UK – The government has launched a consultation on the future of local government pensions – saying “affordability and sustainability” are key.

"Changes already made to the scheme have recognised that people are living longer, working patterns are changing, and that there is a need to deal with the changing ratio of the economically active population to those in retirement,” said Phil Hope, a minister in the Office of the Deputy Prime Minister.

“Our agenda seeks to meet the social and economic challenges of these demographic changes by encouraging people to work longer, to help stabilise the affordability of pension provision for taxpayers and to provide an attractive and accessible pensions framework for all employees and employers.”

“Ministers have expressed their commitment to retaining a final salary arrangement for local government employees,” the office said in a statement.

Hope added that this was a “real opportunity to embrace emerging pension policy and develop a flexible and attractive scheme".

Hope said the proposals “aim to develop a modern, new-look LGPS to better serve the future needs of local government, its workforce and taxpayers, on an affordable and sustainable basis”.

The consultation includes phased transition between work and retirement, the provision of pension benefits to partners of Local Government employees, and improving access to the LGPS for low-paid and part-time workers.

The government said the first phase of the consultation would last six months until end of March 2005. It would set up a development group representing key parties such as the Local Government Association, the Trades Union Congress and professional bodies.

“It is proposed that any new arrangements for the LGPS should be in place by 2008.”

The proposals outlined today aim to develop a modern, new-look LGPS to better serve the future needs of local government, its workforce and taxpayers, on an affordable and sustainable basis.