Pension reform proposals agreed with unions

The Local Government Association (LGA)'s work to maintain a sustainable Local Government Pension Scheme (LGPS) which is affordable for the council taxpayer and fair to employees has moved a step closer with local authority leaders and unions reaching agreement on proposals for reform.

The changes being put forward would mean lower future service contributions for employers from 2014 and more stable contributions in the future. Among the key measures is a move to calculating pensions against career average earnings, rather than final salary. It will also increase fairness and flexibility for workers.

The LGA and unions will now consult their respective members over the proposals. The Government has indicated that a favourable outcome from consultations will enable it to move directly to a statutory consultation in Autumn, with reform to be implemented from April 1, 2014.

Last year, the LGA successfully argued that reform of the LGPS should be negotiated separately to reform of pensions in other parts of the public sector. This is because the LGPS is a funded scheme with £165 billion in investments and has a higher annual income than expenditure, unlike the schemes provided in other parts of the public sector which are unfunded and rely heavily on the taxpayer.

Access the LGA's joint statement with the unions – LGPS website

Read the LGA's media release 31 May 2012

1 June 2012

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