Sixty Second Summary
Factoring in the changes
02 Nov 2018 - Estimated reading time: 1 min
LGPS benefits are generally defined in Regulations; however, where a member is converting their benefits from one form into another, an actuarial calculation is required, to allow a fair exchange in benefit value to take place. For instance, a member wishing to take their benefits to another scheme will need to have those converted into a lump sum payment.
For most of these conversion calculations, the Government Actuary’s Department sets the terms. These are most typically for transfers in and out of an LGPS Fund, for members taking early retirement, and where a member’s benefits are subject to a divorce Pension Sharing Order.
In Monday’s Budget, the Chancellor announced an immediate reduction in the “SCAPE discount rate” which underpins many Government actuarial calculations; this therefore impacts some of these LGPS member benefit conversions. The LGA e-mail gave some details of the operational impact.
Download our summary as we consider what impact the new SCAPE discount rate will have.