New plans for council pensions

A consultation is under way on a new-look local government pension scheme for existing employees and new entrants from 1 April 2008.

The consultation document Where next? options for a new-look local government pension scheme in England and Wales was issued by the Department for Communities and Local Government with responses invited until 28 September.

It sets out the following four options for the new scheme: updating the current scheme; a new final salary scheme with an improved accrual rate; a career-average scheme; and a hybrid arrangement based on a career-average scheme with a final salary option.

The trade union side in local government is pushing for the final salary scheme. In its response to the consultation, it stated: "This option is the closest to the trade union side's agenda, although we want to improve on it. It is a final salary option, in which benefits build up at the rate of 1/60th of pensionable age."

A statutory consultation will follow in late autumn and it is expected that regulations covering the new scheme will be ready in April 2007.

Public sector trade unions are also continuing to negotiate with employers and the government over protection for existing scheme members, to ensure they get the same treatment as members of other public-service pensions schemes.

To view the joint trade union side response, go to www.unison.org.uk/pensions.