The 2019 formal valuations for the English and Welsh funds in the Local Government Pension Scheme (LGPS) are fast approaching and there has been a lot of concern about the change to Scheme benefits as a result of the cost control mechanism being triggered.
Given that the Government released a written statement to “pause” the cost cap process, there is still uncertainty as to how the possible breach will affect the LGPS in the future and what this means for administering authorities. As there is a pause all administering authorities can do for now is to continue with as business as usual. However, we are close to this and will provide updates on the process as soon as we hear them.
"2016 was the first time the mechanism was utilised. Contrary to what was anticipated when these mechanisms were being built – at least by their architects - it was the floor that was breached rather than the ceiling."
As a result, it remains uncertain whether changes will be needed to the design of the LGPS. However, we still think that it is important to help administering authorities understand the cost management process and our briefing note covers the possible changes to the LGPS.
We also consider what administering authorities can do to prepare for the 2019 valuation as a result. Your usual contact will be in touch to discuss next steps.
To continue reading, please download the briefing note below.