Pension Reform - Latest News
As you are aware the Local Government Pension Scheme (LGPS) is facing significant changes in the future.
The changes can be split into two phases:
- Phase 1 short term proposals to save £900m across all LGPS Funds by 2014-15. Equating to an average 3.2% increase in employee contributions
- Phase 2 The Hutton Review: reforming the public sector pension schemes nationally to make them sustainable in the longer term.
On 22nd December a set of 'principles' were believed to have been agreed by the Local Government Association (LGA), the local government unions and the Government on how to take forward the future reforms of the LGPS. These agreements are subject to further negotiations due to take place in the New Year.
The proposed agreement consists of:
- A set of principles covering:
- The design of a new LGPS
- The future management of the cost of the scheme, and
- Governance of the LGPS
- A timetable for implementing the new scheme by April 2014
- A project outline for managing the process of agreeing, by April 2012, the 'big ticket' elements of the new scheme
A significant principle currently under discussion by union officials and LGA is the 'single step solution' to both short and long term issues which would merge the two phases into one by 2014. This would negate the need to increase contribution rates from April 2012.
In order to meet the constraints faced, a four stage approach is envisaged:
- Stage 1 - agreement on principles and timescales
- Stage 2 - agreement on 'big ticket' items
- Stage 3 - agreement on remainder of scheme design
- Stage 4 - agreement on mechanisms and assurances for effective management of funds
Timetable
Nov/Dec 2011 - discussions on stage 1
Jan to April 2012 - discussions on stage 2
April to September 2012 - communication programme and drafting of regulations
April to November 2012 - discussions on stages 3 and 4
September 2012 to March 2013 - consultation on new scheme regulations
March 2013 - commencement of scheme valuation
October 2013 - initial valuation results
October 2013 to March 2014 - implement new scheme
April 2014 - new scheme in place
This is just a summary of the information available with regards to recent talks and agreements. For more detailed information and full details of the principles, stages and timetables, please follow the link to the LGA websites.
We will post more updates as we receive them.
Updated Jan 2012
Wiltshire Pensions Fund, County Hall,Trowbridge, Wiltshire, BA14 8JN.
© 2007 Wiltshire Pension Fund.