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WORK LIFE-NEW LOOK LGPS

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In this column Charles Nolda recently referred to the DTLR's 'stocktaking' exercise on the Local Government Pension...
In this column Charles Nolda recently referred to the DTLR's 'stocktaking' exercise on the Local Government Pension Scheme (LGC, 19 October). This produced a heartfelt response from a pensions manager bemoaning the fact the scheme might be reviewed again (LGC, 26 October).

But the scheme has to be seen in the wider context of local government, both as it now is and as it is likely to be in the future. With this in mind, the Society of Chief Personnel Officers has submitted a paper on the human resource dimensions of the issues to the DTLR.

In essence, SOCPO believes the pension scheme was developed for another time - a time when most members of the scheme were men, worked full-time, and expected to stay employed by a council for the whole of their career.

This is no longer the case, and the society believes the time is right for an in-depth look at the scheme. The reasons for this include uncertainty about the future size and nature of the local government workforce, the increasing significance of the cost of pensions in overall expenditure, and the growing movement of staff between councils and other parts of the public and private sectors.

The latter factor leads SOCPO to wonder whether a single pension scheme should be developed for all those delivering public services. This would facilitate transfer between employers and recognise changes in staff demography and needs. This might lead to the scheme being restricted to existing members with others joining the new scheme.

Regardless of whether such a far-reaching change is desirable, or even possible, SOCPO argues for consideration of alternatives to the final salary arrangements.

Thought should be given to staff being given greater choice over the salary basis for their pension calculations. This system could allow staff to choose, perhaps on an annual basis, the level of their contribution, with the total amount contributed going towards buying benefits.

It is understandable that pensions practitioners are frustrated at the prospect of more change, but the stakes are too high for the above ideas to be dismissed out of hand.

www.socpo.org.uk

Tim Rothwell

Managing director, GWT Rothwell

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