Covid-19 has resulted, on the whole, in a marked co-operation between contracting authorities and their suppliers as everybody focuses on maintaining delivery as far as possible.
The deputy chief actuary at the Government Actuary’s Department has estimated that 1% could be added to Local Government Pension Scheme (LGPS) liabilities if transitional arrangements introduced in 2014 are confirmed to be discriminatory.
With a valuation currently in process, this isn’t the sort of news that employers want to hear.
The Court of Appeal decided in the McCloud case late last year, that the transitional arrangements for employees contributing to public sector pensions when the schemes moved from a final salary to a career average basis, were indirectly discriminatory against younger employees. We wait to see whether the Government will be given leave to appeal to the Supreme Court following the Court of Appeal’s decision. If this decision in the McCloud case is confirmed, this will increase the costs for all public sector schemes, including the LGPS. This is because the pension schemes may have to offer transitional measures to all members. If this is the case, it is estimated that the LGPS liabilities will increase by 1% and possibly increase more in other unfunded public sector schemes.
Given the direction of travel of this case, the Government announced in January that it would be pausing any changes arising from breach of the cost cap mechanism (see our earlier briefing on the cost cap mechanism, here) in the absence of any certainty as to pension costs and funding. The Government has said that it is impossible to assess the value of the current pension arrangements until there is more certainty and the results of the schemes’ four-yearly valuation are received.
In this period of uncertainty, the best, albeit rather pessimistic advice, is to plan for the impact of the courts’ ruling against the Government in the McCloud case. Employers can expect to see a rise in pension costs and should start the budgeting process to be prepared for the worst!
For more information
For more information, please contact Doug Mullen.
As we enter a recession, we have been here before, and a key question is what did we learn and how can we benefit from that learning?
It is anticipated that as lockdown restrictions ease, and particularly with children and young adults returning to education, cases of meningitis will start to rise.
As we continue to emerge from lockdown measures and deal with local measures and the short and long term economic impact of Covid-19, local authorities will need to re-assess how services will be delivered for years to come.
The Government first announced plans for a shared ownership right to buy in October 2019. At the time the sector raised concerns about the impact the plans would have on housing associations ability to borrow. An election and a pandemic later the Government announced, during the CIH Housing Festival last week, the return of the right to shared ownership as part of its Affordable Homes Programme (AHP).
Two final pieces of the possession jigsaw have been published on 15 September 2020. Mr Justice Knowles’ working group on possession proceedings has issued its guidance on the “overall arrangements” for possession proceedings.
One change proposed by the Building Safety Bill is the introduction of a duty holder regime, which will see statutory responsibility for the safety of higher risk buildings placed on key individuals
Throughout this pandemic, the Competition and Markets Authority (CMA) has been publishing various “Statements on Coronavirus” (Statements) which provide guidance on consumer rights during this time.
A recent increase in COVID-19 cases in the UK means new measures are being put in place in an effort to reduce the risk of a second wave. Whilst the impact of COVID-19 continues to be felt, it is important to remain focused on the sector’s road to recovery.
Sometimes half an hour at a conference gives you the reality that has been staring you in the face all along. That was my experience watching “Change is on the Horizon”
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