UK - Simplification Review chief Alan Pickering has called on the government to scrap unfunded council schemes and bring them into line with current industry standards.
Pickering believes unfunded public sector schemes – such as the fire, police and teachers' plans – lack “fiscal discipline”.
Pickering - who is due to present his Simplification Review to head of the department for work and pensions' secretary Alistair Darling next month - said: “The advantage that you get from funding is a degree of discipline, because when you make the pension promise in a funded arrangement you are told the price of that pension promise.”
West Midlands Pension Fund chief pensions officer Mike Woodall said with Pickering's views should be extended to “everyone and anyone” currently in an unfunded scheme.
Woodall said that “there is a painless incremental way of [solving this], and that is to admit them into the Local Government Pension Scheme”.
The move would bring about additional benefits, particularly freeing up revenue for cash-strapped public services, he said.
Fire Brigade Union London representative Mick Shaw said pension costs currently account for up to 35% of some departments' budgets. And he added that the fire pension scheme’s liabilities were “enormous”.
Any unfunded scheme which joined the LGPS, however, would incur considerable liabilities which would affect both existing and new LGPS members.
Unison’s head of pensions Glyn Jenkins said that while, in principle, he was a supporter of such a move, the government must accept responsibility for all outstanding liabilities from the outset.
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