Agenda item

The purpose of this report is to update the Board on recent developments within the Local Government Pension Scheme (LGPS) regulatory environment and any recent consultations issued which would have a significant impact on the Fund.

John Smith (Pensions Manager, Brent Council) introduced a report from the Corporate Director Finance & Resources that updated the Board on recent developments within the Local Government Pension Scheme (LGPS) regulatory environment along with recent consultations issued which were likely to impact on the Fund.

In terms of key updates, the following issues were highlighted:

·            Consultation on the Local Government Pension Scheme England and Wales; Access and Fairness – In May 2025, the Ministry of Housing, Communities and Local Government (MHCLG) published its LGPS Access and Fairness consultation (attached as Appendix 1 to the report) which was focussed on promoting equal access to the LGPS scheme in terms of its benefits and fairness.  The consultation was due to close on 7 August 2025 and was felt to provide an opportunity for a comprehensive review of existing Pension Regulations.  Further detail was provided on the key areas covered within section 3.2 of the report which included:

Ø   The proposal is to equalise the survivor pension entitlement of all members, regardless of the sex of the eligible member or their survivor, and to update regulations on survivor benefits and death grants.

Ø   The proposal to amend the Benefits Regulations to formally remove the nomination requirement for all deaths that occurred between 1 April 2008 and 31 March 2014.

Ø   The proposal to amend the 2013 Regulations to remove reference to an age 75 limit on eligibility for death grant payments, and to amend the 2014 Regulations to disapply the age 75 limit on death grants for individuals to whom the rules of the previous schemes continue to apply and who had died on or after 1 April 2014.

Ø   The removal of the requirement to pay death grants to the personal representatives once two years had elapsed after the administrators became aware of the death,

Ø   The proposal to align the cost of buying back authorised unpaid leave over 30 days with standard member contribution rates.

Ø   The proposal to update the definition of child-related leave to include all periods of additional maternity, adoption and shared parental leave without pay.

Ø   The proposal to monitor and report on opt-outs.

Ø   Proposals intended to make the forfeiture process work better and address known issues with current regulations.

Ø   The proposal to extend de-minimis (special type of trivial commutation) payments commutation to pre-2008 leavers.

Ø   The proposal to offer pre-2014 leavers the option to use their additional voluntary contributions (AVCs) to buy additional LGPS pension if they crystallise their AVCs at the same time as their deferred benefits.

Ø   The proposal to remove the five-year limit for refunds.

Ø   The proposal to limit short-term child’s pensions under the 1995 and 1997 Regulations (pre-2008 leavers).

Taken overall, whilst noting the aim underpinning the proposed changes in seeking to advance access and fairness it was pointed out that many of the proposals were also necessary to ensure compliance with the law.

·            In concluding his update, John Smith drew members' attention to a recent ombudsman decision concerning Mr L. vs the City of Wolverhampton. The case involved the awarding of a Death Grant to a close relative, which was subsequently challenged by their partner. The court's decision concluded that provided all potential beneficiaries acted reasonably and followed the correct procedure, the ombudsman would not be minded to overturn the authority's exercise of discretion.

Following the overview and having commended the quality and comprehensive nature of the update provided, the Chair invited comments from Board members. The key points raised were as follows:

·            In noting the technical nature of the proposals contained within the Government consultation being undertaken on the Access and Fairness to the Local Government Pension Scheme details were sought on any potential negative impacts identified in relation to operation of the Pension Scheme or its members.  In response confirmation was provided that the changes had been focussed in promoting access and fairness for scheme members.  No potentially significant negative impacts were identified, with members advised that the changes were also expected to address unintended and adverse regulatory effects that had operated to the detriment of scheme members.

·            Having received assurance regarding the impacts of the proposed changes, members enquired which changes might be implemented into active pension schemes and when this would occur.  Officers responded positively, anticipating that most, if not all, would be introduced. This expectation was based on the fact that the regulatory changes had already been widely implemented throughout many public sector and similar pension schemes.  Members were advised that officers would be responding to the consultation and would also advocate for similar actions to be taken more frequently in future.  In terms of timescales for implementation, these were identified as more difficult to predict as they were dependent on the outcome of the consultation process and with the Ministry of Housing, Communities & Local Government (MHCLG) having ultimate authority over when changes would be implemented.

With no additional issues or comments raised, the Board welcomed the update provided and RESOLVED to note the overall report and recent developments outlined in relation to the LGPS.