Public sector workers will receive increased pensions protections
in the event their job is outsourced, in proposals published
today (10 January 2019).
The Ministry of Housing, Communities and Local Government is
consulting on reforms to ensure local government workers whose
roles are compulsorily transferred to independent providers,
retain the right to remain in the Local Government Pension
Scheme.
Under the reforms, transferred staff will continue to have access
to all the benefits of being a member of the Local Government
Pension Scheme, despite their change of direct employer.
Their membership will also continue even if their role is
sub-contracted or transferred again in the future, provided they
remain in the role they were transferred out from.
Currently employers with staff who have been transferred from
local government roles retain access to the Local Government
Pension Scheme, or they can offer staff entry into a broadly
comparable private pension scheme.
Under today’s proposals it will no longer be possible for
employers to offer staff a comparable scheme; all transferred
staff will be able to stay in the Local Government Pension
Scheme.
The Minister for Local Government said:
We’re committed to making the Local Government Pension Scheme
fairer and are seeking views on taking existing pension
protections further.
Staff who have no choice in the transfer of their role will,
under these plans, have the peace of mind that despite their
change in employer they will remain in the Local Government
Pension Scheme retaining their full membership and benefits.
The consultation launched today also puts forward proposals
around the mergers and takeovers of Local Government Pension
Scheme providers.
Where a provider has been taken over, the liabilities for its
pension scheme will now fall to the successor body. Where this
successor body is also a Local Government Pension Scheme it will
combine the members of the pension scheme it is taking over along
with those in its current scheme.
The government’s ‘Fair Deal’
policy was introduced in 1999 and sets out how pensions
issues should be dealt with when staff are compulsorily
transferred from the public sector to independent providers
delivering public services.
The Ministry of Housing, Communities and Local
Government consulted in May
2016 on the introduction of greater pensions protection
for employees of LGPS (Local Government Pension Scheme) who are
compulsorily transferred to service providers.
The 2016 consultation proposed that, in line with the
government’s Fair Deal guidance of October 2013, most LGPS
members in this position should have continued access to the LGPS
in their employment with the service provider. In doing so, it
was proposed that the option to provide transferring staff with
access to a broadly comparable scheme should be removed.
On 19 April 2018, the government response to the consultation
confirmed our commitment to introduce the strengthened Fair Deal
in the LGPS but noted that respondents to the 2016 consultation
had raised a number of concerns regarding the specific approach
we proposed to adopt.
We said we would give full consideration to the points raised and
committed to consult on new proposals.
The consultation will run until Thursday 4 April 2019.
