Local Government Pension Scheme

hyubh

MARTYM8` wrote: »

So the London set up is unusual - in having so many funds.

Yes. To me there's an argument for investigating the consolidation of London funds (which wouldn't necessarily focus on assumed cost savings) independent from consolidating LGPS funds more generally, many of which are already substantial by private sector DB standards yet with added complexities to do with the employer situation.

The one advantage of separate funds is that when you move employer you can leave your benefits with the old employer as deferred benefits. So it gives you more options - particularly if your new job pays less and most of your pension is pre 2014 final salary based.

That's incorrect - from the employee point of view the scheme regulations hold the LGPS to be singular, meaning aggregation rules apply ignoring fund boundaries. As such, before April 2014 the default was unaggregated benefits with a right to combine, whereas since April 2014 the default is aggregated benefits with a right to keep separate (ignoring transitionary rule complications).

chiefie

hyubh wrote: »

Minor quibble, but the last one was in 2013, making the next one 2016.



That's what the pension funds are for, one would hope...!



They will have to pay the rates that the actuaries come up with - usually the '20%+' aspect comes from when employer rates were well under less than half that, i.e. it's trying to make up lost ground.



If you're talking about the Telegraph piece I think you are, that's what Boris Johnson was actually calling for:

http://www.telegraph.co.uk/finance/personalfinance/pensions/11142293/A-Citizens-Wealth-Fund-would-create-billions-for-investment.html

Notice in the process he manages to confuse how many (all?) the non-LGPS schemes he listed or alluded to are trustee not statutory ones, and as such, would require the government to take over and nationalise them first...

Just a minor quibble back. Local government won't be able to pay more regardless of what the actuaries say - they will go bust and/or be forced into regional government to cut costs. Unless of course the unions agree to a move to cheaper pensions again which of course they should as its just common sense that these pensions are unaffordable. The only way forward is to shut the DB pension schemes and start DC schemes, but the employers will still have to subsidise the old DB schemes. It's not rocket science it just can't survive regardless of what unison think.

hyubh

chiefie wrote: »

Just a minor quibble back. Local government won't be able to pay more regardless of what the actuaries say

Wrong, they will be paid. Are you seriously suggesting scheduled bodies will start defaulting on their pension commitments in the foreseeable future? Such an eventuality would be completely unprecedented.

but the employers will still have to subsidise the old DB schemes.

Exactly.

chiefie

hyubh wrote: »

Wrong, they will be paid. Are you seriously suggesting scheduled bodies will start defaulting on their pension commitments in the foreseeable future? Such an eventuality would be completely unprecedented.


What I am suggesting is that local government is undergoing unprecedented grant cuts along with pension increases. So many of them have outsourced services there is nowhere else to cut from. So I can see a time when yes the gold plated DB standard pension will have to end. This will force them also to put all the money into one fund to save on costs. But no I can't see them defaulting just closing.

System

Hi

Well for those that are 100% (or close to) funded the employer contribution is 0%.

Therefore some employers had plans in place to achieve fully funded staus, and when those plans come to fruition Council Tax bills could drop accordingly.

cattermole

Yes you can do flexible retirement it is entirely dependent on the LG Employer agreeing to it and as said there should be a policy on it.. You can draw you main pension and continue to do the same job at less hours the original contract ends and a new one starts on same conditions with continuous service benefits such as holiday entitlement, sick pay.

It is only really worth taking flexi retirement if you are 60 and meet the 85 year rule under old scheme so there is no forfeit of pension.

You can also rejoin pension scheme and start to build up a second pension.

Your wife should also be able to log in and register online with her LGPS Provider and also should get an annual statement of benefits.

hyubh

chiefie wrote: »

So many of them have outsourced services there is nowhere else to cut from.

Outsourcing isn't really synonymous with 'cutting' - money's still spent, it's just spent on a contractor rather than employees. Although, it does have implications for the pension fund, yes (i.e. the fund is matured quicker, if in a somewhat delayed fashion given 'Fair Deal').

So I can see a time when yes the gold plated DB standard pension will have to end.

That is very different to your previous claim that 'Local government won't be able to pay more regardless of what the actuaries say'.

AlanP_2

chiefie wrote: »

What I am suggesting is that local government is undergoing unprecedented grant cuts along with pension increases. So many of them have outsourced services there is nowhere else to cut from. So I can see a time when yes the gold plated DB standard pension will have to end. This will force them also to put all the money into one fund to save on costs. But no I can't see them defaulting just closing.

Some authorities have stopped outsourcing as it would cost them more to fund pension liabilities to existing pensioners and "retained" staff than they would save via the outsourcing contract.

There is a tipping pint where if you have decreasing employee contributions but increasing liabilities the employer cost goes up and outweighs any cost saving benefits.