Fears that members are ‘opting out of LGPS over cost-of-living crisis’
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The head of pensions at the Local Government Association has expressed concern over members opting out of the Local Government Pension Scheme (LGPS) due to the rise in inflation and the cost-of-living crisis.
Joanne Donnelly, addressing the Pensions and Lifetime Savings Association local authority conference, said: “My personal concern is about opt outs from members because of the cost of living. I personally feel very lucky to be a member of the LGPS, but it is expensive.”
Donnelly said that to prevent members from leaving the LGPS, employers needed to improve their communications with employees, as she was concerned that the basics surrounding contribution rates and benefits are misunderstood.
She added: “A lot of people don’t seem to know that effectively you are getting free money from your employer for being in a pension scheme, and the more people we help understand that the better.”
Back to the 1970s
At the same session, Cllr Roger Phillips, chair of the Local Government Pension Scheme Advisory Board, said: “Inflation is something that is like a horror show coming back again. It is something that those of us who have lived through the 70s and the early 80s can remember what it can do.”
He added that employee representatives and trade unions play a crucial role in preventing members from leaving the pension scheme.
“I think if people know properly what the amount of investment is, this is the best investment anyone can make,” he said.
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