Agenda item

The Sub-Committee considered a report on the relatively low take up of the Local Government Pension Scheme (LGPS) by County Council employees.

An analysis of eligible employees within the County Council was carried out in May 2011.  This revealed that 25% of employees eligible to join the LGPS were not in the scheme.  This was consistent with a recent study undertaken by GMB which indicated that on average around one in four Council workers had opted out of the LGPS.  The Sub-Committee noted that previous estimates had produced a much higher figure of around 40% of County Council employees not being members of the LGPS.  This was due to the inclusion of casual employees as eligible members.  However, following a regulatory change casual employees were longer eligible and these employees had therefore been removed from the figures. 

An additional analysis of opt-out rates for County Council employees revealed an opt out rate of 36% of new starters during 2010/11.  The profile of employees not joining/opting out, as identified in the analyses, was:

• Of 31,680 posts eligible to join the LGPS, 7,941 (25%) are not members of the Scheme; 
• 83% of non members are female.
• 79% of non members work less than 30 hours per week
• 84% of non members earn less than £10 an hour
• 72% of non members take home less than £10,000 pa
• 53% of non members work in or around schools 

A more detailed analysis was presented and the Sub-Committee felt that it would be helpful to have a male/female breakdown of the detailed results.

There was a general discussion on the results of the analyses and the possible options to encourage a greater take up of the LGPS by County Council employees. The current uncertainty around the future LGPS was also highlighted and members felt that given the circumstances it was not the right time to undertake a campaign to promote Scheme membership. 

The Sub-Committee agreed that officers should be requested to establish focus groups to look at the LGPS and in particular the reasons for employees not taking up membership and to establish what might make the LGPS more attractive.  It was felt that each focus group should be drawn from a particular category of employee i.e. those earning under or over £15,000pa or aged 30 and under.  The results of the focus groups would help the Sub-Committee to give further consideration to measures that could be undertaken to increase LGPS membership.  The Sub-Committee would also need to have regard to any announcements regarding changes to the future operation of the LGPS.

A concern was expressed about misleading information that surrounded the future of the LGPS which was causing some anxiety and upset.  It was felt that improved communications with employees were needed to allay fears and address any misconceptions.  Officers were asked to consider the options for the provision of accurate and up to date information to employees possibly through the annual benefits statement.  Officers felt that the timescale might be too tight but agreed to look at ways in which communications could be improved.

Resolved:

(i)  That employee focus groups be established to explore the reasons for the relatively low take up of the Local Government Pension Scheme.

(ii)  That officers be requested to consider measures to improve communications with employees about the future operation of and changes to the Local Government Pension Scheme.