A report of the Director of Pensions provided Members with an update on the Scheme Advisory Board’s key projects relating to the governance and administration of the Local Government Pension Scheme; specifically national initiatives to deal with inconsistencies across the Scheme for academies, the risks associated with Third-Tier employers and the conflicting interests at local authority employers who undertook the administering authority function.
The report also covered the policy consultation issued by the Ministry of Housing, Communities & Local Government on ‘Technical Amendments to Benefits’ and Merseyside Pension Fund’s response.
Yvonne Caddock, (Head of Pensions Administration)informed Members that Fund Officers sought comments and approval from the Chairs of both the Pension Committee and Pension Board on the policy perspective, before the consultation response was submitted by the prescribed deadline of 29 November 2019.
The Head of Pensions Administration outlined the National Initiatives and Associated Scheme Advisory Board Activity and explained that the Scheme Advisory Board (SAB) was coordinating a number of projects to resolve issues that had arisen within the LGPS, relating to; the inconsistent treatment of Academies across Funds and the affordability constraints of Third-Tier Employers. In addition, further research was being undertaken to consider the dual role and conflicts of interest for a local authority employer undertaking the Scheme Manager function.
With regard to Consultation on ‘Technical Amendments to Benefits’ the Head of Pension Administration highlighted that the main change related to survivors’ benefits of same-sex marriages or civil partners, with the objective to equalise benefits to those of an opposite sex surviving spouse. Surviving partners in a civil partnership or same sex marriage of either sex were all currently afforded benefits equivalent to widowers.
Members were informed that the Government had decided that all public service pension schemes should implement changes to ensure that survivors of a registered civil partnership or same-sex marriage were provided with benefits that replicated those provided to widows.
It was noted that this change would be significant as post-retirement marriage was based on service from 1978 for widows but only from 1988 for widowers.
The Fund had responded to the consultation on 28 November 2018, supporting the equalisation of survivor benefits but had raised concern that the proposals did not extend to cover survivor pensions for opposite sex marriages or cohabitating partners. The response was attached as an appendix to the report.
The Committee were informed that as the changes to Survivor pensions would apply from the date civil partnerships and same-sex marriages were implemented; this would result in the need for Pension Funds to revisit all awards made under the current rules to those members affected and pay any additional sums due.
As it had been estimated that the cost to extend the improvement in survivors’ pensions to survivors of opposite sex marriages and cohabitating partners amounted to £2.8 billion across the public sector; there was no intent to take the provision forward at this time. The Head of Pensions Administration also informed that HMT and DWP were currently in consultation on this issue.
Resolved - That;
a) the developments of the Scheme Advisory Board’s projects and
b) the response sent to MHCLG regarding the policy consultation issued in October be noted.