Pension news - No detriment as a result of a reduction in employers contribution
Members have been querying the reduction in the employers contribution to the Local Government Pension Scheme (LGPS) as shown in their pay slips . The scheme is administered by the Greater Manchester Pension Fund (GMPF) who undertake a triennial review of employers contributions. Unfortunately this news was not shared with pay roll providers or the trade unions in advance thus causing unnecessary concern.
It is important to note that the GMPF have issued a statement* to say that even though some individuals may see a reduction in the amount that is deducted from pay and paid to GMPF due to the change in the employers contribution rate, this does not impact the accrual of your pension benefits in any way. The full statement can be seen below*
Further information about the LGPS can also be found here https://www.gmpf.org.uk/
Local Government Pension Scheme Contribution Rates statement from GMPF
Employee
The Greater Manchester Pension Fund (GMPF) have reviewed and revised the pensionable pay bandings which determine the percentage of contributions individuals make into the pension scheme.
From 1st April 2023 GMPF have set the new salary bandings* as
|
Band |
Actual pensionable pay |
Main section contribution rate |
50/50 section contribution rate |
|
1 |
Up to £16,500 |
5.50% |
2.75% |
|
2 |
£16,501 to £25,900 |
5.80% |
2.90% |
|
3 |
£25,901 to £42,100 |
6.50% |
3.25% |
|
4 |
£42,101 to £53,300 |
6.80% |
3.40% |
|
5 |
£53,301 to £74,700 |
8.50% |
4.25% |
|
6 |
£74,701 to £105,900 |
9.90% |
4.95% |
|
7 |
£105,901 to £124,800 |
10.50% |
5.25% |
|
8 |
£124,801 to £187,200 |
11.40% |
5.70% |
|
9 |
£187,201 or more |
12.50% |
6.25% |
*Note from Napo: these are pensionable pay bandings used by the GMPF and do not relate to your own specific grade within the Probation service.
Employer
Every three years the Actuary for the Pension Fund undertakes a valuation of the employer’s liability in the scheme against it’s assets built up, to check the rate of contributions paid into the scheme will continue to cover the total employer liability for current and future pensions.
Under the recent review, the Actuary provided information that showed the assets were higher than the total liability, and the report outcome recommended to the LGPS Trustee and Finance Committee in HMPPS, that the employer contribution rate be reduced. From 1 April 2023 the employer contribution rate will reduce from 29.7% to 26.5%.
It should be noted that, even though some individuals may see a reduction in the amount that is deducted and paid to GMPF due to the change in the contribution rate, and the fact the employer rate has reduced, this does not impact the accrual of their pension benefits in any way