The Department for Levelling Up, Housing & Communities has produced a FAQ document to help members understand the McCloud Judgment and if their pension is affected.
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Merry Christmas
To all of our members, the City and County of Swansea Pension Fund wishes you a Merry Christmas and a Happy New Year
Pension Payments for March 2023
Swansea Council is working towards an upgrade to the Oracle system which is responsible for fundamental back office processes eg payroll, pensioner payments etc and as such we are working towards an April 2023 go live using Oracle Fusion which is a cloud-hosted function and will support the Council’s modernisation journey.
In March 2023 you will receive your pension payment on the 27th as opposed to the 31st March; this is to ensure that all planning and associated activities relating to the implementation does not impact any payments due to our customers and/or the project plan.
I would like to thank you for your cooperation and understanding in this matter.
Statement from the Wales Pension Partnership and the LGPS in Wales
We are deeply saddened by the situation in Ukraine and our thoughts are with the
Ukrainian people.
Our total exposure to Russian Investments is minimal at less than 1%. Even so, in light of the
terrible events we have witnessed and the economic sanctions imposed internationally, as a
collective we have decided to divest from these holdings as soon as is practically possible.
Given the circumstances we do not believe that engagement with these companies presents
a viable option.
Cllr Clive Lloyd
For and behalf of the Wales Pension Partnership and the LGPS in Wales
Pension fund on course to hit green target
Swansea Council’s award-winning pension fund is on course to cut its carbon footprint to 50% of index levels by next year, full Council will be told next week.
The £2.1bn fund looking after the retirement funds of 47,000 members has already taken major steps to reduce its carbon footprint by cutting the amount of cash invested in oil companies and other organisations with a high carbon intensity.
And earlier this year it agreed a £30m investment in green energy production companies around the world.
In a special report to Council next week that looks at Swansea’s commitment to tackling climate change, new figures reveal that the fund’s carbon footprint is down 47% from index levels and on course to more than match the ambitious 50% reduction target set four years ago.
On top of that the fund has also committed money to a UK investment fund that supports creating homes for rent aimed at ‘squeezed middle-income’ families who can’t afford mortgages and don’t qualify for social housing.
Clive Lloyd, chair of the Swansea Pension Fund committee, said: “The fund is delivering for its 47,000 members, it is delivering for the future of the planet and it is delivering for people who need affordable homes to rent.
“We were the first local government pension scheme in Wales – and among only a small number in the world – to commission a review of our equity investment portfolio to find out the exact extent of our carbon and fossil fuel related investments.
“Since then we have moved £0.5bn of assets into low carbon index tracking funds which has reduced further what was already a low level of investments in carbon-related industries.
“Earlier this year, working with investment firm BlackRock, the fund started investing in a range of solar and wind power infrastructure projects that aim to deliver long-term sustainable benefits for the fund and contribute to the transition to a cleaner economy.
“This latest step is part of an on-going effort to gain attractive returns for pensioners, reduce our carbon footprint and support climate-friendly energy production.”
He said the pension fund has also committed itself to supporting two community-based affordable housing strategies operated by BMO Global Asset Management and Man Group. The idea behind the initiative is to provide quality private rented accommodation or share-ownership housing in the UK at below the prevailing market rent in the chosen area using the recognised Flex rent /Rowntree methodology for determining local affordability.
Cllr Lloyd said: “This is not social housing but affordable housing for families who cannot afford market rents and do not qualify for social housing, the ‘squeezed middle’.”
The Swansea fund – which Swansea Council manages for Swansea, Neath Port Talbot as well as a number of other employers in the area – has already been recognised at the LAPF Investments Awards, which celebrate outstanding achievement by pension funds and service providers.
Swansea won the award for the fund with the Best Approach to Sustainable Investment in the UK in 2019. It’s also been nominated for Best Investment Strategy and Best Investment Innovation in this year’s awards, thanks to an equity protection programme that saved the fund £9m when the global equity market fell by -20% earlier this year due to the Covid-19 outbreak.
Cllr Lloyd added: “Last year we passed a motion in Swansea declaring a Climate Emergency and we urged the UK government to do the same.
“We are making decisions and taking practical steps every day that are making a real difference but we know we can and we will do more. We are determined to make Swansea the most green and energy efficient council in Wales.”
Age descrimination court case and the LGPS
What is the McCloud case about?
When the Government reformed public service pension schemes in 2014 and 2015 they introduced protections for older members. In December 2018, the Court of Appeal ruled that younger members of the Judges’ and Firefighters’ Pension schemes have been discriminated against because the protections do not apply to them.
The Government has confirmed that there will be changes to all main public sector schemes, including the LGPS, to remove this age discrimination. This ruling is often called the ‘McCloud judgment’ after a member of the Judges’ Pension Scheme involved in the case.
What does it mean for the LGPS?
When the LGPS changed from a final salary to a career average pension scheme in 2014, members who were within 10 years of their Normal Pension Age (usually age 65) on 1 April 2012 were provided with a protection called the ‘underpin’. When a protected member takes their pension, the benefits payable under the career average and final salary schemes are compared and the higher amount is paid.
The Government will need to provide younger members with a protection equal to the underpin protection provided to older members in order to remove the discrimination. It is currently consulting on the changes that need to be made to do this.
Will the changes apply to me?
The Government intend for the changes to apply to members who were in service on 31 March 2012 and also have service after 31 March 2014 (without a break of more than five years).
If you left the scheme before 1 April 2014 you built up benefits in the final salary scheme only. These changes will not affect your pension.
Will my pension increase?
Most members are unlikely to see an increase to their pension, and where an increase is applied, it is likely to be small. This is because most members will build up a higher pension in the career average pension scheme than they would have under the final salary scheme.
When would any changes come into effect?
We do not expect any changes to be introduced before April 2022.
What do I need to do?
You do not need to take any action. The Government has confirmed that members who qualify for protection do not need to make a claim for the changes to apply to them.
I have already left the LGPS, will the changes apply to me?
If you qualify for protection and have membership in the LGPS after 31 March 2014 the changes will apply to you, even if you have left the scheme. I have taken payment of my LGPS pension, will the changes apply to me?
If you qualify for protection and have membership in the LGPS after 31 March 2014 the changes will apply to you, even if you are receiving your pension from the LGPS.