Agenda item

The Committee considered a report of the Director of Corporate Resources which sought approval for certain policy decisions afforded to the County Council as a scheme employer under the provisions of the Local Government Pension Scheme (LGPS). A copy of the report, marked ‘Agenda Item 9’, is filed with these minutes.

Arising from discussion, the following points were noted:

(i)         The Director outlined that the review of employer discretions relating to Shared Cost Additional Voluntary Contributions through a salary sacrifice scheme would enable individuals to make extra contributions towards their pension, whilst also allowing both individuals and employers to save on tax and National Insurance contributions. It was noted that additional voluntary contributions would not be matched by the employer.

(ii)        With regards to governance of the scheme, the Local Pension Committee was responsible for the management of the Leicestershire LGPS. The Committee’s purpose was to safeguard and manage the assets held within the Fund. The Committee had a duty to determine the investment and funding strategy and all other relevant policies for the Fund and to deliver this in accordance with the best interests of Fund members.

(iii)       It was noted that an employee’s pension would usually be payable from their Normal Pension Age which was linked to the State Pension Age. An employee could choose to retire and draw their pension at any time between age 55 and 75. HM Revenue and Customs (HMRC) rules regarding pension savings outlined limits on the amount of pension savings an individual could make within a year and the lump sum which could be taken before extra tax would be payable. There was no limit on the amount of pension contributions an individual could make. However, individuals would not be in receipt of tax relief on contributions exceeding their taxable pay paid into their pension within a tax year. There were no restrictions in individuals drawing their pension and subsequently commencing further employment with the Council.

(iv)      In response to a question asked regarding national influence on local pension scheme investments, the Director stated that the Government was undertaking a consultation which included a proposal to boost LGPS investment within localities and regions in the UK by requiring administering authorities to set out their approach to local investment within their investment strategies.

(v)        A question was asked relating to the timing of the proposal to allow payment of Shared Cost Additional Voluntary Contribution via a salary sacrifice scheme and why it had not been proposed sooner. The Director agreed to provide members with this information to members following the meeting.

(vi)      It was suggested that it would be beneficial for members to receive an overview of the LGPS in order to provide a broader understanding of how the Scheme was managed and governed. The Director acknowledged this and agreed to provide all elected members with a briefing relating to the LGPS.

RESOLVED:

(a).      That the change to Leicestershire County Council’s pension mandatory discretion under Local Government Pension Scheme (LGPS) Regulations, contained within Appendix 1 of the report, to allow payment of Shared Cost Additional Voluntary Contribution via a Salary Sacrifice Scheme, be approved.

(b).      That non mandatory discretion under LGPS Regulations contained within Appendix 3 of the report, be noted.

(c).      That Leicestershire County Council’s operational approach to Pensions Regulations, contained within Appendix 4 of the report, be noted.

(d).      That the Director of Corporate Resources be requested to provide the Committee with details relating to the timing of the proposal to allow payment of Shared Cost Additional Voluntary Contribution via a Salary Sacrifice Scheme.

(e).      That the Director of Corporate Resources be requested to provide all elected members with a briefing relating to the LGPS.