UK - Employee contributions to the Local Government Pension Scheme could soar by 50% under proposals put out to consultation by the government.
Major changes also include raising the age at which local authority pensions can be paid from 50 to 55, looking at whether employee contributions should be raised, and ways of introducing flexible retirement provisions.
The measures – earmarked to take effect over the next two years – are part of a raft of plans aimed at reducing the cost of running the £83bn LGPS.
Local government minister Phil Hope said: “This policy discussion paper seeks informed responses on a series of essential propositions for the LGPS designed to contribute to the retention of the scheme on a sustainable basis.”
The proposals are part of the strategy announced on July 23 which – subject to consultation – will amend the LGPS in 2004 and 2005.
The strategy proposals are likely to be introduced in two phases. Phase one will include the introduction of immediate vesting and will come into force on April 1, 2004, while phase two – which includes plans to increase employee contribution rates and to increase the normal retirement age – will take effect from April 2005.
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