Pension Committee 27/6/2011 – Part 4 – Local Government Pension Scheme Reform

There was concern regarding the local government scheme. Averaging 3.2% of income the low paid would be protected, but the middle and higher earners were at risk of opting out which would damage the funding arrangements. At 4.21 the Local Government Employers Organisation had written a letter to the Minister. What was carried forward from the Hutton report was outlined on page 41. The local government response was that there should not be full protection, not tied into final salary. Hutton and the government had counted on membership accrued under the old scheme in calculating final pay. At 4.28 was referenced an important issue the judicial review over the change from RPI (Retail Prices Index) to CPI (Consumer Prices Index) change. This case had been brought by the trade unions and would be going to the High Court in July. The Public Accounts Committee had produced a report on the last changes from 2007/2008 which was in a separate report. There were risks to funding following the outcome of the judicial review, which would impact the levels of deficit and the employer’s contribution levels as set out in the detail report.

Cllr Smith asked about when the judicial review started on the 6th May would reach a decision. The officer answered that it would be considered in July, whether it was quick or not he was unsure. However when the trade unions had launched a challenge to the 85 year rule it had been turned down quite quickly.

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