Return to Agenda

Division(s): N/A

ITEM EX24

EXECUTIVE - 15 MARCH 2005

‘FACING THE FUTURE’: CONSULTATION ON PROPOSED CHANGES TO THE LOCAL GOVERNMENT PENSION SCHEME

Report by Director for Resources

Introduction

  1. The Office of the Deputy Prime Minister has issued a consultation document seeking views on possible changes to the LGPS, ‘Facing the Future – Propositions and Principles for an Affordable and Sustainable Local Government Pension Scheme’. The executive summary from the consultation document is reproduced at Annex 1; the full document can be viewed at www.xoq83.dial.pipex.com/whatsnew.htm.

  2. The consultation has been prompted by a need to find a way to maintain an affordable good quality pension fund for local government employees in the current and anticipated financial situation and in view of increasing life expectancy. It is generally accepted that action must be taken to make changes to the provisions of the scheme in order to maintain its viability and affordability. The target date for changes to the scheme to be implemented is 1 April 2008, the new regulatory framework having been in place from 1 April 2007.

  3. The deadline for comments to the ODPM is 31 March 2005. Both South East Employers and the Employers Organisation have indicated that they will send collective comments to the ODPM and have sought views from councils to inform these. Because of the timescales involved a copy of a draft of this report has been sent to each, making its status clear and undertaking to inform them of any significant changes made to the proposed comments following this meeting.

    4. Impact of Changes to the LGPS on Industrial Relations

  4. Unison nationally have expressed deep concern at the changes to the LGPS which have already been approved and due to come into effect on 1 April 2005. This includes changes to the normal age at which an unreduced pension can be paid from 60 to 65 years. Ballot papers were circulated in February and a series of national one day strikes is planned for late March 2005. Unison has also issued a rebuttal of the assumptions and views put forward by the ODPM in the consultation document but have not focussed action on this as yet. Although communications and relations remain constructive within Oxfordshire itself, clearly, nationally organised disputes will have serious local impact, with likely disruption to services which will require careful management.

    5. Analysis of the Central Issues and Proposed Response

  5. Annex 2 sets out a suggested response on the main issues raised by the consultation for the Executive to consider as their official response to the consultation on behalf of the Council as employing authority. A separate response has been agreed for submission by the Pension Fund Committee on behalf of the Council in its role as administrator of the Oxfordshire Pension Fund.

    6. Resumé of the Employee Consultation Exercise

  6. An e-mail consultation exercise was undertaken which invited employees to send their comments and queries to a special e-mail box. There were approximately 30 diverse responses which were generally thoughtful and useful. The common issues raised include:

    • Generally employees wish to protect the final salary scheme. An average salary scheme is seen as penalising those who get any promotion and women whose careers may be delayed by child rearing;

    • Employees approve of supporting over 65's who work to make sure they are not disadvantaged compared to those who choose to retire;

    • Employees welcome flexibility;

    • A good pension scheme is seen as compensation for lower pay in local government than some sectors;

    • The proposals and the current scheme are seen as benefiting those with dependents. Can this be made fairer for those without?

    • Reduced pension benefits are expected to be detrimental to recruitment and retention.

RECOMMENDATION

  1. The Executive is RECOMMENDED to consider the suggested response set out in Annex 2 to the report and subject thereto to authorise the submission of the response to the Office of the Deputy Prime Minister on behalf of Oxfordshire County Council as employing authority.

JOHN JACKSON
Director for Resources

Background Papers: Nil

Contact Officers:
Sue Corrigan, County Human Resources Manager Tel: 01865 810280
Sean Collins, Assistant head of Finance Tel: 01865 815411

March 2005

Return to TOP