Growing number of employers and funds in Local Government Pension Scheme exposed to affordability, administration and governance issues
18 May 2016
The number of employers such as universities, charities and housing associations joining the Local Government Pension Scheme (LGPS) has grown rapidly in recent years to more than 10,000 (10,671) – with an increase of 14%1 in 2014-2013 alone. And this could grow even further over the next few years if some 16,0002 state schools in England ultimately become academies.
The magnitude of the legal and financial obligations faced by employers participating in the LGPS is often underestimated and as a result some entrants are beginning to question whether they can afford to stay in the pension scheme.
To support these employers and local authority funds, the Pensions and Lifetime Savings Association (PLSA) is publishing a series of guides for employers participating in the LGPS. The first of this guidance, published today, is designed to help employers understand what they need to know before joining the LGPS.
Joanne Segars, chief executive of the Pensions and Lifetime Savings Association, commented:
“The Local Government Pension Scheme is the largest public sector pension scheme in the UK and provides some fantastic benefits for its members. But for employers participating in the LGPS there are significant legal, financial and administrative obligations which can cause a real headache. Many are beginning to question whether they can even afford to stay in the scheme.
“This is why the Pensions and Lifetime Savings Association is launching a new series of guides to help employers gain a better understanding of their duties as part of the LGPS and what they can do to help manage the issues. It’s vital we support these employers to offer their employees the best possible access to saving for retirement.”
The guides were launched today (Wednesday) at the Pensions and Lifetime Savings Association’s Local Authority Conference in Gloucestershire and provide scheduled bodies with an introduction to the LGPS and local government contractors with help navigating entry into the LGPS.
Both guides: A guide for employers participating in the LGPS: An introduction to the LGPS for scheduled bodies and A guide for employers participating in the LGPS navigating entry into the LGPS: for local government contractors are available to download here.