A forum for open discussion on communities and local government policy.

New-look Local Government Pension Scheme (LGPS) post-consultation

Following the overwhelming success of the first LGPS discussion forum, we have launched a second thread. The statutory consultation has now concluded and following the laying of the Regulations in April 2007, the new-look scheme will come into force on April 1 2008.

All documents concerning the LGPS are available via the links on the scheme’s website.

Primarily, this forum will give you the opportunity to talk to other members across England and Wales and to pose questions about scheme reforms. However, as with the previous forum, it is not possible to comment on individuals’ pensions queries – the forum is designed for discussion about the new-look LGPS coming into force on April 2008. If scheme members have specific, personal queries, they should approach their local authority’s pension manager.

In the six months (until 28 September 2007) that this forum will be active, officials will answer questions on aspects of the LGPS (Benefit) Regulations where appropriate. Although included in the FAQ section of the LGPS website, such queries may include:

  • What is contained in the Regulations?
  • What happens next?
  • Who can I talk to about my pension?

We hope that you enjoy participating in this forum and look forward to reading your comments.

previous discussion

Reply to July 2007 Posts

Posted by Charlotte Hine-... on 02/08/2007 - 15:49

Derickherd, 02.07.07 and 31.07.07 raises the issue of ill-health retirement provisions in the both the current and future LGPS. The pre- and post-1 April 2008 ill-health retirement provisions are markedly different. In the existing scheme, ill-health retirees must have a minimum of 5 years’ membership of the LGPS. Their benefits are then enhanced up to a maximum equivalent of 20 years’ service. In the new scheme, the qualifying period is 2 years’ membership, in either or both schemes. Ill-health retirees’ pensions will be enhanced to make sure that their benefits are the same as if they had retired at 65.

Benefits are calculated as any pension would normally be calculated for members that have membership of both schemes, i.e. all benefits accrued up to and including 31 March 2008 will be fully protected, including the lump-sum and added to benefits accrued after this date on the new rates. Both figures will be caluculated in relation to your pay at the time of retirement.

Once again the issue of losing accrued benefits such as lump-sums has been raised. peebee, 06.07.07 has correctly interpreted the regulations as regards members who are entitled to two lump-sums due to having accrued membership in the current and future LGPSs. As has been previously stated, all benefits accrued in the existing scheme before 1 April 2008 will be protected. There is no question of LGPS members losing ‘banked’ benefits. In the new scheme, rather than receving an automatic lump-sum, members can opt to commute accrued pension benefits at a rate of £1 for every £12 of tax-free lump-sum up to a maximum of 25% of the capital value of their benefits. If members have accrued membership of both schemes they will be entitled to their ‘frozen’ lump-sum and commuted lump-sum, both of which will be calculated using their final salary at the time of retirement.

Robert Smith, 24.07.07 asks for clarification on the ability to retire early from employment in Local Government. The option to retire, with employers’ consent under the Rule of 85 before members reach aged 55 is only possible until 2010. From then on all members are only allowed to retire earlier than the normal retirement age of 65 if they are aged between 55 and 65. It is not possible to retire earlier than aged 55. Members satisfying the Rule of 85 conditions and aged 55-60 must obtain permission from their employers before they can receive an unreduced pension. No such authorisation is required for members aged 60-65 if they wish to retire early. All accrued benefits will be protected for members wishing to retire on these grounds before 1 April 2016. Those fulfiling the Rule of 85 requirements and having employer permission where necessary between 1 April 2016 and 31 March 2020 will have an actuarial reduction applied to the benefits they accrue in the new scheme whilst all pre-1 April 2008 benefits are fully protected.

Finally, we apologise for the lack of response to the four posts over the last month until now. The decrease in site traffic hopefully indicates that our message is becoming clearer and the common questions are being answered. Don’t forget to look back at the previous moderator posts as many of these do answer all the questions that many of you have posted to date.

Thanks for your continued contributions to this discussion forum.

Charlotte and the LGPS Team

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