Mark Conrad 22 November 2023

Autumn Statement: Hunt announces surprise LGPS plan

Autumn Statement: Hunt announces surprise LGPS plan image
Image: bleakstar / Shutterstock.com.

Chancellor Jeremy Hunt has announced a surprise target to ensure all Local Government Pension Scheme (LGPS) funds are invested in asset pools of £200bn or more by 2040.

The ambitious target goes well beyond ongoing reforms to LGPS guidance on pooling first revealed in the chancellor’s Mansion House speech earlier this year – which requires that all LGPS asset pools reach a minimum of £50bn by 2025.

But Steve Simkins, partner and public services lead at consultants Isio, said the chancellor had missed an opportunity to help councils more directly. With LGPS assets currently able to cover more than 100% of total scheme liabilities, Mr Simkins urged ministers to allow councils to use surpluses to reduce employer pension contributions.

Mr Simkins said: ‘The Local Government Pension Scheme (LGPS) is currently holding up to £100bn more than it needs to fund its pensions promises. This is a huge extra buffer that has arisen unexpectedly since last year. Utilising this now is more important than making long-term plans to pool assets by 2040.

‘Making some of this available through reduced employer contributions will make an enormous difference to local authorities and their communities. In the absence [in the Autumn Statement] of any additional funding for local government, a typical large council could reasonably save at least £20m a year,’ he added.

However, such so-called employer contribution ‘holidays’ would be deeply unpopular with council trade unions. The same issue caused structural underfunding problems across some LGPS funds in the 1990s, which took years to recover.

SIGN UP
For your free daily news bulletin
Highways jobs

Revenues and Benefits Administration Officer

West Northamptonshire Council
£26914 - £27781
The Revenues and Benefits Administration Officer at West Northamptonshire Council provides essential administrative support across the Revenues and Benefits team. The role involves managing emails, indexing documents, raising orders and supporting financi Northampton
Recuriter: West Northamptonshire Council

Strategic Commissioning Manager (Markets Team Manager)

The Royal Borough of Kensington & Chelsea Council
Negotiable
Drive real change in your community - shape the future of careDrive real change in your community - shape the future of careAt the Royal Borough of Ke England, London, City of London
Recuriter: The Royal Borough of Kensington & Chelsea Council

Social Worker - Family Finding, Adoption Mid Essex

Essex County Council
£34902.0000 - £50081.0000 per annum
Social Worker - Family Finding, Adoption Mid EssexPermanent, Full Time£34,902 to £50,081 per annum Location
Recuriter: Essex County Council

Sheltered Housing Officer

The Royal Borough of Kensington & Chelsea Council
£33291 - £34291 per annum
Support residents to live independently in safe, welcoming homes - making every day easier, safer and more connected.Support residents to live indepen England, London, City of London
Recuriter: The Royal Borough of Kensington & Chelsea Council

Team Leader

Durham County Council
Grade 8 £32,597 - £36,363
Salary
Recuriter: Durham County Council
Linkedin Banner