The government says new measures will directly benefit people working on the front line in public service
Almost three quarters of the pensions scheme’s members are women(Image: Getty Images)
Major changes have been made to a public service pension scheme which will put “more money in the pockets of hard-working people” when they retire, the government has announced.
The Ministry of Housing, Communities and Local Government said the reforms will make all maternity leave automatically pensionable in order to reduce pension inequality.
Under measures announced today, May 15, the Local Government Pension Scheme (LGPS) for England and Wales will become the first public service pension scheme to make all maternity, shared parental and adoption leave automatically pensionable.
This means when someone is on maternity leave they will still contribute to their pension – reducing one of the most significant gaps in woman’s pensions and helping to close the gender pensions gap women face.
The government said latest estimates show 74 per cent of the scheme’s seven million members are women, and one of the most significant gaps in a woman’s pensionable service is often maternity leave. The change announced today will make the final 13 weeks of maternity leave automatically pensionable.
Deputy Prime Minister, Angela Rayner said: “These historic changes will give hard working street cleaners, librarians, school cooks and other public servants the security that they deserve.
“This is a critical step in ending years of discrimination, backing our dedicated public servants and helping to Make Work Pay.”
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The new measures will also fix issues with current regulations that saw survivors of members of the LGPS receiving smaller pensions on the basis of their relationship type to further address pension inequalities.
These steps, the government says, will directly benefit people working on the front line, serving school lunches, cleaning buildings, managing libraries and cleaning streets.
Minister of State for Local Government and English Devolution, Jim McMahon OBE MP, said: “Having worked in local government for years, I know first-hand how much those who help keep the lights on across the country rely on the Local Government Pension Scheme.
“Through these reforms, we will make sure they are properly rewarded and able to enjoy their hard-earned retirement.”
The government has also vowed to end “loopholes that allow those guilty of serious offences to continue benefitting from the pension scheme,” as part of a crackdown to ensure public servants’ money does not go to those who do not deserve it.
Minister for Pensions Torsten Bell MP said: “Today’s changes will ensure more public servants get the benefits and security they deserve.
“Our reforms to the Local Government Pension Scheme are bringing fairness and equality to workers, while boosting the potential of schemes to drive opportunity and growth in local communities.”
An age cap currently in place that requires an LGPS member to have died before the age of 75 for their survivor to receive a lump sum payment will also be abolished.
The government is also taking steps to keep people in the scheme by enhancing data collection on why people opt out, in a bid to ensure as many people as possible benefit.
A consultation on the proposed reforms to LGPS members’ benefits is now open for 12 weeks, and those affected are encouraged to register their views