Hutton opts for CARE without cap

Lord Hutton published his final report on public sector pension provision on 10th March. It contained 27 recommendations for change amongst its 215 pages.

The major points to note in respect of the LGPS are;

• Link to final salary to be retained for current service

• Uncapped CARE for future service in the new scheme

• Tiered contributions to ensure higher earners pay more

• Average earning revaluation for future benefits

• Retirement Age linked to State Pension Age

• Flexibility to take benefits early with reductions

• Ceiling on employer costs with a default mechanism to ensure costs remain below

• Move towards a common framework for all public sector schemes apart from uniformed

• Restrict membership to exclude private sector employees

• All LGPS funds to have formal Pension Boards with member nominees

• Some form of independent oversight of governance and administration

• Extend examples of shared service administration across LGPS

LPFA have produced this diagramatic summary of the recommendations (PDF 217kb).

Also available to download as a PDF (195kb) is the Executive Summary

The full report is available on the HM treasury website at www.hm-treasury.gov.uk/pensionscommission