1. “fairness” in that the value of benefits is built up throughout a career based on earnings rather than determined by final salary.  The outcome is, those on more stable earnings “gain” and those with above average earnings growth, particularly later on in their career “lose”.  The net effect is more gainers than losers;
   
   
2. there is less risk of adverse surprises re the cost of the Scheme;
   
   
3. it will generally reduce the value of the pensions of the better paid and increase the pensions of the less well paid, e.g. in GMPF, there would be virtually no pensions greater than £50,000 for career LGPS members with a CARE scheme.

The Panel also believes that there is merit in offering a final salary option for those employees that are prepared to pay more.

Another option considered by the Management Panel that was considered to have merit was a core defined benefit scheme up to a salary cap, thereafter a top up defined contribution scheme.  Such an approach has similar consequences to a CARE scheme.

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