UK - The latest round of valuations at the Local Government Pension Scheme have sparked fears that council employers will pay more for their workers' pensions.
Average contribution rates have risen by 1% and 3% respectively at two of the more healthy schemes, Tameside and the London Pension Fund Authority. The rates at these two schemes now stand at 9% and 12%.
Other schemes disclosing increased rates include the Cumbria pension fund, where rates increased 0.7% to 14.7%.
West Midlands has bucked the trend, by showing an increased solvency rate of 1.5% at the same as decreasing contributions for its major employers by an average of 1.4%.
West Midlands Pension Fund chief pensions officer Mike Woodall said: “Because we realised that the market was over-priced in 1998 we put a reserve in to cover the majority of any anticipated falls. Also our employers are giving detailed consideration to the financial implications of early retirement before approving them.”
The Tameside scheme also said that it was able to reduce contribution rates further to an average of 7.9% from 8.8% last year. But this figure included some employers who were paying reduced contributions for early retirements.
Valuation results so far show that West Yorkshire is the most solvent scheme and the London Borough of Newham has the lowest valuation rate. Full valuation figures of all local authorities will be released next month.
By Jonathan Stapleton
HMRC has confirmed providers operating relief at source pension schemes can continue to collect automatic tax relief at a basic rate of 20% under new Scottish Income Tax rules.
The Pensions Regulator (TPR) is seeking "improved" powers to set a schedule of contributions in defined benefit (DB) schemes in the government's upcoming white paper, it has revealed.
New regulatory rules which require providers and advisers to produce annuity illustrations will not solve the problem of consumer detriment as they are "fundamentally" flawed, according to Retirement Advantage.
Paul Budgen is set to join financial technology and auto-enrolment (AE) firm Smart Pension as director of business development.