In our response, CFG urges DCLG to use this opportunity to address two key challenges facing charities – and other admitted bodies – in the LGPS:
• Administering authorities transferring liability for past accrual of benefits – and any related deficit – to the most recent employer.
• Calculating cessation debt on a gilt basis and the immediate triggering of this debt when a charity ceases to accrue liabilities.
CFG makes four recommendations:
1) Liabilities should be segregated so that they remain with the employer who accrued them.
2) Local contracting authorities should take steps to improve the understanding of the risks being passed onto suppliers.
3) Cessation debts should take into account the discount rate applied in the LGPS on-going funding valuation plus a discontinuance margin.
4) Organisations should be able to cease to accrue liabilities without automatically triggering a cessation debt.
Download the full consultation response.
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