Responding to the TaxPayers Alliance Report on local government pensions, Steve Thomas CBE said:
“The picture painted in the report is based on a spurious way of gauging the viability of a pension scheme, and does not reflect the changes that have already been made to the Local Government Pensions Scheme (LGPS) to help secure its long term viability.”
“The nominal deficit fell last year, thus demonstrating the efficacy of the action already taken. Further work is currently in train, with a restructured LGPS expected to be introduced in April 2014.”
- The LGPS is a funded scheme, combining contributions from employees, councils and investment income.
- Depending on salary, members contribute from 5.5% to 7.5% of their annual salary.
- As of March 2011 schemes in England and Wales had more than £152 billion in assets, so the pension liability is more than 75% funded already.
- In 2008 we re-indexed pensions, moving from the RPI to the normally lower CPI. We also increased employee contributions. Both measures are helping address the deficit.
- Overall local government’s annual contribution to employee pension schemes represent less than 5% of local government finance, with employees and investments contributing a further £5.5 billion to schemes each year.
- The average pension paid to LGPS retirees is £4,235 per annum.
