The London Pensions Fund Authority has called for a new scheme to be set up to encourage low-paid public sector employees to take up local government pensions.
The LPFA is one of the UK’s largest Local Government Pension Scheme funds, with more than 77,000 members and assets of around £3.84bn.
In a ‘green paper’ outlining 27 proposals on reform of the LGPS, the pensions authority recommended accepting the switch from final salary to a career average basis.
It also proposed introducing a low-start scheme for those earning less than £7,495 a year, free of employee contributions.
Last month unions urged ministers to give them more time to consider changes to the government’s plan to increase in employee contributions equivalent to 3.2 percentage points per pension member.
LPFA chief executive Mike Taylor said: “There is a lot to get done if we are to ensure a fair, affordable and most importantly fully understood LGPS is in place by 2015.
“The green paper is not intended as a single blueprint for success, rather it attempts to stimulate debate concerning the key ingredients of a new LGPS and the practicalities necessary for its successful implementation.”