EO backs changes to local government pension scheme

The
Employers’ Organisation for local government (EO) has backed changes to the
Local Government Pension Scheme.

Changes
to the Local Government Pension Scheme in England and Wales, made by The Office
of the Deputy Prime Minister (ODPM), are due to come into effect from April
2005.

Among
the changes is the scrapping of the 85-year rule, whereby a member who takes
early retirement can claim full pensions benefits if their combined age and
service amount to 85 years or more.

The
Government is proposing that:


In respect of benefits accruing from membership after 31 March 2005, the
scheme’s Normal Payable Date will be age 65


If the benefits in respect of the post-31 March 2005 scheme membership are
drawn at age 65, they will be paid in full; but if they are voluntarily drawn
before age 65, they will be paid at an actuarially reduced rate


For the benefits that members have already accrued up to 31 March 2005, the
scheme rules will be unaltered – ie. the benefits, if paid at age 65, will be
paid in full. If voluntarily drawn between 60 and 65, and the member’s combined
age and service is 85 years or more, the benefits will be paid in full


If voluntarily drawn between the ages of 60 and 65, and the member does not
meet the ’85-year rule’, the benefits will be paid at an actuarially reduced
rate


The earliest age at which benefits can be paid from the scheme will be
increased from 50 to 55


The change will not affect scheme members who are aged 50 or over on 31 March
2005, nor will it affect members who are retired on the grounds of permanent
ill health.

Roy
Wilson, chairman of the Local Government Pensions Committee, said: “A fair
balance needs to be struck between the benefits provided to scheme members, and
the costs that are incurred by the employers and local tax payers.

"To
strike that balance, and in recognition of the increasing life expectancy of
scheme members, coupled with the objective of retaining experienced people in
the workforce for longer, we are supportive of the changes that the ODPM is
proposing to make to the Local Government Pension Scheme," he said.

By Michael Millar

Comments are closed.