Local Government Pension Scheme: Changes to the Local Valuation Cycle and the Management of Employer Risk

31 Jul 2019

Modern universities are those universities that took title after 1992, and as such comprise the majority of higher education institutions offering the Teachers’ Pension Scheme and the Local Government Pension Scheme to their employees.

MillionPlus has long-question the imposed obligation on modern universities that mean some of them are unable to make decisions about the most appropriate pension scheme to offer employees. The current arrangement is a function of history, and does not make sense in the evolving HE landscape, with the introduction of new private providers (who have often low contribution DC schemes, and pre-92 universities who almost all have DC schemes for support staff).

However, proposals for changes to the employers required to offer local government pension scheme membership may look attractive at first glance, but they potentially offer only a small amount of pressure-relief for some employers. The guaranteed retention of existing staff within the LGPS means that only modest savings can be gained through the new employees’ route (unless of course the organisation had significant staff turnover). This means that many employers will continue to be constrained by historic, centrally directed decisions that may harm their plans for long-term, sustainable investment in a high-quality student experience.

Download MillionPlus response to MHCLG consultation on LGPS changes »