But then in July, Eric Pickles, the Secretary of State for
Communities and Local Government (the DCLG) asked
the employers’ group (The Local Government Group)
to meet with trade unions, to see if there were other
ways of bringing down the overall cost of the LGPS. This
was suggested because the LGPS is a funded scheme
(see glossary below), which means it works in
a different way to the other public sector schemes, like
the Police or the Civil Service schemes.
Constructive discussions were held between the
employers and unions but so far it has not been
possible to reach agreement. So in the absence of any
agreement, the Local Government Group has now
written to Eric Pickles with its own proposals.
 Full copy of the letter to Eric Pickles 
We’ve shown what the Local Government Group
suggests below - remember, these are just
proposals, which the Government could accept or
reject.
- Deferring any short term plans to increase contributions – in other words leaving contributions as they are for 2012 & 2013, but then bringing in various changes from 2014.
- No change in contributions for scheme members earning less than £15,000 (full-time equivalent).
- An increase of 1.5% for those earning between £15,000 and £21,000.
- An increase of 2% to 2.5% for those earning over £21,000.
- Recognising that some employees may not be able to afford an increase in their contributions, an alternative choice for employees would be to maintain contributions at existing levels and have lower pension benefits from April 2014.
- Increase the normal age of retirement from 65 to 66 for benefits earned after April 2014 with benefits earned before then keeping a normal pension age of 65. This wouldn’t force people to work till 66, but would mean reduced benefits for those choosing to retire sooner.
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The DCLG are considering the employers’ proposals
and should publish details of proposed changes at the
end of September. A 12 week consultation exercise will
follow enabling employers, trade unions, administering
authorities and others to comment, during which time
the LG Group and the unions intend to continue their
discussions.
If the LG Group’s proposals are adopted, we would see new scheme rules published in early 2012, but setting out changes which would only apply from 2014.
And remember, whether the Government adopts the LG Group’s proposals, or something different, this will not affect what you have built up so far. That’s because any changes will only apply to future benefits – what you’ve built up before any change would be protected. Also members with deferred benefits [benefits on hold] aren’t affected as they are ‘locked in’ to the rules at the time they left. And pensioners aren’t affected, as they are already drawing their benefits.
We will publish a summary of the Government’s proposals once issued by way of a Newsflash and report the changes in our Pension Power members’ newsletter.
| GMPF |
Greater Manchester Pension Fund – your local fund within the Local Government Pension Scheme. |
| LGPS |
Local Government Pension Scheme – the staff pension scheme for employees of local authorities, and other kindred bodies. |
| DCLG |
Department for Communities & Local Government – the Government Department that writes the rules of the LGPS. The Secretary of State for this Department is Eric Pickles. |
| Funded pension scheme |
This is where a scheme invests and manages its own pot of money to pay its benefits. GMPF alone is currently worth around £10 billion. The LGPS is the only funded scheme of all the public sector schemes. |
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