Flexible pension scheme for local Government workers

Date published: 02 April 2008

A new-look Local Government Pension Scheme is introduced today, making it fairer and more flexible for both employers and the taxpayer.

The changes follow detailed and constructive discussions with stakeholders including employers and the unions, and ensure the Local Government Pension Scheme meets the needs of the workforce and addresses the challenges posed by increased life expectancy and extended working lives.

Members of the pension scheme will receive an improved package of benefits, including: 

• The retention of a guaranteed, final salary scheme.
• Flexible retirement provisions.
• Improved death-in-service terms.
• Better targeted ill health provision.

In return for the improved benefits, employees will contribute to the scheme on a tiered basis, in relation to their salary level. This avoids creating additional burdens for taxpayers, who ultimately guarantee the scheme's security, and employers who provide the benefits.

A new Policy Review Group has also been formed, to enable employers and unions to continue to be involved in the key decisions about the future of the Pension Scheme.

Local Government Minister John Healey said: "The new-look Local Government Pension Scheme will make sure people who have devoted their working lives to public service are given a fair and affordable settlement in retirement.

"These changes secure value for money for the taxpayer, and put the pension scheme in a better position to provide a pension able to meet the needs of an ageing population.

"And with the Policy Review Group we have formed, we can continue the efforts we have been making, alongside local government and trade unions, to ensure the Local Government Pension Scheme is fit to meet future needs."