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ITEM PF17

PENSION FUND COMMITTEE 21 FEBRUARY 2003

STOCKTAKE EXERCISE ON THE LOCAL GOVERNMENT PENSION SCHEME, GREEN PAPER ON PENSION PROVISION AND OTHER PENSION CONSULTATION PAPERS

Report by Director for Business Support & County Treasurer

1. At the last Pension Fund Committee in November 2002 the Committee members agreed to take the discussion paper on the Stocktake exercise of the Local Government Pension Scheme (LGPS) back to their political groups for discussion and comment and that the outcome be collated and submitted to the next meeting, together with any feedback received from delegates at the Pension Fund Forum.
2. At the time of preparation for this report no comments or feedback have been received.
3. In the meantime the response date for the paper referred to above has been extended from 14 February 2003 to 17 April 2003. The main reason for the extension is to enable respondents to take into account the Government’s proposals for pension provision, outlined in the Green Paper issued December 2002 and the Treasury Proposals for streamlining the tax regime surrounding pensions. A copy of the Local Government Pensions Committee (LGPC) Circular No. 127, issued in January 2003 and setting out the Government’s Green Paper proposals is attached as Annex 1.(download as .doc file)
4. The Government’s Green Paper and the Treasury Proposals for streamlining the tax regime is the result of national concerns that:

• too few people are making adequate saving and preparation for their retirement;
• people are living longer;
• the cost of pension provision is rising due to greater longevity and the current trends in the financial markets.

5. The Green Paper was issued on 17 December 2003 and responses have to be made by 28 March 2003. The reply date for the Treasury Proposals on the tax regime is the 11 April 2003.
6. Additionally, the Office of the Deputy Prime Minister (ODPM) has issued a further consultation paper about the next area to be covered by the Stocktake exercise: The scope for further simplification of the regulatory framework governing the LGPS. Responses to this consultation exercise are required by 17 March 2003. This exercise, however, has less strategic significance and will mainly concern pension practitioners.
7. These consultations provide the opportunity for the current scheme members, administrators and the elected members to prepare the pensions framework for the next generation of local authority employees including those in other local authority occupational pension schemes i.e. teachers and fire-fighters.
8. To help the members formulate their views and provide some basis for meaningful discussion at political group meetings the officers will provide a composite draft response to the ODPM and Treasury consultation papers. It is planned to have completed the draft response in time to be presented to this Committee meeting.

RECOMMENDATION

9. The Committee is RECOMMENDED to note the report and to discuss arrangements for comment to be made on the officers’ draft composite response so that the Council can respond to the ODPM and the Treasury within the deadlines set out above.

CHRIS GRAY
Director for Business Support & County Treasurer

Background Papers: DWP Green Paper: Simplicity, Security and Choice:Working and Saving for Retirement. www.dwp.gov.uk

H M Treasury: Simplifying the Taxation of Pensions: Increasing Choice and Flexibility for all. www.hm-treasury.gov.uk

ODPM: Stock take: Discussion Papers: www.odpm.gov.uk/news/0210/0106.htm

Contact Officer: Barry Phillips Tel: 01865810805

February 2003

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