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.
On 8 May 2019, the Ministry of Housing, Communities and Local Government published a consultation regarding changes to the Local Government Pension Scheme (LGPS). The changes are outlined below.
Deferring exit payments
As the LGPS rules currently stand, in a business restructure where the last member of the LGPS transfers from one business to another, an exit payment will usually be triggered and must be paid by the transferring business. The consultation document looks to address the burden this imposes during group restructuring and seeks to “transport” the pension to the new employer so that no exit payment is triggered.
This will occur, so the consultation outlines, in a “takeover” and “merger” situation, but rather inconveniently, the consultation does not define the parameters of these terms. This, therefore, may apply in insolvency situations and so, as ever, our advice would be to carry out your due diligence carefully and ensure you understand the business you are taking over, warts and all!
Exit credits – are they fair?
Since May 2018, employers with employees in the LGPS who are in surplus when a leaving valuation is made are paid an “exit credit”. Increasingly, however, contracting authorities are sharing the risks of participation in the LGPS with service providers. This could see service providers taking little risk but receiving an exit credit, even though the costs of participation in the LGPS have been under-written by the contracting authority. With that in mind, this consultation looks to redress that by proposing that no exit credit be awarded in that situation.
Finally, the consultation document looks to amend the valuation cycle from its current three-year period to four years (in line with other public sector schemes). In addition, LGPS funds will be able to undertake interim valuations to enable them to take action between valuations, and it will permit administering authorities to amend employers’ contribution rates in-between valuations. This will give some welcome flexibility when pensions are being buffeted by the waves of economic stress and unfavourable court decisions (as above!).
For more information, please contact Doug Mullen.
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”
Following our recent e-briefing on Possession Notices, Helen Tucker and Emilie Pownall from our housing litigation team discuss the impact of the changes on social landlords.
Not only has the possession stay been extended until 20 September, the notice periods to be given to tenants has been extended in certain circumstances with some important exceptions.
The Court has confirmed that a party cannot withhold its consent in order to re-write the original bargain.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.