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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.

Swansea Council’s award-winning pension fund has taken another big step in its work towards becoming one of the greenest funds of its kind in the UK.

The £2.1bn fund 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 density.

Now it’s agreed a £30m investment in green energy production companies around the world.

Working with investment firm BlackRock, the fund is investing in a range of solar and wind power infrastructure projects that aim to deliver long-term benefits for the fund and climate change.

Clive Lloyd, chair of the Swansea pension fund committee, said: “This decision is an investment not only in the future of our pension fund but also in the future of our planet.

 “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. 

“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.”

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.

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.”

I am concerned about my financial situation because of the COVID-19 – what can I do?

The Money Advice Service has published guidance on how to deal with the financial effects that you may be suffering due to the coronavirus pandemic. It covers all aspects of your finances including problems with paying mortgage and rent payments, debt and claiming benefits.

Can I stop my pension contributions?

Yes, but you might want to consider joining the 50/50 section of the LGPS instead of opting out. If you do, you’ll pay half your normal contribution rate and build up half your normal pension. You will retain full life and ill health cover and you can move back to the main section whenever you are ready.

You can use the contributions calculator to check what difference this would make to your take home pay.

If after considering the 50/50 section you decide you would like to opt out, you can obtain an opt out form by contacting the City and County of Swansea Pension Fund.  You should take independent financial advice before deciding to opt out.

The coronavirus pandemic is affecting stock markets, will this affect the value of my LGPS pension?  

No, the LGPS is a defined benefit pension scheme which means your pension is based on your salary and how long you’ve paid in. Your pension is not linked to stock market performance, so both your contributions and your pension, whether in payment or not, will be unaffected.

The only exception to this is Additional Voluntary Contributions (AVCs). If you have an AVC, it is possible the value may have reduced – this will depend on the funds you have chosen to invest in. You should contact your AVC provider for more information about this.

I am receiving a pension from the LGPS, will my pension still be paid to me? 

Yes, the City and County of Swansea Pension Fund will prioritise paying pensions during these uncertain times.

If my pay is reduced, what impact will this have on my pension?

This will depend on the reason for the reduction:

–       Sick leave

If your pay is reduced or you receive no pay because you are off work due to sickness or injury, your pension builds up as if you were at work receiving normal pay.

You will continue to pay contributions on any pay you receive during your sick leave.

–       Authorised unpaid leave

If your employer allows or requires you to take a period of unpaid leave, you will not build up any pension for the period unless you choose to pay Additional Pension Contributions (APCs) to purchase the amount of pension lost.

If you choose to pay APCs to purchase the amount of pension lost and you make your election to do this within 30 days of returning to work, the cost will be split between you and your employer.

You can find more information, use an online calculator and download an application form from the LGPS member website.

–       Coronavirus job retention scheme leave

The Government has confirmed that they do not expect public sector organisations, such as councils, to use the coronavirus job retention scheme, except in some very limited cases. Public sector employers should continue to pay staff in the normal way even if they are not at work.

If your employer is able to use the job retention scheme and you both agree, your employer might be able to keep you on the payroll if they’re unable to operate or have no work for you to do because of coronavirus (COVID-19). This is known as being ‘on furlough’.  

If this applies to you, your employer could pay 80% of your wages up to a monthly cap of £2,500. The Government will fund your employer to do this. Employers can choose to top up your pay to 100%, but if you receive less pay when you are ‘on furlough’, the amount of pension you build up during this period will also be reduced. You will continue to pay pension contributions on the pay you receive.

You can pay Additional Pension Contributions (APCs) to buy extra pension to make up for the pension lost during this period. Your employer does not have to pay towards the cost, but they can choose to.  

You can find more information about paying APCs, use an online calculator and download an application form from the LGPS member website.

The GOV.UK website provides more information on the job retention scheme for employees.

–       Emergency Volunteering Leave (EVL)

The Government has introduced a new volunteering scheme to allow the public to contribute to the coronavirus response. The scheme allows workers to take unpaid statutory emergency volunteering leave to volunteer in health and social care authorities.

If you take a period of EVL, your LGPS pension benefits will build up in the same way as if you were working normally.

You will only pay contributions on any actual pay your employer pays you during the period.

–       Other reasons

For information about the impact on your pension if you are away from work for any other reason, such as child related leave or reserve forces leave, see the LGPS member website.

How will coronavirus (COVID-19) affect the service provided by the City and County of Swansea Pension Fund

The City andCounty of Swansea Pension Fund have already adapted their working patterns to ensure they can continue providing a service whilst monitoring the latest Government advice to protect their staff.

They will prioritise paying pensions and processing death benefits, so it may take longer than normal to deal with other work, such as transfers, estimate requests and general queries.

See the City and County of Swansea Pension Fund website to register for the My Pension Online service. You may be able to use the self-service facility to update your details, run calculations and view your previous annual statements.

Could pension scams increase during the Coronavirus (COVID-19) outbreak?

Yes, watch out for scams related to coronavirus (COVID-19). These scams take many forms and could be about insurance policies, pensions transfers, or high-return investment opportunities, including investments in crypto assets.

Scammers are sophisticated, opportunistic and will try many things. They’re also very likely to target the vulnerable. Beware of investments that appear to be too good be true. 

To help protect yourself you should:

• reject offers that come out of the blue
• beware of adverts on social media channels and paid for/sponsored adverts online
• use the Financial Services Register and Warning List to check who you’re dealing with.
• do not click links or open emails from senders you don’t already know
• avoid being rushed or pressured into making a decision
• if a firm calls you unexpectedly, use the contact details on the Register to check that you’re dealing with the genuine firm
• not give out personal details (bank details, address, existing insurance/pensions/investment details).

If you suspect a scam, call Action Fraud straight away on 0300 123 2040.

In accordance with direction from Central Government concerning the ongoing threat of the spread of the Coronavirus Pension Section staff will be homeworking until further notice. 

While we will make every effort to continue to provide a service delivery that is fit for purpose we would ask that under the current circumstance you will be patient if there is a delay with your request/process as this is a unique situation that we as a Section are in.   

We will endeavour to speed the process of communication by sending correspondence via email and would appreciate where possible a response via the same means.

There has been a lot of disturbing news lately about the fall in stock markets and the potential resultant impact on defined contribution pensions.

LGPS defined benefit pensions are not linked to stock market performance and are set out in statute.

Although short term investment values may vary, the LGPS as a long-term investor is securely managed to address any longer term impacts.

LGPS Scheme members can therefore be assured that both their contributions and their pension, whether in payment or built up to date, will be unaffected.

Our online portal has a new look. If you are already registered, you will still be able to use your current log in details. This new portal is optimised for easy use on mobile devices.

As an active member, you will be able to perform your very own benefit calculations from the data held on your pension record, so that you can actively plan for your retirement. You will be able to perform as many calculations as you wish and in future will not have to wait for your annual benefit statement to arrive before finding out what you can expect to receive when you retire. You will also be able to view and update your personal details, which includes changing your death grant expression of wish if need be.

By accessing My Pension Online, you will be able to:

• view / update your basic details;
• perform benefit calculations;
• view financial details;
• access all relevant forms;
• access your Annual Benefit Statements;
• access routine correspondence.

To register, visit www.swanseapensionfund.org.uk. The first step is to request an activation key. This will be sent to your email address. Once you have your activation key, log back in and complete your registration.