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Pension liabilities could cost millions

 
Created on 12/10/2020 @ 15:56
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Millions of pounds might have to be found to pay Powys County Council staff pension liabilities.

A meeting of the Pensions and Investment committee has been told that going back through the data an re-calculating the members’ pensions would be a “big job.”

In June 2019, the Supreme Court refused permission for the UK government to contest an earlier ruling that changes to firefighters’ and judges’ pension schemes amounted to age discrimination.

The McCloud judgment was based on alterations to public sector pensions made in 2014 – 2015, which saw workers close to retirement age allowed to stay under existing and more lucrative pension arrangements.

However, the changes were said to be unfair towards younger employees as it meant they were placed into new and less generous schemes.

Earlier this month a UK Government consultation on how to solve the problem and remove the discrimination, came to an end.

PCC pension funds manager, Chris Hurst said: “This is a big job, we have consulted and commented on how to fix this.

“When it became a career average scheme in  2014, for ease of administration, we no longer had to keep records of part time hours for example.

“What this ruling requires us to do is to re-visit all that data and actually input hours for all these scheme members.

“We will potentially have to recalculate all the retirements that have happened since 2014, all the transfers out, all the refunds anything where we have paid a benefit will have to be checked.”

This would also need to be done to members of the scheme at the time, who have not retired yet.

Mr Hurst added that following an initial investigation believed that the pension details of 30 per cent of the membership might need to be looked at.

Committee, Vice-Chairman, Cllr Arwel Jones, asked when a decision on how to tackle the issue by the UK Government would be made.

Mr Hurst, said that he expected he didn’t expect it would “take too long” and expected legislation to be in place from April 1.

Cllr Huw Williams said: “What about the capacity to do this work staffing wise?”

Mr Hurst replied: “I don’t think I can underestimate the significant impact this will have on the administration team, and we’re currently working through what options we have to tackle it.”

The discussion was part of the governance and administration update which was noted by the committee.

UK Government officials have estimated the McCloud ruling will result in around £4 billion a year being added to pension liabilities across the UK with the NHS, local government, police and armed forces among the organisations affected.

 

By Elgan Hearn, Local Democracy Reporting Service

 

 

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