|
LGPS interests in England and Wales (Addressees as attached) |
Head
of Local Government and Firefighters’ Pension Schemes Division Zone
2/F8 Ashdown
House 123
Victoria Street London
SW1E 6DE Direct
line: 020 7944 5970 Fax: 020 7944 6019 Web
sites: www.communities.gov.uk 26
May 2006 |
Dear Colleague
DRAFT LOCAL GOVERNMENT PENSION SCHEME (AMENDMENT) (No 2) REGULATIONS
2006
With the agreement of Ministers, I now enclose draft amending regulations for your comments, no later than 3 July. This period of statutory consultation follows the earlier 12-week consultation on the draft Local Government Pension Scheme (Amendment) (No.3) Regulations 2005 and the detailed ongoing discussions between the key stakeholders which have been underway since the end of March. Subject to the outcome of this consultation exercise, these regulations will be made and laid before Parliament prior to the summer Recess.
Background
Consultees will recall that the Government’s Statement to Parliament on 30 March re-affirmed its commitment to secure the continued affordability and viability of the Local Government Pension Scheme, and to provide secure, equality-proofed pensions for its existing and future membership, without placing an unfair burden on taxpayers.
The
Local Government Pension Scheme (Amendment) Regulations 2006 which remove the
85 year rule from the Scheme from
The Statement, in addition, expressly invited local government employers and trades unions to begin talks to: -
· further address the protection of existing scheme members,
· consider the recycling of savings; and
· discuss the development of a more equitable scheme.
It was made clear also in the Statement that the Government was prepared to introduce further amendments, before the summer Recess, to update the regulations in the light of any agreed proposals which emerged from the talks between the trades unions and local government employers.
Proposals from the Local Government Association and the Trade Unions
Proposals from the LGA and the trade unions have now been received by the Department. Ministers have concluded, after consideration, that the essential terms of the submissions are affordable and legal and that, consequently, it would be appropriate to proceed to amend the Local Government Pension Scheme Regulations 1997 with effect from 1 October 2006, subject to consultation with all the interested parties in England and Wales.
Consultees
may wish to note the nature of the changes and their implications. The
revocation of the LGPS (Amendment) (No. 2) Regulations 2004 has continued the
provision of the rule of 85 until
The
proposed changes also extend the
At the end of this extended period of protection, it is also proposed to introduce measures to overcome the perceived “cliff-edge” relating to the current protection, which a number of individuals commented on in responses to earlier consultations. This cliff-edge resulted in different treatment between members satisfying the rule of 85 at 60 at 31 March 2013, suffering no reduction to their pension, and members satisfying the rule of 85 at 60 at 1 April 2013, who suffered a full reduction on their post 1 October 2006 service.
It
is proposed to introduce new reduction factors, to be provided by GAD, which
will apply from 1 October 2006, to those existing scheme members at 30
September 2006, who would have satisfied the rule of 85 and will be 60 by 31
March 2020. These reduction factors will
be applied on a phased basis in respect of the period of membership accruing
between
Other amendments
In
addition, a number of essentially technical clarifications need to be made to the
Local Government Pension Scheme (Amendment) Regulations 2006 introduced from 6
April as part of introducing the new HMRC tax regimes, which was commented on
by a number of individuals who responded to the earlier consultation exercise. These
amendments are intended to deliver on the matters set out in the Department’s advisory
letter of 13 April to LGPS interests in
Wider Scheme developments
Consultees
will be very aware that considerable effort is going into the costing and
design of various options for the reform of the LGPS and the development of new
arrangements for 2008. These will take
full account of the implications for the Scheme of this consultation package, and
how the cost of extending protections has resource implications for the new
Scheme. The recent Department for Work
and Pensions White Paper proposals for the reform of state pensions will of
course, also need to be taken into account in the design process.
The Government’s strategic policy for the Scheme is to provide good quality pensions for local authority workers which are affordable, viable and fair to taxpayers. The objective not to add additional burdens on council tax payers remains strongly at the forefront of Departmental thinking.
The intention remains to consult widely, in the near future, on a number of costed, realistic options for a new-look LGPS, with the objective of having modernised arrangements in place for April 2008. Subsequently, draft amending regulations are programmed to come forward for consultation, before the end of the year, as part of the development process.
Reponses
Your comments on the enclosed about regulations should be sent to Nicola Rochester Local Government and Firefighters’ Pensions Schemes Division, Department for Communities and Local Government, Zone 2/F6, Ashdown House, 123 Victoria Street, London SW1E 6DE.
Electronic responses can be sent to nicola.rochester@communities.gsi.gov.uk.
A summary of responses to this consultation will be published within 3 months of the close of consultation at www.xoq83.dial.pipex.com
This consultation follows the Government code of practice on consultations, which is attached at Annex A.
Information provided in response to this consultation, including personal information, may be published or disclosed in accordance with the access to information regimes (these are primarily the Freedom of Information Act 2000 (FOIA), the Data Protection Act 1998 (DPA) and the Environmental Information Regulations 2004).
If you want the information that you provide to be treated as confidential, please be aware that, under the FOIA, there is a statutory Code of Practice with which public authorities must comply and which deals, amongst other things, with obligations of confidence. In view of this it would be helpful if you could explain to us why you regard the information you have provided as confidential. If we receive a request for disclosure of the information we will take full account of your explanation, but we cannot give an assurance that confidentiality can be maintained in all circumstances. An automatic confidentiality disclaimer generated by your IT system will not, or itself, be regarded as binding in the Department.
The Department will process you personal data in accordance with the DPA and, in the majority of circumstances, this will mean that your personal data will not be disclosed to third parties.
Yours
sincerely,
T B J CROSSLEY
Addressed to:
The Chief Executive of:
County
Councils (England)
District
Councils (England)
Metropolitan
Borough Councils (England)
Unitary
Councils (England)
County
and County Borough Councils in Wales
London
Borough Councils
South
Yorkshire Pension Authority
Tameside
Metropolitan Borough Council
Wirral
Metropolitan Borough Council
Bradford
Metropolitan City Council
South
Tyneside Metropolitan Borough Council
Wolverhampton
Metropolitan Borough Council
London
Pension Fund Authority
Environment
Agency.
Town Clerk, City of London Corporation
Clerk, South Yorkshire PTA
Clerk, West Midlands PTA
Fire and Rescue Authorities in England
and Wales Local
Government Association (LGA)
Police Authorities in England and Wales LGPC
Employers'
Organisation SOCPO
SOLACE ALACE
CIPFA New
Towns Pension Fund
ALAMA Audit
Commission
UCEA Fire
and Rescue Authorities
Police Authorities Association
of Consulting Actuaries
Society of County Treasurers Society
of District Council Treasurers
Society of Metropolitan Treasurers Society
of London Treasurers
National Probation Service for England
and Wales Society of
Welsh Treasurers
Northern Ireland Public Service Alliance Society of
Chief Personnel Officers
Trades Union Congress
UNISON AEP
TGWU FBU
GMB Aspect
UCATT Managerial
& Professional Officers
NAPO Fire
Officers’ Association
AMICUS CYWU
Other Government Departments
GAD
DoE (NI)
SPPA
Annex A
The consultation criteria
The Government has adopted a code of practice on consultations. The criteria below apply to all UK national public consultations on the basis of a document in electronic or printed form. They will often be relevant to other sorts of consultation.
Though they have no legal force, and cannot prevail over statutory or other mandatory external requirements (e.g. under European Community Law), they should otherwise generally be regarded as binding on UK departments and their agencies, unless Ministers conclude that exceptional circumstances require a departure.
1. Consult widely throughout the process,
allowing a minimum of 12 weeks for
written
consultation at least once during the development of the policy.
2. Be clear about what your proposals are,
who may be affected, what questions are
being
asked and the timescale for responses.
3. Ensure that your consultation is clear,
concise and widely accessible.
4. Give feedback regarding the responses
received and how the consultation process
influenced
the policy.
5. Monitor your department’s effectiveness at
consultation, including through the use
of
a designated consultation co-ordinator.
6. Ensure your consultation follows better
regulation best practice, including carrying
out
a Regulatory Impact Assessment if appropriate.
The
full consultation code may be viewed at www.cabinetoffice.gov.uk/regulation/Consultation/Introduction.htm
Are you satisfied that this
consultation has followed these criteria? If not, or you have any other
observations about ways of improving the consultation process please contact :
Adam Bond, Department for
Communities and Local Government Consultation Coordinator, Room 2.19, 26 Whitehall, London, SW1A 2WH;
or by e-mail to:
adam.bond@communities.gsi.gov.uk