Tower Hamlets Council is preparing a response to the government's consultation on improving access and fairness within the Local Government Pension Scheme (LGPS). The decision was made at a Pensions Committee meeting held on Monday 21 July 2025.
The consultation, titled LGPS: Improving Access and Promoting Fairness
[https://democracy.towerhamlets.gov.uk/documents/s255855/LGPS%20Access%20and%20Fairness%20Consultation.pdf], proposes several changes aimed at making the scheme more equitable and accessible. Key areas under review include survivor benefits, the gender pension gap, opt-out rates, forfeiture rules, and technical amendments related to the McCloud remedy.
One of the primary focuses of the consultation is addressing the gender pension gap. According to a Government Actuary's Department (GAD) analysis included in the consultation, women make up 74% of LGPS members but have, on average, 40% lower accrued pensions than men. The consultation seeks views on measures to address this disparity, including reinstating automatic pension accrual for certain unpaid absences under 31 days, such as unpaid breaks which disproportionately affect female members in local government roles.
Other key proposals in the consultation include:
- Survivor benefits: Amendments to ensure equal treatment of survivors, regardless of the member's sex or the nature of the relationship.
- Opt-out rates: The MHCLG proposes mandatory data collection on members who opt out of the scheme, aiming to understand the reasons behind opt-outs, especially among low-paid or younger employees, and to develop strategies to encourage participation. The proposal would make employers report anonymised opt-out information to help inform future scheme reforms and member engagement.
- Forfeiture rules: Clarifying and potentially reforming the rules around the forfeiture of pension benefits following serious misconduct, to ensure consistency and fairness across administering authorities. The report pack noted that forfeiture provisions, which allow pension benefits to be reduced or withheld following serious misconduct are seen as unclear, inconsistently applied, and in some cases, outdated.
- McCloud remedy technical amendments: Technical changes are proposed to the implementation of the McCloud remedy, ensuring that the rectification of age discrimination in public sector pension schemes is applied consistently and effectively within the LGPS.
The Pensions Committee has delegated authority to officers to draft and submit a response to the consultation by the deadline of 7 August 2025. Councillor Talupta raised concerns about the short timeframe for drafting the consultation, and requested to review the draft response before submission. He stated, Thank you. It is a bit of a short notice. Um, I mean, can it, can that not be brought back to the meeting? Because, so we can have a look at the draft or, uh, some forms. I mean, we wanted to look at the draft.
