Agenda item

The purpose of this report is to update the committee on recent developments within the LGPS regulatory environment and any recent consultations issued which have would have a significant impact on the Fund.

I have added 7 appendices including LGPS monthly bulletins to this report.

The purpose of this report was to update the Board on recent developments within the LGPS regulatory environment and any recent consultations issued which have would have a significant impact on the Fund.  Mr Sawan Shah (Senior Finance Analyst) introduced the report and answered Members’ questions.  He gave updates on the following main areas:

Exit Cap payments.

·         After extensive review of the application of the Cap, the Government had concluded that the Cap may have had unintended consequences and the (2020) Regulations should be revoked. In light of the exit cap regulations, it was necessary to alter the early retirement pension strain factors to ensure they were still fit for purpose. With the dis-application of the £95k exit cap, the GPC considered a recommendation to revert to the previous fund specific factors.

Lifetime Allowance (LTA)

·         In the Budget on 03 March 2021, the Chancellor announced that the Lifetime Allowance (LTA) – the maximum amount (of pension plus lump sum) that can be drawn from a pension scheme without triggering an extra tax charge – would, instead of being increased each year in line with the annual (September) CPI figure, be frozen at its current level (£1,073,100) until April 2026.

Good Governance

·         On 15 February 2021, the LGPS Scheme Advisory Board (SAB), published its final report (phase 3) on Good Governance and Action Plan for submission to the Ministry of Housing, Communities and Local Government (MHCLG) for consideration.  The full Phase 3 report was attached in Appendix 3. The Fund believed it was compliant with many of the recommendations and that officers would produce an action plan of areas on non-compliance and report to the Pension Board at a later meeting.

Minimum age

·         The normal minimum pension age is the minimum age at which most pension savers can access their pensions without incurring an unauthorised payments tax charge (unless they are taking their pension due to ill-health). It is currently age 55.  The government has confirmed its intention to legislate to increase the normal minimum pension age from 55 to age 57 on 6 April 2028.

Members welcomed the report and with no further issues raised, the Chair confirmed that all members had followed the discussions and thanked members and officers for their contribution.  It was RESOLVED;

That the LGPS updates be noted.