Management Information Sheet
Pensions Update - February 2012
There have been some recent developments concerning proposed changes to both the Local Government Pension Scheme (LGPS) and the Teachers Pension Scheme (TPS) that you should be aware of.
Teachers Pension Scheme
To reflect the Government's proposals for the reform of public service pension schemes the Department for Education, following a consultation exercise last year, has announced a system of tiered employee contributions to the TPS to be effective from 1st April 2012. Therefore, members of the Teachers Pension Scheme will see these deductions in their pay from April 2012 onwards
Employee contribution rates will be as follows:
The employer's rate of contribution remains at 14.1%
Discussions continue about proposals for longer term changes. Members should check the Teachers Pensions website for more updates and information -
www.teacherspensions.co.uk
Local Government Pension Scheme
The situation with the Local Government Pension Scheme is as follows.
Just before Christmas, the Government announced that a "Heads of Agreement" had been reached with the trade unions that represent support staff, on the reforms of public service pensions, including the Local Government Pension Scheme (LGPS).
This is a set of principles that will be the subject of further negotiations over the coming weeks and months, together with a timetable for those negotiations and implementation.
The main principles for the LGPS are:
A new scheme is to be introduced from April 2014 rather than April 2015, meaning there would be no need for scheme changes prior to April 2014
The new scheme will be designed around options that are based on career average earnings, and may include the possibility of no increases in employee contributions for members providing overall financial constraints are met
The new scheme will incorporate some elements of choice in order to retain existing members and recruit new ones
To encourage flexible retirement, the age at which benefits may be taken will be any time between 55 and 75 - benefits will be reduced (or not) depending on how close the member is to the scheme's normal pension age
The scheme's normal pension age will be 65 or state pension age, whichever is later
There will be protections in place for existing members
Some key milestones have been identified to ensure that new regulations are in place by March 2013, which will be essential for implementation in 2014.
In the meantime, the formal consultation exercise that was taking place on increases to employee contribution rates scheduled for April 2012 has been suspended, as has any further industrial action whilst talks are ongoing.
Look out for further information on the Norfolk Pension Fund website - click "Public Sector Pension Reform" on the homepage
www.norfolkpensionfund.org
Teachers Pension Scheme
To reflect the Government's proposals for the reform of public service pension schemes the Department for Education, following a consultation exercise last year, has announced a system of tiered employee contributions to the TPS to be effective from 1st April 2012. Therefore, members of the Teachers Pension Scheme will see these deductions in their pay from April 2012 onwards
Employee contribution rates will be as follows:
| Lower Salary | Higher Salary | Contribution Rate | Increase (compared to 6.4% contribution) |
| £14,999 | 6.4% | 0% | |
| £15,000 | £25,999 | 7.0% | 0.6% |
| £26,000 | £31,999 | 7.3% | 0.9% |
| £32,000 | £39,999 | 7.6% | 1.2% |
| £40,000 | £74,999 | 8.0% | 1.6% |
| £75,000 | £111,999 | 8.4% | 2.0% |
| £112,000 | 8.8% | 2.4% |
The employer's rate of contribution remains at 14.1%
Discussions continue about proposals for longer term changes. Members should check the Teachers Pensions website for more updates and information -
www.teacherspensions.co.uk
Local Government Pension Scheme
The situation with the Local Government Pension Scheme is as follows.
Just before Christmas, the Government announced that a "Heads of Agreement" had been reached with the trade unions that represent support staff, on the reforms of public service pensions, including the Local Government Pension Scheme (LGPS).
This is a set of principles that will be the subject of further negotiations over the coming weeks and months, together with a timetable for those negotiations and implementation.
The main principles for the LGPS are:
Some key milestones have been identified to ensure that new regulations are in place by March 2013, which will be essential for implementation in 2014.
In the meantime, the formal consultation exercise that was taking place on increases to employee contribution rates scheduled for April 2012 has been suspended, as has any further industrial action whilst talks are ongoing.
Look out for further information on the Norfolk Pension Fund website - click "Public Sector Pension Reform" on the homepage
www.norfolkpensionfund.org