CLG (08) PRG 17

 

 

 

LOCAL GOVERNMENT PENSION SCHEME

 

POLICY REVIEW GROUP

 

SECRETARIAT NOTE – RULE OF 85 – FRESH ASSESSMENT OF COSTS

 

 

 

CLG has prepared the attached paper for discussion which seeks to begin the work Ministers have requested.  The initial steps required are as follows:-

 

·        the scope of data required;

 

·        data sources;

 

·        data organising and supply;

 

·        GAD assessment and report back to PRG on findings;

 

·        discussion of results; and

 

·        an outline timetable for the exercise.

 

 

 

 

LGFPSD

CLG

JANUARY 2008

 

 

 

 


CLG (08) PRG 17

 

LOCAL GOVERNMENT PENSION SCHEME

 

Rule of 85 Fresh Assessments of Costs

 

As members of the Group will be aware, Ministers’ have agreed to a fresh assessment of the cost of providing further protection following the removal of the rule of 85 by removing the taper which will operate from 2016 to 2020.

 

Background

 

In his written statement to Parliament, the Minister made it clear that the continuing stability of the new Scheme’s costs is critical to the Government.  He emphasised also the policy to ensure no adverse effects falling on taxpayers by ensuring that the costs of implementing any scheme amendments to improve the level of the existing rule of 85 protections would need to be provided within the Scheme.  I attach a copy of the statement for reference.

 

Present position

 

The Department’s letter of 13 December, which also explained to Scheme interests the steps now proposed, clarified the approach Ministers wish to take.

 

No final or immediate decisions have been taken.  Ministers now believe that a fresh assessment of costs and experience, using the 2007 Scheme actuarial valuation data would be useful.

 

To take this assessment forward, and with some momentum, Ministers have asked if the Policy Review Group, of key stakeholders, can consider, with the Government Actuary’s Department, relevant data and experience of the 2007 valuation.  The results will then be considered afresh by Ministers, along with all the responses received on the original consultations proposal and any later submissions before a final decision is taken.

 

16 January meeting

 

The meeting of the Policy Review Group on 16 January is intended to begin the work Ministers have requested.  In outline, CLG sees the meeting discussing the following initial sequence of steps: -

 

§         the scope of data and experience required

§         data sources

§         data organising and supply;

§         GAD assessment and report back to PRG on findings;

§         discussion of results; and

§         an outline timetable for the exercise.

I enclose a copy of the agenda for our meeting and look forward to seeing you on the 16th.