ITEM PF10 - ANNEX 1EXECUTIVE – 18 MAY 2005PENSION FUND COMMITTEE – 27 MAY 2005LOCAL GOVERNMENT PENSION SCHEMEDRAFT Response to ODPM
Draft Local Government Pension Scheme (Amendment) Regulations 2005 I am responding to the ODPM consultation on the above Regulations dated 1 April 2005. The response is on behalf of the County Council both as an employer and as administering authority for the purposes of the Oxfordshire Pension Fund. The Council’s Executive and its Pension Fund Committee discussed your letter and agreed this response at their respective meetings on 18 May 2005 and 27 May 2005. The County Council is unable to support the latest set of proposed Regulations, and does not believe that the 2004 Regulations should be revoked without acceptable plans being first put in place to fully finance the effects of this revocation. The Pension Fund Committee wrote in support of the changes that the 2004 Regulations would bring about when first proposed in the discussion paper of November 2003, and the Council has no reason to change that support at this time. The Council does remain concerned at the industrial effects of the failure to communicate adequately and gain union agreement to the changes. The Council is particularly concerned in terms of the implications of the future affordability and sustainability of the Local Government Pension Scheme if the 2004 Regulations are to be revoked. The Oxfordshire Pension Fund Actuary has included in the 2004 Valuation results a reduction in the on-going pension fund liabilities equivalent to 1.8% of pensionable pay. This reduction has been incorporated into the employer contribution rates set for 2005/06 onwards. Despite this, the County Council has seen an increase in its employer contribution rate of 3.3% from 15% to 18.3%, even after allowing for an increase in the recovery period from 13 to 25 years. The Council is not prepared to support the revocation where it will lead to an increased cost to employers. The Council further believes that if measures are to be identified that could mitigate the costs of revoking the 2004 Regulations (whether they be an increase in employee contributions, or a reduction in benefits), then they should be introduced in addition to the 2004 Regulations to reduce the current cost to employers, and consequent cost to Council Tax payers. These changes should be proposed with time for proper consideration, and as such, should be included in the process started with last year’s Green Paper, with a target date for implementation of April 2008. Yours sincerely
John
Jackson
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