UK - The £83bn Local Government Pension Scheme is to consider moving towards a hybrid or career average scheme for new members.
A cost-cutting consultation has been launched by the Office of the Deputy Prime Minister, which establishes local authority pension scheme policy via the LGPS.
The move follows a comprehensive stock-take review in March and the soaring cost of council pensions.
But many in local government are also beginning to question the relevance of the current LGPS to thousands of part-time or short-term workers.
Local government minister Christopher Leslie said: “The traditional model of local government employment, where workers might expect to retire after a lifetime of continuous service – in all probability at the peak of their earnings – is no longer relevant to all council employees.”
Other moves being considered include:
- Offering local government workers an enhanced benefit package in return for a higher employee contribution.- Providing mandatory annual benefit statements to members of the LGPS to assist with long-term pension planning.- Giving new employees a DC pension initially but having it revert to a DB scheme after a minimum service period, encouraging staff to stay in their job for longer.- Looking at modifying rules to allow employees to purchase additional LGPS benefits up to Inland Revenue limits.
Other suggestions include addressing the earnings cap limit for senior staff to aid recruitment.
But this move is likely to provoke outrage from unions which are already bitter over small pay increases for many of their members.
Any moves to change the LGPS would only affect new members of the 89 local authority schemes in England and Wales.
The discussion paper is available from the website of the Office of the Deputy Prime Minister – www.odpm.gov.uk.
The deadline for comments is February 14, 2003.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers