person may ask the President for an exemption from certain pension or gratuity conditions, and the President may grant it if the condition would unfairly disqualify the person or category of officers.

Pensions or gratuities granted under this Act cannot be assigned or transferred, except for listed debt, liability, or court-ordered maintenance purposes.

If an insured person receiving benefits is imprisoned, the Board may pay some or all of the money to the person’s spouse or child for maintenance, and must pay it in the proportions and manner it considers proper. When the person is released, benefits are restored retroactively, subject to lawful payments already made.

The Director General decides claims for benefits at first instance and may, if asked, notify a person in writing of a determination.

Claims for invalidity benefit, maternity benefits, sickness benefit, or other medical-issue claims must be handled in the manner prescribed by regulations.

The Fund’s sources of money are listed as employee contributions, employer contributions, investment income, government funding, borrowing by the Board under the Act, and other sources such as grants and donations.

The funds may be used only for benefits, investments of the Fund, administration of the Fund, or other allowed uses that better administer the Act.

The Board may invest money only with the Minister’s approval and only in a venture it considers viable and appropriate.

The Board may use Fund money, subject to section 58, to buy land, landed property, equipment, and other assets needed to run the Board and carry out its functions.

The Board must establish, maintain, and manage a reserve account.

Certain statutory contributions and related sums must be paid into the Fund, and the Board directs how payment is made.

If the Board cannot pay an insured person because its funds are insufficient, the unpaid entitlement becomes a charge on the Consolidated Fund and must be paid from that Fund.

Excess payments into the Fund may be refunded to the employer, an insured person, or both, and the Board decides how the refund is made.

The Board may appoint inspectors, and inspectors may inspect premises and require contributing employers to produce employees and contribution-related documents.

The Board must keep an account for each insured person and record all contributions in it. The Director General must, on request, tell an insured person about the welfare of their account.

The Fund, and some related documents and payments, are exempt from stamp duty, VAT, and certain income taxes.

The Board must pass and submit budgets for approval, and the Minister can approve, disapprove, or amend them.

The Board may borrow money for the Fund, but only with the Minister’s prior approval and subject to the Minister’s directions.

The Board must keep proper accounts and records, prepare annual financial statements and reports, have the statements audited, then send them to the Minister, who must table them before the National Assembly.

Statutory contributions and other contributions payable under the Act are debts due to the Board and may be recovered by summary suit by the Director-General within ten years after they became due. If a defendant seeks leave to defend, the trial court must require a deposit equal to the amount claimed before granting leave.

If a contributing employer fails to pay a statutory contribution on time, an extra 5% of the unpaid amount is added for each month or part of a month after payment was due; the Board may remit the penalty in whole or part.

A Magistrate may allow one plaint or charge sheet to cover contributions due for more than one insured person, and the document must include a schedule with each insured person’s details.

If a contributing employer does not pay a due contribution or penalty within 30 days, the Director General or an authorized Fund officer may file a certificate in a Resident Magistrate’s court, and the certificate is treated as a court decree.

The Director General, an inspector, or another Board-approved Fund officer may start recovery and certain criminal proceedings; an authorized person may appear and conduct the case in court.

A person must give the Board three months’ written notice before starting a suit against it, and enforcement against the Board or Fund property is restricted.

A certified copy or extract from the Fund’s records must be accepted in court as prima facie evidence of its contents and of any debt due to the Fund.

If the Director General files a claim notice and the employer’s property is attached or sold, the sale proceeds cannot be distributed until the court has set aside payment for sale costs and any unpaid contributions due before the order.

An insured person’s credited sum remains the Fund’s property until paid out under the Act.

A person’s pension fund contributions are protected from execution or attachment after a judgment or order, except as allowed by the Fund’s terms, and they do not become bankruptcy assets.

This section makes it an offence for any person to use false statements, false documents, non-payment, obstruction, or other listed misconduct, and sets penalties and related court powers.

If an association of persons commits an offence under the Act, the people in apparent control may also be treated as having committed it.

Subject to this Act, the listed powers, rights, privileges, duties, liabilities, and obligations are transferred to the Fund when the Act comes into operation.

Property and assets formerly vested in the Local Authorities Provident Fund must vest in the Board from the commencement date, subject to the Act and any direction of the Minister.

Existing deeds, contracts, and similar arrangements remain effective and enforceable against or in favour of the Board after the Act starts, as if the Fund had been named or had been a party.

Certain staff and employees of the Local Authorities Provident Fund keep their appointments in force unless the appointment is revoked or a new appointment is offered.

An employee may keep a more favourable existing pension scheme in some cases, but if they do, both the employee and employer must pay contributions to the Fund at a rate set by the Board or Minister. An employee’s membership in a prior terminal benefits scheme ends when they become an insured person under the Fund.

People who were covered by the Local Authorities Provident Fund continue to keep the rights and benefits under that law, unless they are uninsured under this Act.

If a contract is unclear about who is the contributing employer, the employees are treated as employed by the first person, unless the Director General requires otherwise.

The Minister may make regulations, if the Board recommends it, about contributions, fund investments, fund administration, return forms, unclaimed moneys, exemptions or modifications, and any other necessary matters.

The Local Authorities Provident Fund Act is repealed, but some existing rights, duties, regulations, appointments, and directions continue under savings rules.

If a Board member cannot attend because of illness, infirmity, or absence from the United Republic, the Minister may appoint a temporary member. The temporary member stops holding office when the substantive member returns, and is treated as a Board member when attending meetings in that role.

Board members may serve for no more than three years and can be reappointed.

The Director-General serves as Secretary to the Board, may participate in Board proceedings, and cannot vote.

A Board member may resign at any time by written notice to the Chairman; if the Chairman resigns, the notice goes to the Minister.

The Board may appoint any person or establish any committee for matters relating to the management, investment, and administration of the Fund.

The Board may grant loans and advances to its officers and employees, subject to terms and conditions it determines.

A person is disqualified from being appointed to the Board, and must cease to hold that role, if they are of unsound mind, unable to perform the duties, convicted and sentenced to at least one year in prison, convicted of fraud or dishonesty, or declared bankrupt.

Board or committee members must disclose any personal interest in matters under discussion, and a member who has declared an interest must not take part in or be present for that decision.

The Board must meet four times a year, choose a Vice Chairman, and follow specified meeting and voting rules.