Suspending Reality – LGPS Bulletin 38

David Davison

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In mid 2018 the LGPS (Scotland) Regulations were amended (as outlined in Bulletin 21 – Hope Springs Eternal to introduce the concept of a suspension of the cessation debt when an employer exits a Fund. This brought a welcome and much needed option to assist admission bodies, many of whom are charities, in better managing their LGPS liabilities.

Unfortunately to date Funds have chosen not to utilise this additional flexibility through the adoption of alternative solutions in some cases but primarily by choosing to just ignore the change and carry on as previously.

In January SPPA issued a consultation to identify who had used the new provisions and how often, and to consider what changes might be needed to Regulation to have Funds more frequently utilise them. It also asked for suggestions about what other measures could be considered to add additional flexibility to the exit process.

Here is a link to our submission which looks to make some practical proposals how a more consistent, equitable and flexible approach could be adopted. We would hope to engage further with SPPA and the Funds to provide any additional support necessary to reach mutually beneficial solutions.

David Davison

Post by David Davison

Specialist consultant on pensions strategy for corporate, public sector and not for profit employers

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