John Healey has spoken of his faith in the long-term viability of the Local Government Pension Scheme but warned that fund mergers and shared administration arrangements may be necessary.
The local government minister told the National Association of Pension Funds annual conference in Warwickshire that a myth-busting debate on the future of the scheme was needed ahead of next March’s revaluation.
Mr Healey said regular media reports of public-sector pensions “black holes” to be filled by council tax payers were wide of the mark, and that calls to shift to the kind of defined contribution schemes now prevalent in the private sector was not a safe option.
Mr Healey said many local government workers could end up being dependent on benefits if their defined contribution pensions left them without enough to live on because of market volatility.
“I see [defined contribution] schemes as cheap shot pensions for public service staff; and a bogus bargain for councils and taxpayers,” he said.
“We need as well to take a look at whether we can cut out duplication by sharing administration arrangements, or even consider the pros and cons of merging some of the funds,” he said.