Local government pension reform ‘requires independent commission’

19 Apr 10
An independent body should be established to bring about wholesale reform to local government pensions, a fund authority has proposed today
By David Williams

19 April 2010

An independent body should be established to bring about wholesale reform to local government pensions, a fund authority has proposed today.

The London Pension Fund Authority, one of the largest in England, says that an independent commission would ‘take the politics out’ of the issue.

Its report proposes that the commission take over the role of the communities secretary in managing reform of local government pensions to ensure the scheme remains ‘appropriate and affordable’.

The body, whose chair would be appointed by the secretary of state, would have to report to the government every year. Its board would comprise a mixture of workers, taxpayers and employers.

The commission’s remit would be to draw up and manage a scheme that would be effective for pensioners, and affordable for taxpayers. It would decide whether payments should be based on final salaries, career average salaries, or contributions, and would also decide on the retirement age for local government workers.

Local government pensions are funded, unlike other public sector schemes. But LPFA chief executive Mike Taylor said: ‘It is becoming increasingly evident that even this scheme must adapt in the face of growing pressures around longevity and public concern over long-term costs.’

The LPFA administers a £3bn fund, which provides pension benefits to former employees of several London boroughs, the now defunct Greater London Council and Inner London Education Authority, and around 200 not-for-profit organisations.

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