Local Government Pension Scheme

28/09/2020

We have set this page up to keep our members up to date with the latest LGPS consultation concerning plans to cap exit payments at £95,000.

The attached documents will help to keep you informed of what is going on.

• Latest LGPS update
• UNISON Briefing on exit payment regulations
• Model letter to send to your local MP to draw their attention and support to our campaign

 

UNISON - The £95,000 Public Sector Exit Cap - What it means for the Local Government Pension Scheme https://www.unison.org.uk/get-help/knowledge/pensions/local-government-pension-scheme/ The government is pushing through its threat to limit severance payments to a total value of £95,000 in the public service.

 

Redundancy and early retirement - difficult choices for LGPS members

https://www.pensionsage.com/pa/Redundancy-and-early-retirement-difficult-choices-for-LGPS-members.php Following regulations being laid over the summer implementing a cap of £95,000 on exit payments for public sector employees, the Ministry of Housing, Communities and Local Government (MHCLG) is consulting on the impact of the proposed reforms to exit payments made to local government employees. This includes changes that will affect redundancy payments and the early retirement terms available on redundancy. The consultation will close on 9 November 2020.

 

Cheshire Pension fund reveals its carbon footprint https://www.cheshireeast.gov.uk/council_and_democracy/council_information/media_hub/media_releases/pension-fund-reveals-its-carbon-footprint.aspx

A local pension fund has become one of the first in the country to report on the carbon footprint of its £6 billion investment portfolio. Cheshire Pension Fund has published its Climate Risk Report, which reveals that the carbon footprint of its equity investments is 30 per cent below the general market, represented by the FTSE All World Index which covers more than 3,000 companies in 47 countries.

 

Interim Guidance on ‘relaxing’ the Exit Payments Cap until the new Local Government Regulations come into force.

18 December 2020

The Ministry of Housing, Communities and Local Government (MHCLG) has published new guidance for local authorities on how to manage exit payments that exceed the new £95,000 limit before the necessary changes to regulations come into force (currently being consulted on).

The guidance can be found here https://www.gov.uk/government/publications/local-government-exit-pay/local-government-exit-pay-a-guide-for-local-authorities-for-the-interim-period-until-mhclg-regulations-come-into-force

In short, it outlines the permissible reasons for relaxing the cap and the process authorities will need to apply for each request made.

There is some good news in that, as UNISON called for, bulk relaxations can be requested under this process rather than only allowing individual requests. We hope this will continue after any regulations come into force.

Permitted grounds for requesting a relaxation of the cap are where ministers agree it is ‘necessary or desirable’.

Permitted reasons for the request are limited to:

• Compassion owing to genuine hardship – the situation of family members will also be considered;
• To give effect to urgent workplace reform - including bulk requests;
• An agreement to exit was made before the implementation date, was expected to happen by the implementation date but has been delayed through no fault of the employee.

Process

A clear business case must be submitted for approval by the Secretary of State for Local Government and Treasury ministers.

Where there is a pension element to any part of the exit payment, the Local Government Pension Scheme (LGPS) administering authority will need to give the requesting employer the necessary cost and assumption information within a maximum of two weeks of a request.

The detail of what other information needs to be included in the request is clearly listed in the guidance note.