The Local Government Pension Scheme's (LGPS) structural reform must be consistent with other changes and adhere to a realistic timetable, the LGPS national advisory board warns.
The LGPS Shadow Scheme Advisory Board (SSAB) has made seven recommendations following the Department for Communities and Local Government's (DCLG) call for evidence into the scheme's future (PP Online, 3 October 2013).
Any reform "must meet the original objectives of delivering benefits to employers, local taxpayers and scheme members", the board stressed in its report.
As such, alternative methods of managing deficits should be considered, and costs, benefits and barriers of suggested solutions must be analysed, the SSAB said.
The government should also "ensure that any work being undertaken as part of the call for evidence is consistent with other strands of LGPS policy work", including the introduction of LGPS 2014 and reform of investment regulations.
The board, which is chaired by National Association of Pension Funds (NAPF) chief executive Joanne Segars, urged the government to consult on potential changes "as soon as possible", allowing DCLG and board to "agree a realistic timetable for implementing reform" by the end of summer 2014.
"Proportionate and appropriate" legislation should be introduced to provide a statutory basis for the agreed objectives and timetable, it added.
Segars acknowledged local authorities and contracting employers are currently facing a "challenging time".
She said: "The SSAB is uniquely placed to advise on the direction and smooth implementation of reform. We look forward to working closely with the minister and playing an active role in developing the outcomes to the call for evidence."
The board, which was formed to preempt the requirements of the Public Service Pension Act from 1 April 2015, will support the government by developing "a shortlist of feasible options" for deficit reduction and conducting further research into costs and benefits.
It will also prepare an "agreed baseline of data and measurements" for schemes by the end of the year.
In November, DCLG confirmed it appointed Hymans Robertson to conduct research into three potential structures for the LGPS (PP Online, 29 November 2013).
The department and the Cabinet Office have highlighted three alternative models for analysis: a single, national investment fund; a small number of "closely aligned" investment vehicles; or a merger of the existing 89 funds in England and Wales into a smaller number (PP Online, 22 October 2013).
Nearly every trustee is confident of the next stage in their scheme’s strategy, despite almost an equal number being forced to consider replacing plans within the prior 12 months, according to research by Barnett Waddingham.
Companies could be overstating their pension liabilities by up to £60bn due to their life expectancy assumptions, according to XPS Pensions Group.
Defined benefit (DB) schemes that provide GMPs must revisit and, where necessary, top-up historic cash equivalent transfer values (CETVs) that have been calculated on an unequal basis, a landmark court judgment said last week.
Regulators must act now to impose some "proper regulation" to stop another defined benefit (DB) transfer advice disaster, saysTim Sargisson.
Opportunities for defined benefit (DB) schemes to pursue investment approaches that help repair the UK’s economy cannot stand in the way of improving member outcomes, Aegon says.