Issue - meetings

To receive a report outlining the legislative changes already passed and the subsequent effect on discretionary compensation payments and Local Government Pension scheme regulations.

The Director: Resources gave an overview on the Government’s recent

introduction of a cap on Public Sector exit payments.

Members would recall that the Exit Payment Cap (£95k cap) had been a topic of

Government discussion since 2015. There had been little movement on the details until they were reconsidered in 2019/2020, which had led to changes being officially passed by parliament in October 2020.

The Exit Payment cap introduced limits to the total exit package which was payable

by Public Sector employers to £95,000. The Cap applied to the total amount paid to the employee, including the pension strain cost (capitalised cost) and notice periods in excess of three months but did not include the employer NI contributions.

Currently the Local Government Pension scheme regulations require that where an

employee is over age 55 and is made redundant, their pension is automatically

released. Due to the conflict RBWM, who administered the Berkshire Local Government Pension scheme and were currently unable to give clarity on payments to those who facing were currently facing redundancy. It was important to note that there was no current redundancy expected at Bracknell Forest.  

There were currently test cases going on up and down the country which will hopefully bring clarity.

RESOLVED that

      i.        the Employment Committee noted the contents of the report which provides and update on national changes affecting severance entitlements for local government employees.

     ii.        the view of the Corporate Management Team be endorsed, that any significant restructure proposals be temporarily put on hold in the current financial year to ensure that individual employees are not adversely affected by the current uncertainty around exit cap implications for LGPS employees.