UK - Lane Clark & Peacock (LCP) has called on private companies and charities to take part in the government consultation on the Local Government Pension Scheme (LGPS).
The consultation relates to the 'Fair Deal' rules which state, when employees are transferred out of local authority employment to a private company or charity, which takes on local authority services such as refuse collection, school catering or carers, the new employer must provide employees with the same pension provision as the Local Government Pension Scheme (LGPS).
According to Bart Huby, head of public sector outsourcing at LCP, there are two ways companies can do this. They can use their own pension scheme with the same benefits, or there is an option allowing them to stay in the LGPS.
Under this option, the new employer has its own section of the LGPS, called an admitted body, and has admitted body status (ABS).
LCP wants outsourcing contractors to use the current government consultation to influence forthcoming decisions on the operation of the admitted body status (ABS) provisions in the LGPS.
Huby said: "This is the first full-scale review after nearly a decade of operation of the existing ABS provisions, and we strongly advise contractors, from both the commercial and not-for-profit sectors, to express their opinions and influence future developments."
Huby noted the government had recognised changes needed to be made, as the existing legislation and guidance often led to considerable uncertainty for contractors, and in several cases had resulted in large extra unanticipated costs from lump sum payments for deficits in pension provision at the end of the outsourcing contract.
The government is considering a range of options, and LCP believes the introduction of 'pass-through' as standard would be the ideal result for many contractors; removing pension risk from the bidding equation.
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