Pensions Update           Home                        Back to News & Events Page


14thDecember 2006




Phil Woolas (Local Government Minister) made a statement to Parliament on Thursday 23rd November, outlining the core aspects of the New Local Government Pension Scheme.  This was despite the fact that talks were still going on between the Local Government employers and the Trade Union’s talks which he said he hoped would produce an agreement.  He didn’t even have the courtesy to tell the two sides that he intended to make the statement!


However he subsequently back-tracked and agreed to hold back the draft Regulations.  It is understood he will be writing to UNISON setting out his views on the need for the negotiations to continue and that the outcome of further talks can be reflected in the Regulations.  Presumably this change of attitude is due in no small part to the successful lobbying of MP’s by UNISON members – putting pressure on the Government works!


MAIN POINTS OF THE PROPOSED NEW SCHEME - as laid out on 23rd November:




  • Increase in employee contribution rates from 6% to an average 6.3%.
  • Equivalent reduction in employer contributions.
  • This will mean that approximately 70% of full-time Council workers will pay more into the scheme than at present.




  • Protection for current members of the scheme will only exist until 2016, tapered to 2020, so only staff aged 50 or over will be fully protected.
  • This compares to full protection to all for other public sector workers, and full protection until 2020 for Local Government workers in Scotland.


Ill-Health Retirement


  • Introduction of a 3-tier scheme, one tier for total incapacity, one for those who are not able to work at present but will be able to do so before retirement age, and one for those who could work at another job but not their current one.


Accumulation Rate


  • For new members, from 2008 pension will be 1/60 x salary x years of service (compared to 1/80 at present).  There will be no automatic lump sum (currently 3/80 x salary x years of service), but staff will be able to convert up to 25% of pension to a lump sum at a rate of £12 lump sum for every £1 pension.
  • However, although the statement by Phil Woolas to Parliament made it clear that current members of the scheme would benefit from this improvement to the accumulation rate under the new scheme from 1st April 2008, apparently civil servants have said that they do not intend to allow those afforded protection to do so.


Other aspects


  • Except on the grounds of ill-health, you will have to be 55 to take early retirement with pension under the new scheme (Croydon have already taken this step).
  • Calculation period will be the final year salary or the average of any 3 consecutive years’ salary within the last 10 years.
  • Partner pensions for spouses, civil partners and nominated dependent partners, and children’s benefits will be at accrual rate of 1/160.  No proposal on backdating.
  • Death in Service benefits increased from twice salary to three times.
  • Some members, “under unspecified circumstances” (!) could take some of their pension while continuing to work.


What Happens Next?


The Service Group Liaison Committee will meet on 1st December, followed by meetings of the Services Groups on 4th December.  Unless discussions are allowed to continue between employers and trade unions to attempt to reach an agreement, an industrial action ballot looks inevitable.


Malcolm Campbell

Branch Secretary


Pickets outside Taberner House

Picture courtesy of Croydon Guardian