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Final salary pensions 'should go'

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A majority of elected members believe that the final-salary pension both should and will not be on offer to new local government employees in five years time, according to LGC’s survey.

An overwhelming majority (69%) of councillors do not believe that a final-salary pension will be part of the benefits package on offer to new entrants by 2014, says LGC’s latest survey of elected members carried out by ComRes.

The scepticism amongst elected members about the longevity of the final salary scheme echoes that of chief executives in last week’s LGC/Liberata Future of Local Government survey, which showed 82% of chief executives predict that it would be defunct in five years time. However, 56% of chiefs backed keeping the scheme.

Lack of confidence about the survival of the final salary scheme is strongest amongst Conservative councillors (79%) with just 11% agreeing that it will still be open to new entrants in five years time.

Labour councillors were more than twice as likely (24%) to agree with the statement that the final salary scheme will still be open to local government pension scheme entrants by 2014.

The ComRes survey also shows that just over half (54%) of councillors believe that the final-salary pension should not be part of the offer for new entrants in five years’ time.

But this headline figure of 54% disguises heavy division between the two major parties. An overwhelming 79% of Conservative councillors disagreed that the scheme should be part of the offer for new local government employees compared with 14% of Labour members.

 

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Readers' comments (1)

  • There are many factors placing pressure on local government pension funds / contributing bodies presently including poor returns on investments and past inappropriate use of the early retirement route to reward senior staff, weed out under performers or manage structural change.

    However, on big factor from the past that remains relevant is the Conservative Parties poll tax. When that was introduced the funding level for pension funds was lowered below 100% to allow local authorities to raid the contributions to keep the poll tax rate down. That action, many years ago now, heralded the start of problems with pensions in local government and Conservative Councillors should be reminded of this.

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