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					PROPOSED CHANGES TO THE LOCAL GOVERNMENT PENSION SCHEME

REMOVAL OF THE 85 YEAR RULE FOR MOST MEMBERS:

The normal retirement age for scheme members is 65.

The 85 year rule currently allows scheme members to voluntarily retire from age 60 on an
unreduced pension where the sum of their age plus membership (in whole years) equals 85.
Scheme members satisfying the rule between age 50 and 60 may also retire with no actuarial
reduction to pension, but only with their employers’ consent.

Current legal opinion is that the 85 year rule has to be removed because it will be in breach of
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Age Discrimination legislation which comes into force on 1 October 2006.
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The 85 year rule is expected to be removed in respect of benefits accruing after 30
September 2006. This means that if you retire before the age of 65 your benefits may be
reduced in respect of all membership accrued after that date. However, all benefits accrued
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up to 30 September 2006 will not be affected.

It is proposed that you would be able to nominate a retirement date between age 60 and 65
and make extra contributions to offset any reduction to benefits paid before age 65.

Working beyond the nominated date, or age 65, would result in an actuarial increase in the
accrued benefits.

It is also proposed that transitional protections would apply to members aged 60 or over by
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31 March 2013 (although the exact form of the protections and who they will apply to is still
under discussion).

TAX SIMPLIFICATION
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These changes are likely to take effect from 6 April 2006

       Flexible retirement would be permitted at or after age 60. This means it may be
        possible for you, with your employers consent, to reduce your hours and/or grade and
        draw your benefits whilst continuing membership of the scheme.

       The current 15% limit on employees’ contributions would be removed.

       You would be able to take up to a maximum of 25% of the capital value of your
        pension fund as a lump sum (the current limit roughly equates to 15% of the capital
        value). Any amount taken above the current limit would be achieved by exchanging
        part of your pension for tax free cash at a rate of £12 lump sum for each £1 of
        pension given up.

However, the earliest age at which benefits may be paid on the grounds of redundancy or
efficiency is to remain at age 50 (but will have to increase to 55 by 2010).

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OTHER CHANGES THAT ARE LIKELY TO COME INTO EFFECT FROM 6                           APRIL 2006

        
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            Employees would be able to join the scheme at any time until their 75 birthday.

        
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            Employees would be able to choose to remain in the scheme until their 75
            birthday.

           Employees who defer drawing benefits beyond age 65 would have those benefits
            actuarially increased.
       The members’ contribution rate for buying periods of strike breaks would reflect
        the full cost to the fund.

       The ability of a member to surrender part of their pension in favour of a
        dependant would be removed (but the normal survivor benefits for widow’s,
        widower’s civil partners and eligible children remain).

    
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        Children’s pensions starting after 5 April 2006 would not be extended beyond
        their 23rd birthday, unless the child was permanently unfit.

       The maximum number of added years a scheme member can purchase in the
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        future would be 6 2/3 .

       The ability to convert some or all of the lump sum paid on retirement into
        additional pension would be removed.

REMEMBER – THESE ARE PROPOSALS ONLY AT THIS STAGE.

				
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posted:11/30/2009
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Description: LGPS-–-COMMUNICATIONS