Wednesday, February 27, 2008

LGPS Valentine's Day message...

Like most of you, dear readers, the laying of Statutory Instruments before Parliament was not foremost in my mind on Valentine’s Day.

Indeed, commentators on this very blog took issue with my sadly cynical and unromantic attitude to UNISON’s activities on the day in question.

Little did I then know that the Government had expressed its love for local government workers with The Local Government Pension Scheme (Transitional Provisions) Regulations 2008. Regulation 9 provides some limited good news for those paying a “protected” 5% pension contribution (a small number of former manual workers) as their increased pension contributions will be phased in over three years.

For those waiting until they make the film before reading this short but snappy work of non-fiction, Schedule 2 seems to be quite important.

In a nutshell, protection of the “Rule of 85” in respect of all pensionable service for those who will be 60 on or before 31 March 2016 is preserved by paragraphs 1 and 2 of the Schedule, repeating earlier provisions (which had been increased from 2013 if you remember).

Paragraph 7 repeats what was Paragraph 6 of The Local Government Pension Scheme (Amendment) Regulations 2006 (inserted by the snappily titled Local Government Pension Scheme (Amendment)(No 2) Regulations 2006) and simply says that;

“7.—(1) This paragraph applies to a member who retires, having reached the age of 60, on or after 1st April 2016 and before 1st April 2020, and who would (but for the provisions of paragraphs 1 and 2) have satisfied the 85 year rule before the latter date.
(2) That part of his retirement pension and grant which is calculated by reference to any period of membership after 31st March 2008 shall be reduced in accordance with guidance issued by the Government Actuary.”

Happily we employ pensions experts to explain all of this, because to my simple mind this looks like a provision to apply an actuarial reduction to benefits payable in respect of all post 31 March 08 service for those retiring under 65, but over 60, between 1 April 2016 and 31 March 2020, who are currently given “tapered protection” (described on the LGPS website as follows; “If you will be aged 60 between 1st April 2016 and 31st March 2020 and meet the 85 year rule (or meet an earlier Normal Retirement Date which some members who joined the Scheme before 1st April 1998 have under previous regulations) by 31st March 2020, the benefits you build up between 1st April 2008 and 31st March 2020 will be reduced, but the reduction will not be the full amount.”)

The last we heard was that the Government were still considering whether to extend full protection of the Rule of 85 to existing scheme members who will be 60 before 1 April 2020 – so why are they laying new Regulations before Parliament in February which don’t make any change on this outstanding question.

This leaves me utterly confused about whether we have made any progress at all on one of the four “outstanding issues” identified by the Service Group Executive at the Special Local Government Conference on pensions last March – which was precisely the extension of protection of the Rule of 85. We made a great deal about the consultation on extending this protection (which was, as an objective, less than we were originally aiming for) – where has the consultation gone?

I await the next update…

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