Archived decisions

204. LOCAL GOVERNMENT PENSION SCHEME.

1. This report brings to the Council's attention changes which have taken place or which are being proposed in relation to the Local Government Pension Scheme (LGPS).

2. The first phase of changes to the LGPS commenced on 1 April 2004. These cover a range of issues several of which are welcome, eg the requirement for Pension Funds to prepare, publish and maintain a Funding Strategy Statement by 31 March 2005 which actuaries will be required to take into account when setting employers' contribution rates. The Panel's concerns about changes to the Internal Dispute Resolution Procedure, which may lengthen the process rather than streamline it, have been ignored, however regrettably in other pensions matters administratively more complex and costly processes have been introduced.

3. The Panel has also commented following the opportunity to respond to draft Regulations on Phase II of the Government's planned changes to the LGPS. These concerned phasing out the 85 year rule under which, currently, employees can retire at 60 with full benefits provided that, added together, their length of service and age is at least 85 years: this will be phased out so that all employees will have to work until they are 65. Other issues concerned the earliest age from which benefits can be paid; flexible retirement, redundancy and employees' contributions. In respect of the latter, the Panel consider these should increase to 7% so that employees contribute more substantially towards the cost of increased longevity.