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.

Overcoming the barriers to Commercial Card use image

Overcoming the barriers to Commercial Card use

Want to reap the benefits of Commercial Cards but coming up against some challenges? James Sykes, Head of Commercial Cards, Lloyds Bank and David Legg, Head of Corporate Card Products, Lloyds Bank, discuss how the payments industry is helping organisations unlock their true value.
SIGN UP
For your free daily news bulletin
Highways jobs

Senior Project Manager

Leicestershire County Council
Up to £50,823 per annum
The role of this post is to oversee the project management, development and implementation of the County Council’s Major Transport Projects.. Leicestershire
Recuriter: Leicestershire County Council

Programme and Change Delivery Manager (Spatial Planning and Urban Design)

London Borough of Richmond upon Thames and London Borough of Wandsworth
£43,833 - £53,115 Depending on skills and experience
Are you a change delivery manager with expertise in England’s local government spatial planning and urban design sector? Wandsworth, London (Greater)
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Early Years Practitioner

The Royal Borough of Kensington & Chelsea Council
£26,544 - £30,618 per annum pro rata
This is a diverse area and we have high aspirations for all our children, starting with... Kensington and Chelsea, London (Greater)
Recuriter: The Royal Borough of Kensington & Chelsea Council

Programme Manager - Association of Directors of Children’s Services

City of York Council
£50,000 to £60,000 pa
This role will help to shape an annual SLI work plan and variously oversee, facilitate, commission or directly deliver and... York, North Yorkshire
Recuriter: City of York Council

School Wellbeing Worker

City of York Council
£27,614 to £30,602 per annum
The role will involve providing schools with consultation and advice, training, direct work in... York, North Yorkshire
Recuriter: City of York 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