Pension scheme for Parish Council

chairpc44

I'm a (volunteer) councillor for our Parish Council and we're looking for financial advice about which pension scheme to offer our Clerk level staff. Currently NEST, but the Local Government Pension Scheme is being considered. 
Can anyone suggest how to get independent expert advice on costs, benefits and liabilities? 

JoeCrystal

LGPS is vastly more expensive then NEST for the Parish Council. Employers contributions would easily be 20 percent or more. Just make sure to ban transfers in in case some new starter want to transfer in a large DC pension in to get a generous pension for life. 😀

Don't forget that Parish Council will be expecting to pay strain costs on various situations plus all bells and whistles such as Ill health retirement as well.

Benefit wise, very generous for the members tbf.

Liabilities wise, the council will be on the hook until the final pensioner die compares to one off cost every month into NEST.

hyubh

chairpc44 said:

I'm a (volunteer) councillor for our Parish Council and we're looking for financial advice about which pension scheme to offer our Clerk level staff. Currently NEST, but the Local Government Pension Scheme is being considered. 
Can anyone suggest how to get independent expert advice on costs, benefits and liabilities? 

As JoeCrystal says, the costs are radically different. With NEST, being a DC scheme, there are no liabilities, whereas with the LGPS, being a funded DB scheme, there are.

Is there some sort of peer group you can discuss with (i.e. councillors of other parish councils) before spending money on getting advice? Also, have you approached the local LGPS administering authority for an overview on what becoming a 'designating body' in the fund would entail?

Current employer rates in the fund will be public information - look for the latest triennial valuation report on the fund's website (figures will appear as the 'the rates and adjustments certificate' in the report). That said, in entering the LGPS, you will have little control over employer rates, and zero control over employee benefits (i.e. the liabilities that cause those rates). The precise policies under which employer rates are determined can vary from fund to fund however, e.g. some might group employers of a certain type together and set a common rate for them, others will do things on a more individual basis, so depending on the fund that might be something to negotiate over (e.g. you probably wouldn't want to be grouped with a small set of fellow parish councils that have been in the fund continuously for 40 years and have accrued a substantial deficit over that time).

Marcon

chairpc44 said:

I'm a (volunteer) councillor for our Parish Council and we're looking for financial advice about which pension scheme to offer our Clerk level staff. Currently NEST, but the Local Government Pension Scheme is being considered. 
Can anyone suggest how to get independent expert advice on costs, benefits and liabilities? 

Click on parish council conditions of employment

There are various contracts of employment readily available, which will give you an idea of what other Parish Councils offer (not just pensions but salary and other benefits).

Membership of the LGPS is likely to be much more beneficial to an employee, but comes at a cost - to them and to their employer. Much depends on how much you can afford to pay (current employer contribution rate is likely to be 14% to 18% of the member's salary) and how hard you find it to attract and retain suitable employees.

molerat

Becoming an LGPS employer is pretty much writing a blank cheque.

Silvertabby

JoeCrystal said:

LGPS is vastly more expensive then NEST for the Parish Council. Employers contributions would easily be 20 percent or more. Just make sure to ban transfers in in case some new starter want to transfer in a large DC pension in to get a generous pension for life. 😀

Don't forget that Parish Council will be expecting to pay strain costs on various situations plus all bells and whistles such as Ill health retirement as well.

Benefit wise, very generous for the members tbf.

Liabilities wise, the council will be on the hook until the final pensioner die compares to one off cost every month into NEST.

Ill health retirement strain costs are covered by the LGPS, not the employer.  In theory.  In practice, an employer with a higher than average number of ill health retirees may expect their employer contribution rate (for all employees) to be raised at the periodical revaluations.

But, yes, the employer takes the hit for redundancy strain costs, which often run to many £Ks.

Not accepting transfers in from DC schemes, for the very reason you mention, is an employer discretion.  More and more employers are opting to exercise this in an effort to limit future scheme  costs.  

JoeCrystal

hyubh said:

 The precise policies under which employer rates are determined can vary from fund to fund however, e.g. some might group employers of a certain type together and set a common rate for them, others will do things on a more individual basis, so depending on the fund that might be something to negotiate over (e.g. you probably wouldn't want to be grouped with a small set of fellow parish councils that have been in the fund continuously for 40 years and have accrued a substantial deficit over that time).

I thought I have a look at my local council. You can see all parish councils in Dorset pay 22% employer contributions. It may be worth checking your local council pension annual report to get some idea what other parish councils pay or as hybh mentioned, grouped all together.

MX5huggy

I can’t believe this data is pubic in this form, easy to identify individual members of LGPS from this. 

squirrelpie

MX5huggy said:

I can’t believe this data is pubic in this form, easy to identify individual members of LGPS from this. 

Our parish council publishes all monthly outgoings, itemised, in the parish magazine. Nobody seems to care, and it's good for trust/transparency.

Marcon

MX5huggy said:

I can’t believe this data is pubic in this form, easy to identify individual members of LGPS from this. 

Follow the link I gave - there are links to contracts which include the name of the individual to whom the contract applies.

squirrelpie said:

MX5huggy said:

I can’t believe this data is pubic in this form, easy to identify individual members of LGPS from this. 

Our parish council publishes all monthly outgoings, itemised, in the parish magazine. Nobody seems to care, and it's good for trust/transparency.

...but not always great for privacy or compliance with data protection.

hyubh

Marcon said:

MX5huggy said:

I can’t believe this data is pubic in this form, easy to identify individual members of LGPS from this. 

Follow the link I gave - there are links to contracts which include the name of the individual to whom the contract applies.

Yes, because parish councils get to nominate who can join the scheme, rather than employees being eligible by right.

...but not always great for privacy or compliance with data protection.

Shockingly, you can tell with 90% accuracy that the caretaker at your local school is an LGPS member too, simply by virtue of the fact they are the caretaker of a state school. Even more surprisingly, apparently PC Plod is a member of the Police Pension Scheme, and your GP is very likely a member of the NHS Pension Scheme. And get this - both Rishi Sunak and Kier Starmer are probably members of the Parliamentary Contributory Pension Fund. The ICO should be having a field day!