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LGPS reforms still awaiting Whitehall sign-off

By Richard Johnstone | 2 November 2012

The government has still not approved proposed reforms to the Local Government Pension Scheme after nearly six months of negotiations, trade unions and council employers have revealed.

Both unions and the Local Government Association yesterday set out their plans for scheme governance and cost management in the new LGPS, intended to start in April 2014.

The unions – Unison, Unite and GMB – and employers said they have had ‘extensive and detailed discussions’ with government since outline agreement on reform was reached in May. However, final sign off from government has not been reached.

Despite this, the unions and employers have outlined what the ‘essential elements’ of cost management will be in the new scheme. These include the creation of a national LGPS board made up of employers, members, the government and professional bodies.

The remit of the board would be to extend best practice, increase transparency, co-ordinate technical and standards issues and provide an effective liaison with regulators. It would also help manage the future cost of the scheme and explore effective improvements in value for money in the areas of administration and investments.

The arrangements also propose that the cost of the scheme be measured at valuations every three years, taking into account variations such as membership changes. Where there is a movement of more than 2% of scheme cost in either direction the Secretary of State for Local Government will be obliged to take action to close it, which could include increasing contributions.

The unions and employers added that work on the draft regulations to implement LGPS 2014 had ‘taken longer than initially envisaged’. The statutory consultation on the plans had been due to due start this autumn, but will now be put delayed until the end of the year.

However, the parties added the delay ‘will not change the basis of the agreement reached and we can confirm that the regulations will set out the scheme consulted on in the summer’.

Sir Steve Bullock, chair of the LGA’s Workforce Board, said employers remained ‘absolutely committed to the agreement reached earlier in the year with the unions’.

He added: ‘The reforms we jointly propose are fair to workers and affordable to the taxpayer. They should be adopted in the swiftest possible time to deliver certainty to both pension scheme members and employers.’

Unison’s head of local government Heather Wakefield said the statement affirmed that proposals for the LGPS would be issued as draft regulations by the end of the year.

‘The joint proposals put forward improved governance of the LGPS at local fund and scheme level, and detailed proposals for managing the cost of the scheme in the future,’ she said.

‘While these proposals are still subject to discussion, we hope that an agreement with the government can be reached in the near future.’

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