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LGPS 2014 Update: Proposed Scheme Changes & Pension Reform Overview

Learn about the LGPS 2014 update, key changes, contributions, benefits, retirement options, and protections. Get involved in the November 30th Day of Action and understand the 'December Principles' for union negotiations. Find more information at www.lgps.org.uk.

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LGPS 2014 Update: Proposed Scheme Changes & Pension Reform Overview

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  1. Local Government Pensions Update Proposed New Scheme: LGPS 2014 GMB Presentation

  2. Background • Coalition’s 3 fold attack: • Change to pension indexation from RPI to CPI • 50% increase in member contributions to the LGPS through the Osborne Pension Tax • Hutton report advocating increased retirement ages and reduced benefits • Talks started across the public sector with government proposing 1/100th accrual rate for all public sector schemes (except their own which remains 1/40th) • GMB campaign to distinguish LGPS due to real risk of mass opt outs • November 30th Day of Action • ‘December Principles’ for Union-LGALGPS negotiations agreed by government

  3. LGPS Negotiations

  4. Contributions

  5. Benefits I • Defined benefit career average scheme • 1/49th accrual and CPI revaluation • Individual pension age linked to state pension age (minimum age 65) • Contributions and pensions based on actual salary (inc overtime) • Contribution flexibility with 50/50 option • Outsourced members to retain membership of LGPS

  6. Benefits II 50/50 section of the LGPS 2014 is for members who would otherwise opt out of the LGPS • While in the 50/50 section, members: • Contribute half the main scheme rate (on average 3.25%) • Build up pension with a 1/98th accrual rate

  7. Retirement • No scheme retirement age in LGPS 2014 • Members can retire at anytime after 55 • Pension taken before the individual’s state pension age will be reduced; pension taken after will be enhanced • Future changes in state pension age will apply to all service in the LGPS 2014 (excluding protected service built up before April 2014)

  8. Protection • All service before April 2014 is protected - linked to final salary and existing retirement age • Rule of 85 transitional protection will be honoured • ‘Better of’ calculation for members aged 57 – 59 when the new scheme starts

  9. Further Information www.lgps.org.uk • Detailed Guides to New Scheme • Frequently Asked Questions

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