enhanced cost ceilings set on 2 November 2011 remain unchanged, with no additional money made available.
The majority of unions have agreed to take these Proposed Final Agreements to their Executives as the outcome of negotiations. In parallel with this process, the Government has begun working on the implementation of these scheme designs and will introduce legislation as soon as parliamentary time allows, so that new schemes can be in place by 2015.
LOCAL GOVERNMENT PENSION SCHEME AGREEMENT REACHED
6 June 2012
Employers and unions have announced the details of a new local government pension scheme which will take effect from 1 April 2014.
Professional Pensions has highlighted the seven major features of the scheme:
1. A Career Average Revalued Earnings (CARE) scheme using CPI as the revaluation factor (the current scheme is a final salary scheme).
2. The accrual rate would be 1/49th (the current scheme is 1/60th).
3. There would be no normal scheme pension age, instead each member's Normal Pension Age (NPA) would be their State Pension Age (the current scheme has an NPA of 65). 4. Average member contributions to the scheme would be 6.5% (same as the current scheme) with the rate determined on actual pay (the current scheme determines part- time contribution rates on full time equivalent pay). While there would be no change to average member contributions, the lowest paid would pay the same or less and the highest paid would pay higher contributions on a more progressive scale after tax relief (see table below). 5. Members who have already or are considering opting out of the scheme could instead elect to pay half contributions for half the pension, while still retaining the full value of other benefits. This is known as the 50/50 option (the current scheme has no such flexible option). 6. For current scheme members, benefits for service prior to 1st April are protected, including remaining ‘Rule of 85' protection. Protected past service continues to be based on final salary and current NPA.
7. Where scheme members are outsourced they will be able to stay in the scheme on first and subsequent transfers (currently this is a choice for the new employer).
OTS REPORT - PENSIONER TAXATION
23 January 2013
The office of Tax Simplification has issued its final report on Pensioner Taxation.
The report sets out a number of recommendations for change. The recommendations have been grouped within two key areas, administration and policy (legislation). The recommendations for legislative change, the report states, would remove complexity in the tax system whereas if the government were also to accept the recommendations for administrative change, this would simplify the system, making it much easier for pensioners to comply with their obligations and to claim their entitlements, which the report highlights,
CIPP Policy News Journal
12/04/2013, Page 281 of 362
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