The Local Government Pension Scheme (LGPS) will not be sustainable in the future if it continues as it currently exists, according to the chair of the Chartered Institute of Public Finance & Accountancy’s pensions panel.
Pete Moore, also finance director at Lincolnshire CC, told the LGC Investment Seminar that he was concerned about the pension scheme, in part because of the financial strains on local government.
“I don’t think the existing scheme is sustainable in the future,” he said.
“The pension scheme and the contributions that local authorities must make must be sustainable in the future, and we do need to build in resilience – not just three, four years ahead but potentially 10, 15 years ahead.”
While he said that the resilience of local authorities did not yet imperil any pension funds, “it is a risk in the context of the other demands placed on local government”.
Jeff Houston, secretary to the Scheme Advisory Board for England and Wales, also said the outcome of the ongoing McCloud court case could impose further costs on the LGPS.
The case concerns transitional protections put in place for members of the judicial and firefighter pension schemes, which broadly applied only to those within 10 years of normal pension age on 1 April 2012.
The Court of Appeal ruled in December that the protections counted as unlawful age discrimination. The government is currently seeking an appeal at the Supreme Court.
Should the ruling stand it would mean that the LGPS must provide a remedy for its members negatively affected by transitional protections, Mr Houston said.
An answer to this case is expected sometime next year, according to Mr Houston, who added that it would be a “good excuse to look at the whole scheme again” if it went against the government.