Pension Scheme reforms to boost benefits and tackle inequality
Changes will mean more money in the pockets of hard-working people when they reach retirement, delivering on government鈥檚 Plan for Change
Street cleaners, school cooks and other dedicated public servants are set to benefit from a package of reforms to the Local Government Pension Scheme (LGPS) that will end discrimination and lead to more money in people鈥檚 pockets.聽聽聽聽聽
Today鈥檚 measures build on the government鈥檚 wider Make Work Pay agenda that will back millions of workers by banning exploitative zero-hours contracts and ending 鈥楩ire and Rehire鈥� and 鈥楩ire and Replace鈥� practices.
Under measures announced today, the Local Government Pension Scheme for England and Wales will become the first public service pension scheme - of which three quarters are women - to make all maternity, shared parental and adoption leave automatically pensionable.聽
And issues with current regulations that saw survivors of members receiving smaller pensions on the basis of their relationship type will be fixed 鈥� ending historic inequalities.聽聽
These steps will directly benefit people working on the front line, serving school lunches, cleaning buildings, managing libraries and cleaning streets.聽
Loopholes that allow those guilty of serious offences to continue benefitting from the pension scheme will also be closed, as part of a crackdown to ensure public servants鈥� money does not go to those who do not deserve it.聽聽聽
Deputy Prime Minister, Angela Rayner said:聽
鈥淭hese historic changes will give hard working street cleaners, librarians, school cooks and other public servants the security that they deserve.聽聽
鈥淭his is a critical step in ending years of discrimination, backing our dedicated public servants and helping to Make Work Pay.鈥�
Minister of State for Local Government and English Devolution, Jim McMahon OBE MP, said:聽
鈥淗aving worked in local government for years, I know first-hand how much those who help keep the lights on across the country rely on the Local Government Pension Scheme.聽
鈥淭hrough these reforms, we will make sure they are properly rewarded and able to enjoy their hard-earned retirement.鈥�
Minister for Pensions Torsten Bell MP said: 聽
鈥淭oday鈥檚 changes will ensure more public servants get the benefits and security they deserve. 聽
鈥淥ur reforms to the Local Government Pension Scheme are bringing fairness and equality to workers, while boosting the potential of schemes to drive opportunity and growth in local communities.鈥�
Latest estimates show 74 per cent of the scheme鈥檚 seven million members are women, and one of the most significant gaps in a woman鈥檚 pensionable service is often maternity leave.鈥�
Making the final 13 weeks鈥� leave automatically pensionable will be a significant improvement and help close the gender pensions gap women face.鈥�犅�
Another issue the reforms aim to address is a disparity in survivor benefits 鈥� which are paid to the scheme鈥檚 members鈥� partners upon their death.鈥犅�
Due to issues with the existing regulations, there have been instances where those in same-sex marriages and civil partnerships receive a more generous pension entitlement than those in opposite-sex marriages and partnerships. But under proposed reforms, all discrimination on the basis of the sex of those affected will be removed.鈥�犅�
In addition, an age cap currently in place that requires an LGPS member to have died before the age of 75 for their survivor to receive a lump sum payment will also be abolished.鈥�犅�
The government is also taking steps to keep people in the scheme by enhancing data collection on why people opt out, in a bid to ensure as many people as possible benefit.鈥�犅�
A consultation on the proposed reforms to LGPS members鈥� benefits is now open for 12 weeks, and those affected are encouraged to register their views
Other measures the government is taking to make work pay include:聽聽
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Banning exploitative zero-hours contracts聽聽
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Ending 鈥楩ire and Rehire鈥� and 鈥楩ire and Replace鈥� practices聽聽
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Strengthening statutory sick pay