11 July 2012
The Welsh Local Government Association (WLGA) has today criticised a TaxPayers’ Alliance report that suggests the local government pension scheme suffers from an imbalance in the amount of council staff drawing their pension compared to those actively paying into the scheme.
Responding to the report, WLGA Chief Executive Steve Thomas CBE said:
“The TaxPayers’ Alliance report offers a highly misleading view of local government pensions. Through the Local Government Association (LGA), the WLGA has worked extensively with central Government, employers and trade unions to ensure that the local government pension scheme offers long term financial viability and security, for employees and tax payers alike.
“Local government pensions are different in character to those in other parts of the public sector. While schemes for teachers, health service workers and civil servants are unfunded, local government pension funds in England and Wales control assets of over £145bn. This is invested extensively within the British economy, adding to overall profitability.
“In 2008 we also re-indexed pensions and increased employee contributions. With members contributing between 5.5% and 7.5% depending on their annual salary, individual pension payments are directly related to what our members put in. The scheme will see further legislative readjustment in 2014, ensuring that local government pension payments will remain financially secure well into the future.
“While the numbers of claimants may be rising in relation to the number of people contributing to the scheme, this is the case across many pension schemes in the UK. Even in light of this, the local government pension remains a robust, financially secure scheme that offers support to those who have spent their careers delivering vital front-line services in Wales. Whilst public sector pension schemes may compare favourably with some private sector schemes, the whole pension debate should not be about a ‘race to the bottom’. With an average pension for LGPS retirees of £4,235 per annum, the scheme offers true value for money.”
The WLGA position on council worker pensions has also been confirmed by the UK Minister for Local Government, Bob Neill MP. In welcoming the proposed pension reforms offered by the LGA and trade unions in May of this year, he stated “they are a key step towards having a Local Government Pension Scheme that is affordable, sustainable and fair to taxpayers and employees alike in place by April 2014.”
For more information contact: Stuart Hodges