By Vivienne Russell
16 October
Local government employees need to take a fairer share of pension scheme costs, the chief executive of the London Pensions Fund Authority has said.
In a speech to the National Association of Pension Funds on October 16, Mike Taylor said there was a need for a ‘proactive and constructive debate on the future of public services pensions’, in particular the local government scheme.
‘Employer or council taxpayer contribution rates currently take all the strain of increasing liabilities in the Local Government Pension Scheme. This situation cannot continue and employees must now bear a fair share of the increasing costs,’ Taylor said.
‘We should strive to balance the costs between employees and employers to increase the level of certainty. Rather than increased costs falling wholly on the employer and taxpayer, we could introduce fixed percentage cost sharing, and allow employees to top up.’
But the debate should be grounded in fact and leave behind the prejudices and misconceptions that currently distort the argument, he said.
“Gold-plated public sector pensions are a myth,’ Taylor told the conference.
‘Pensions, per se, are not unaffordable, but increasing longevity might be.’
A phased increase in the retirement age towards the age of 70 would go a long way towards securing some long-term sustainability, he suggested.
Shifting the LGPS away from a final-salary basis and on to a career-average one would be much fairer for the vast majority of employees.
16 October
Local government employees need to take a fairer share of pension scheme costs, the chief executive of the London Pensions Fund Authority has said.
In a speech to the National Association of Pension Funds on October 16, Mike Taylor said there was a need for a ‘proactive and constructive debate on the future of public services pensions’, in particular the local government scheme.
‘Employer or council taxpayer contribution rates currently take all the strain of increasing liabilities in the Local Government Pension Scheme. This situation cannot continue and employees must now bear a fair share of the increasing costs,’ Taylor said.
‘We should strive to balance the costs between employees and employers to increase the level of certainty. Rather than increased costs falling wholly on the employer and taxpayer, we could introduce fixed percentage cost sharing, and allow employees to top up.’
But the debate should be grounded in fact and leave behind the prejudices and misconceptions that currently distort the argument, he said.
“Gold-plated public sector pensions are a myth,’ Taylor told the conference.
‘Pensions, per se, are not unaffordable, but increasing longevity might be.’
A phased increase in the retirement age towards the age of 70 would go a long way towards securing some long-term sustainability, he suggested.
Shifting the LGPS away from a final-salary basis and on to a career-average one would be much fairer for the vast majority of employees.
