Laura Sharman 26 September 2017

Charities at ‘risk of collapse’ due to unaffordable LGPS debt

Charities should be allowed to exit the Local Government Pension Scheme (LGPS) to stop them building up unaffordable debt, according to a new report.

ICAS is calling on the Scottish Government to change the law so charities can exit the LGPS without having to pay an expensive cessation debt.

It argues that being forced to stay in the scheme risks building up pension liabilities that they cannot afford. It also adds that if the last employee in the scheme retires, charities can be faced with an unplanned debt putting it risk of collapse.

‘We believe that urgent action is required to reform LGPS to enable charities to exit the scheme in a controlled and affordable manner,’ said Christine Scott, head of charities and pensions at ICAS.

‘This is not only in the interests of the charities affected and their service users but also the Scheme funds and other employers. It cannot be in the public interest that the vulnerable people these charities serve risk losing access to those services in the event of an insolvency.

‘It makes no sense for charities to keep building up pension liabilities beyond the point they are affordable and the longer the current situation persists the greater the financial impact will be when debts finally crystallise.’

ICAS is also calling for LGPS funds to provide greater flexibility in the payment terms offered when exit debts are triggered, and for cessation debts to be calculated on a more ‘realistic’ basis.

SIGN UP
For your free daily news bulletin
Highways jobs

Assistant Director - Prevention and Service Development

North Yorkshire County Council
£86,252- £98,275 plus relocation support (up to £8,000)
Come and Join Team North Yorkshire! County Hall and around the county, including from home
Recuriter: North Yorkshire County Council

Principal Transport Development Planner

Suffolk County Council
£39,759 per annum (pro rata if part time)
A great opportunity to join the Suffolk County Council's Transport Strategy Team as a Principal Transport Development Planner. Suffolk County Council, Ipswich IP1 2BX
Recuriter: Suffolk County Council

Senior Manager - Asset and Network

Cheshire West & Chester
£56,593 - £62,792
This is a brand-new role developed out of our vision for the future of the recently established Transport and Highways directorate. Chester, Ellesmere Port, Winsford
Recuriter: Cheshire West & Chester

Provider Development Manager

North Yorkshire County Council
£50,183 - £58,379 plus relocation support (up to £8,000)
Come and Join Team North Yorkshire! County-wide – Hybrid
Recuriter: North Yorkshire County Council

Head of Integrated Care

North Yorkshire County Council
£60,567 - £69,001 plus relocation support (up to £8,000)
Come and Join Team North Yorkshire! North Yorkshire
Recuriter: North Yorkshire County Council

Partner Content

Circular highways is a necessity not an aspiration – and it’s within our grasp

Shell is helping power the journey towards a circular paving industry with Shell Bitumen LT R, a new product for roads that uses plastics destined for landfill as part of the additives to make the bitumen.

Support from Effective Energy Group for Local Authorities to Deliver £430m Sustainable Warmth Funded Energy Efficiency Projects

Effective Energy Group is now offering its support to the 40 Local Authorities who have received a share of the £430m to deliver their projects on the ground by surveying properties and installing measures.

Pay.UK – the next step in Bacs’ evolution

Dougie Belmore explains how one of the main interfaces between you and Bacs is about to change.