LGPS, Nest or other

Question

Has anyone any views on the choice of Pension Scheme available to Officers please? Is there a lot of variation in the contributions?
Thank you.

Answer 1

The Local Government Pension Scheme (LGPS) is based on Career Average Related Earnings  (CARE) and is normally administered by Trustess who act for  scheme members of the Principal  (County/District / Borough/Metropolitan/Municipal/Unitary)  Authority.   Employee contributions vary according to salary but Employer contributions vary more widely. See https://www.lgpsmember.org/more/contscalc.php

Answer 2

If you go down the NEST route then its is probably simper and cheaper to administer. The LGPS route is very expensive for a parish with some hidden stings in the tail. Each County has a different scheme so you will need to research very carefully the costs involved. It can take several months to sign up to the LGPS scheme as they have to do an assessment in each case, before letting you in. One problem to be aware of is that if, say, the Clerk resigns, and is not replaced by another one on the LGPS, then there may be a cost to pay for contributions lost to the scheme, in order to fund the resigned clerks entitlements in the future.

Take lots of advice and if going the NEST type pension route ensure you get a supplier that has good accounting procedures and doesn't mess up the contributions required, or just use NEST of course.

HTH

Answer 3

As others have said there is some variation. However, be careful in attempting to change pension providers for existing staff. This would be a change in their terms and conditions of service and I would encourage you to take HR and legal advice before proceeding.

New staff can be put on a different scheme, but you would you have to justify why some staff were on a less/more beneficial scheme than others - especially if they were doing the same/similar roles.

Answer 4

The NEST scheme is a defined contribution scheme. In that respect it is inferior to the LGPS.
With NEST,  Employee and Employer contribute to build  up a pension pot .  The value of the pot and the final pension payable depends on how well it is invested and how well stock markets etc do over time.  There is certainty with the value of the pension from LGPS that NEST cannot provide.  It depends how much the Council want to go in providing employee benefits.  The admin cost of the LGPS depend pro rata how many members there are so I wouldn't automatically agree that NEST admin costs are cheaper.

Answer 5

Employee contributions in the LGPS are fixed throughout England and Wales, and are banded according to salary.  NEST can allow a greater degree of variation, but potentially lower retirement benefits.