KPMG provides the detail behind MHCLG’s consultation on the Local Government Pension Scheme.
9 July 2019
The Ministry of Housing, Communities and Local Government (MHCLG) has released a policy consultation seeking views on proposals to amend the Local Government Pension Scheme 2013 in England and Wales.
In brief, the consultation covers:
- moving local fund valuations to a 4-year cycle
- measures to mitigate risks of moving to a 4-year valuation cycle
- flexibility on exit payments
- further policy changes on exit credits
- policy changes to education employers required to offer Local Government Pension Scheme (LGPS) membership.
KPMG has described this as a 'bellwether' consultation for housing associations. Not just because of the substance of the consultation, but also in terms of the narrative used and how the treatment of “Tier 3” employers is changing. The proposed changes present both a risk and an opportunity – a risk of higher contribution rates and increasing intervention from the Fund and an opportunity for more flexibility and control for employers.
This consultation gives the clearest signal yet of more commercial and 'regulatory' treatment of housing associations within the LGPS. With this new focus, and with increased flexibility, it will be more important than ever for employers to engage and seek control.
Responses are required by 31 July 2019. The National Housing Federation is inviting comments from affected housing employers by 19 July 2019.
A more technical update will be issued at a later date reflecting further on the possible outcomes.