Spain's display in the Euro 2012 final was a masterclass of
possession, strategy and teamwork. It may become the blue
print of footballing excellence that other teams aspire to.
Given that they have been successfully playing this way for a
number of years already it looks like it will stand the test of
We could ask whether the same can be said for the LGPS pensions
reform? Is the proposed scheme going to stand the test of time or,
like several of the teams at Euro 2012 will we need to regroup and
return to the drawing board in a few years time?
The proposed scheme offers a 20% increase in accrual rate, the
revaluation rate of CPI is currently higher than most pay awards
and there is protection for anyone within 10 years of retirement in
relation to their retirement age and their benefits. So no saving
Even for a member who is not protected and is retiring at age 66
in 2025, we would require pay growth to outpace CPI by around 1.5%
p.a. on average for each of the next 11 years just so that the
proposed scheme doesn't cost more than the current
So where are the savings?
Actuarial valuations will of course allow for the any savings
that result from younger members having a higher retirement age but
overall any savings are likely to be modest for any fund when
considering the membership as a whole.
A further saving for funds will be from the flexible 50/50
option. How many members will choose this option? And
importantly what type of members will choose this option? It
was assumed that it will generally be the low paid but there are
valid reasons why some higher paid staff may opt out of the full
scheme. The take up rate and member type could have a significant
impact on cost.
The devil is in the detail and there is much still to be agreed
and communicated. However, any actual savings are likely to
be modest and will take some time to come through.
So is it all over and we now have a sustainable, affordable
scheme that will last for 25 years? If I were a betting man,
I'd prefer to put my money on England winning the 2014 World