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Agenda item

Amendment to the Council's LGPS Discretionary Policy to Implement a Shared Cost Additional Voluntary Contribution Scheme

This report requests approval of the Committee of an amendment to the Council’s LGPS Discretionary Policy Statement in order to comply with The Local Government Pension Scheme Regulations 2013 (the “LGPS Regulations”), to implement a Shared Cost Additional Voluntary Contribution Scheme (SCAVC) for employees.

Minutes:

The Committee considered the proposal to amend the

Council’s LGPS Discretionary Policy Statement in order to comply with The Local Government Pension Scheme Regulations 2013 (the “LGPS Regulations”), to implement a Shared Cost Additional Voluntary Contribution Scheme (SCAVC) for employees. It was noted that the Committee had deferred a decision on the amendment to the policy at their 15 February 2022 meeting to receive additional information relating to the scheme and its provider.

 

Officers confirmed that they had enquired with Her Majesties Revenues and Customs (HMRC) regarding their position on the scheme. HMRC noted that they carry out pre and post tests on payroll and any concern regarding the implementation of the scheme would be confirmed following those tests. Officers did confirm however, that multiple other Council’s had already joined the scheme ran by AVC Wise and HMRC had not raised concerns following tests on these Councils payrolls. Officers also provided in the report a breakdown of the grades of those currently benefiting from the Councils Additional Voluntary Contribution (AVC) scheme and noted they would expect 90% of those on the current AVC to move over to the SCAVC if implemented.

 

The Committee thanked officers for the checks with HMRC and agreed that with officers that in the event HMRC had issues with the scheme when tests were undertaken that the scheme wouldn’t be implemented. Members enquired whether the scheme would take additional monies from the LGPS from those taking out pensions in future years, officers confirmed the scheme was separate from the LGPS and it would not be affected.

 

Members discussed how well the scheme could support staff. It was noted that the scheme would allow staff to save additional money for retirement and would be a benefit above that of the current AVC as it would provide savings on national insurance. It was confirmed that the scheme could be accessed by any member of City of York Council staff, the only barrier to entry would be to where a payment would take an employee’s pay below the national minimum wage, but noting that there is no set payment and payments are by choice of the employee. It was discussed that those who would benefit the most from the scheme would be those at higher grades who would be most able to sacrifice current salaries, this was discussed in relation to the current breakdown of grades of those who accessed the Council’s current AVC, as it was noted that, the percentage of staff in each grade accessing the current AVC was higher for those at higher grades.

 

 

The Committee voted 3 in favour and 1 abstention (Cllr Kilbane) to amend Council policy to read ‘The Council will exercise discretion to allow Local Government Pension Scheme Members to contribute to a shared cost salary sacrifice scheme additional voluntary contribution (SSSCAVC) scheme. The amount of these

employer Shared Cost AVC contributions will not exceed the

amount of salary sacrificed by the employee. This is a

Council discretion which is subject to the employee meeting

the Council’s conditions for acceptance into the salary

sacrifice Shared Cost AVC scheme and may be withdrawn or

changed at any time. The Council will not enter into any other form of shared cost AVC.’

 

Resolved:

 

                      i.         To amend Council policy to read ‘The Council will exercise discretion to allow Local Government Pension Scheme Members to contribute to a shared cost salary sacrifice scheme additional voluntary contribution (SSSCAVC) scheme. The amount of these employer Shared Cost AVC contributions will not exceed the amount of salary sacrificed by the employee. This is a Council discretion which is subject to the employee meeting the Council’s conditions for acceptance into the salary sacrifice Shared Cost AVC scheme and may be withdrawn or changed at any time. The Council will not enter into any other form of shared cost AVC.

 

Reason:     To provide City of York Council staff access to the new SSSCAVC scheme.

Supporting documents:

 

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