The financial impact of the abolition of advanced corporation tax relief on local authority pension schemes was fully assessed by all the relevant parties, including the Local Government Association and each pension fund authority at the time of abolition and it was found to be £130 million. The spending plans for local government provided in each successive spending review have taken into account factors like the pressures authorities face, along with the scope for efficiency savings.
The Government have provided significant investment in local government with a 45 per cent. real terms increase in funding between 1997 and 2010-11.
The Local Government Pension Scheme is kept under review to ensure its ongoing affordability and fairness to taxpayers.
The level of employers’ contributions to apply from March 2011 will be set later this year by each of the 89 individual pension fund authorities in England and Wales in conjunction with their fund actuaries following the Scheme actuarial valuation as at 31 March 2010. Contribution rates for participating employers will be set at a level to achieve affordability and satisfy the Scheme’s regulatory requirement for solvency.
The Scheme’s regulatory provision also require employers’ rates to be set at as constant a rate as possible to help participating employers plan and implement their budgets.