22 May 2009
By Vivienne Russell
The recession must not provoke ill-considered, knee-jerk changes to the Local Government Pension Scheme, John Healey has said.
The local government minister said thought needed to be given to how the LGPS will work for the next generation and beyond, but any reforms must be made for the ‘long-term viability and integrity of the scheme, not as a knee-jerk reaction to the media’s “rent-a-quote” experts’.
Healey added that pressures on the LGPS were apparent, especially with the baby-boomer generation now approaching retirement age. ‘We can be pretty sure that the workforce of the future is going to have to be more flexible, possibly working longer and demanding more personalised benefits,’ the minister told the National Association of Pension Funds’ local authority conference on May 19.
‘Designing a pension scheme which can respond to those challenges, and the new costs it produces while remaining fair to the taxpayer, is a real challenge.’
The debate on the future of the LGPS also needed to be well informed, honest and clear.
‘I see this as a role for us all – from fund managers to employers to scheme members to trade unions – to tackle the misconceptions about local government pensions,’ he said.
Healey has been a vocal defender of the LGPS as debate about the disparity between public and private sector pension provision has picked up.
Mark Brooks, an NAPF spokesman, endorsed Healey’s position. He said: ‘We’ve been working with the government and the Local Government Association with regard to… reassuring the public that the LGPS is well managed by local authority pension funds, especially the fact that funds are invested over the long term and remain solvent.’