Austin Macauley 11 January 2016

Council pension scheme must be replaced, says think tank

Council pension scheme must be replaced, says think tank image

A think tank has warned the Local Government Pension Scheme will soon reach crisis point and should be replaced.

‘Excessive pension promises relative to contributions’ have left the scheme in a situation where it is ‘rapidly running out of cash’, according to a report by the Centre for Policy Studies.

It calls on the Government to switch it to a defined contribution (DC) scheme, ‘optionally including a cash balance arrangement (a form of defined benefit, DB) offered for an interim period’.

Michael Johnson, author of the report, said: ‘Putting the LGPS onto a sustainable footing requires political bravery, but doing nothing in respect of the ongoing DB pension accruals is not an option. Politicians should bear in mind that the inevitable cashflow crisis risks ceding management control to the media.’

One option to meet DB accruals, he said, would be scrap the current LGPS structure and pool the assets of the 89 council pension funds into a number of British Wealth Funds.

A spokesperson for the Local Government Association (LGA) said: ‘The Local Government Pension Scheme remains cash positive. In 2014/15 some £3.15bn was added to funds as a result of income once again exceeding expenditure across the scheme.

‘Nevertheless, the deficit position is challenging for employers especially given the financial challenges still facing councils. The LGA is working with funds and other stakeholders both directly and via the scheme advisory board on further reforms such as the pooling of assets in order to secure the long-term affordability of the scheme.’

Visit The MJ (£) to read their interview with the author of the report.

Participatory budgeting image

Participatory budgeting

Evgeny Barkov explains what participatory budgeting means and how it can reveal what citizens need.
SIGN UP
For your free daily news bulletin
Highways jobs

Principal Flood Risk Officer

Lancashire County Council
£42,683-£46,566
We have an exciting opportunity for a Principal Floor Risk Officer Lancashire
Recuriter: Lancashire County Council

Duke of Edinburgh Youth Support Worker

Essex County Council
£14597.0 - £19106.0 per month
Please note this is a part time contract - annualised hours 106 per year. Therefore the actual salary range is from £995.44 up to £1049.79 per annum. England, Essex, Harlow
Recuriter: Essex County Council

Head of Internal Audit

Kent County Council
Up to £97,000 + benefits
We now have an exciting opportunity to strengthen and shape our Audit function, as... Maidstone, Kent
Recuriter: Kent County Council

Director of Children’s Services

St. Helens Metropolitan Borough Council
circa £120,000
This is an exceptional opportunity for someone who wants to make a real difference to the children, young people and families of our Borough. St Helens, Merseyside
Recuriter: St. Helens Metropolitan Borough Council

Assistant Director, Social Care & Public Health Commissioning

Bolton Metropolitan Borough Council
c£71,000 to £89,000 per annum
Reporting to the Director of Strategic Commissioning you will lead Commissioning in the context of a developing Integrated Care System.  Bolton, Greater Manchester
Recuriter: Bolton Metropolitan Borough Council

Public Property

Latest issue - Public Property News

This issue of Public Property examines how how flexible workspaces can lead the way in regeneration for local authorities, Why local authority intervention is key to successful urban regeneration schemes and if the Government’s challenge of embracing beauty is an opportunity for communities.

The March issue also takes a closer look at Blackburn with Darwen Council's first digital health hub to help people gain control over health and care services.

Register for your free digital issue