Pension Reform General

GREEN PAPER ON OCCUPATIONAL PENSION REFORM

Background

In December 2002 the Department of Work and Pensions (DWP) published a Green Paper 'Simplicity, security and choice: working and saving for retirement'. In June 2003, the Government published the outcome of its consultation exercise under the same title, but with the addition of 'Action on occupational pensions'.

Both publications proposed a package of reforms to occupational pension arrangements. These were designed to ensure that people are adequately provided for in retirement, and to encourage older workers to continue to participate in the labour market. The proposed reforms reflect both increasing life expectancy and the fact that many people want to work longer and to increase their retirement income. One of the reforms proposed to be taken forward was to increase, from 60 to 65, the normal pension age for public servants.

Consultation on pension reform options in 2004 and 2005

In 2004 and 2005, following close working with those responsible for other public service pension schemes and with Scottish Government Departments, Whitehall Departments, employers and representatives in the formulation of the new schemes and following agreement at a UK level, the SPPA published consultation papers for each of the public service schemes that we administer and regulate, proposing options for taking forward the above pension proposals.  These included a proposal that all existing scheme members would retain their current normal pension age (usually 60) for a transitional period until 2013.  From then onwards, all members would transfer into a new scheme with a normal pension age of 65.

UK Public Services Forum

During the above consultations, the UK Government recommenced discussions with staff representatives and employers of the NHS, Teachers and Civil Service schemes at the Public Service Forum.  In October 2005, agreement was reached on a set of Framework Principles to be used as a basis for further negotiations on each of these schemes.  Scheme-specific discussions then continued at a UK level to agree firm proposals for the reforms to the schemes for further consultation.  Consultations for proposals on the Teachers’ scheme in England and Wales took place between May and July 2006, and for the NHS scheme started in September 2006.

Consultation on proposals for Scottish NHS and Teachers’ pension schemes

Following the UK–level discussions on each scheme, and agreement that similar proposals are appropriate for Scotland, the SPPA in conjunction with staff and employer representatives has published consultations on proposals for reforms to the Scottish NHS and Teachers’ pension schemes.  These may be accessed through the appropriate links for each scheme at the top of this page.   Back to top

Following these consultations, and consideration of the responses, the Scottish Government announced, on 14 February 2007 (Press Release) that the principles as set out in the consultation papers were to be taken forward.  Draft regulations to implement the reforms to the Scottish Teachers’ scheme as from 1 April 2007 were also issued that day. Details of the draft regulations maybe accessed through the link to the Teachers’ scheme consultations section at the top of this page.

Agreement has now been reached on the terms of both changes to the current NHS pension scheme and a new scheme for those recruited from 1 April 2008. A joint Cabinet Secretary statement was issued on 18 October confirming the introduction of the changes. Full details of the changers are available on the NHS pension reform page.

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Police and Firefighters’ pension schemes

The Scottish Government has outlined its commitment to introduce pension schemes that are more suited to modern and diverse police and fire services whilst maintaining a UK wide approach on each scheme. Following consultation during 2003 and 2004 new schemes for both police and fire services were introduced for all police officers and firefighters, including those on retained and volunteer duties, appointed from 6 April 2006. The original police and fire schemes will continue to operate but each member will be given the opportunity to join the new scheme during a three month options exercise. Those on retained or volunteer firefighter duties recruited before 6 April 2006, who do not have access to the original firefighters’ pension scheme, will also be given the opportunity to join the new fire scheme. The options exercise for the police will be 1 November 2006 to 31 January 2007 and for the Fire 1 January 2007 to 31 March 2007.

Full details of each new scheme and information on the options exercise can be accessed through the appropriate links for each scheme at the top of this page.     Back to top

Local Government pension scheme

In 2004, the SPPA consultation exercise ‘Facing the Future – Propositions and Principles for an Affordable and Sustainable Local Government Pension Scheme in Scotland’ sought views and feedback on broad reform proposals to ensure sustainability of the Scheme over the longer term.  Discussions on the new scheme are ongoing within the tripartite Scottish Local Government Pensions Advisory Group (SLOGPAG), which has representatives from COSLA, trade unions and the Scottish Government.  The group is working to develop a potential scheme outline during the coming months, with consultation taking place during the summer of 2007.    Further information can be accessed through the appropriate link at the top of this page.     Back to top

How do the Pension Reforms impact on the SPPA IT System?:

To find out how these changes impact on the SPPA IT System and how the Agency plan to address this, please follow the link for information on Pension Change Project

What is my pension scheme doing about the reforms?

To find out what progress your pension scheme has made in implementing the changes proposed in the Green Paper and how you can contribute towards the development of new schemes please click on the appropriate link at the top of this page.    Back to top

 

 

 

 

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