The cost of public sector pensions in Scotland Prepared for the Auditor General for Scotland and the Accounts Commission


Appendix 3. The six main public sector pension schemes in Scotland



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Appendix 3. The six main public sector pension schemes in Scotland

Each of the six main schemes is established and regulated under separate legislation. All six schemes have been subject to reform in recent years. The arrows () indicate the direction of changes that have resulted



Scheme

Scheme type and negotiation arrangements

Recent pension reforms




Type of scheme

Employer

Terms & conditions negotiation

Year of last reform

Cap and share?

(and cap per cent)



Accrual rate

Normal pension age

LGPS 1

Funded, defined benefit

Councils (and 600 or so admitted bodies)

Scotland (COSLA, trade unions and Scottish Government)

April 2009

No

80ths plus lump sum

60ths



65 (and rule 
of 85 phasing out) 2

NHS

Unfunded, defined benefit

NHS (Scotland)

Scotland

(but follow UK scheme)



April 2008

Yes

15%


80ths plus lump sum

60ths



60 65

Teachers

Unfunded, defined benefit

Councils

Scotland

(but follow UK scheme)



April 2007

Yes

14%


80ths plus lump sum

60ths



60 65

Civil service 3

Unfunded, defined benefit

UK civil service

UK-wide

July 2007

Yes,

20%


80ths plus lump sum

60ths

or 43rds


60 65

Police

Unfunded, defined benefit

Police forces

UK-wide

April 2006

No

60ths plus lump sum

70ths



50 4 & 55 55

Firefighters

Unfunded, defined benefit

Fire and rescue services

UK-wide

April 2006

No

60ths

55 60

Notes

1. The eleven LGPS funds are: Aberdeen; Borders; Dumfries & Galloway; Falkirk; Fife; Highland; Lothian; Shetland; Orkney; Strathclyde; and Tayside.

2. The normal pension age for the LGPS is 65; however until 2020 the rule of 85 allows employees aged 60 or more, with protected rights, who have a combined age and length of service of 85 years to retire with unreduced pension.

3. For the civil service there is a GB-wide pension scheme. We have estimated all figures for the civil service in this report based on members who work in the Scottish Administration being three per cent of the GB-wide total.

4. For the main police scheme officers may retire after 30 years with full pension. The minimum qualifying age for this is 48½ years.

5. For the police and firefighters’ schemes, the employer contributions have been calculated as their pension payments minus employee contributions. This arrangement is changing for 2010/2011.



Scheme

Scheme membership at March 2010

Contribution rates

Scheme cost 2009/10 (£ millions)




Number of active members

Number of deferred members

Number of pensioners and dependants

Employers

Employees

Annual employees’ contributions

Annual employer contributions

Total contributions

Pension payments (including lump sums)

Net cash flow

(Total contributions less Pension payments)



LGPS

219,585

91,399

141,448

Typically 18-22%

6

5.5 ‑ 12%

(tiered by salary band)


£270m

£836m

£1,106m

£840m

£266m

NHS

161,600

63,504

75,353

13.5%

6 5 ‑ 8.5%

(tiered by salary band)



£299m

£581m

£879m

£655m

£222m

Teachers

78,765

27,083

59,153

14.9%

6.4%

£155m

£360m

£516m

£756m

-£240m

Civil service 3

17,500

10,518

18,049

18.9%

1.5 3.5%

£12m

£85m

£97m

£135m

-£38m

Police

16,963

1,942

14,487

24.7%

11 9.5%

£63m

£245m 5

£308m

£308m

0

Firefighters’

5,398

354

5,225

21.8% (old scheme) 11.5% (new scheme)

11 8.5%

 £15m

£67m 5

£82m

£82m

0


































All schemes

499,811

194,800

313,715

-

-

£814m

£2,174m

£2,988m

£2,778m

£210m



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