Local Government Pension Scheme

Brandon Lewis Excerpts

Tuesday 6th May 2014 Written Statements

[The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)]

The Government have laid before Parliament the Local Government Pension Scheme (Offender Management) Regulations 2014. These amending regulations will protect the pensions of both existing and former probation staff as they move to the new probation structures on 1 June 2014, provide certainty and security for transferring members, and prudently manage the accrued rights of members involved in the provision of probation services with the legal and orderly transfer of the assets and liabilities in respect of those members.

The regulations secure continued pension provision in the local government pension scheme for staff transferring from 35 probation trusts when they cease to operate on 31 May 2014, to either the national probation service, which will be a part of the Ministry of Justice, or one of the 21 community rehabilitation companies selected, after an open public exercise, to provide certain offender rehabilitation services.

Amendments to the scheme are needed because those staff transferring to the national probation service would, usually, be offered membership of the civil service pension scheme. The community rehabilitation companies can be admitted to the scheme through existing admitted body status provisions. Allowing transferring staff to remain in their current pension arrangement will assist the smooth transition to the new arrangements and give transferring staff reassurance because their pension arrangement does not change when their employment changes.

The regulations also provide for the Greater Manchester pension fund to be responsible for all pension administration for the new arrangements for probation provision. When probation trusts cease to operate, the scheme assets and liabilities in respect of current and former probation staff will move to the Greater Manchester pension fund. A framework for the transfers has been provided to facilitate the smooth movement of assets and this framework is set out in actuarial guidance issued by the Secretary of State, who has consulted and received actuarial advice from the Government Actuary’s Department.

Taxpayers get value for money as there are no lump sum exit payments to meet any cash shortfalls when the probation trusts cease to participate in the scheme. This is because the asset transfers are managed in an orderly and transparent way for all affected administering authorities, and liabilities will be prudently managed through the national probation service or community rehabilitation company. Local taxpayers are also protected from the possible risk of contractor failure by way of a Ministry of Justice guarantee to protect the Greater Manchester pension fund.