On the go: The Pensions and Lifetime Savings Association has warned it may take more than two years for the Local Government Pension Scheme to implement the McCloud remedy, casting doubt on the government’s proposed timeframe.
The PLSA said in its response to the McCloud consultation that the 12-month timeframe proposed by the government to aggregate previous periods of LGPS membership may not be sufficient, recommending instead that the scheme’s administering authorities are given the option of extending this 12-month period at their discretion.
The association said that, in some cases, members have said that changes required by the McCloud remedy may take more than 24 months to fully implement.
Pensions Expert has reported previously on the delays and administrative headaches caused by the McCloud problem, with a recent estimate suggesting McCloud may push back LGPS progress on dashboards by as much as three years.
Commenting on the consultation response, Joe Dabrowski, PLSA’s head of defined benefit, LGPS and standards, said: “Implementing these changes will present a significant challenge to funds and their administrators, given the number of members who could potentially be impacted.
“A substantial number of pension records will need to be updated, while benefit calculations relating to members who have left the scheme since 2014 will need to be reviewed.
“This will be a very large undertaking, particularly at a time where pensions administrators are already stretched due to the impact of Covid-19 and an increasing workload resulting from [guaranteed minimum pension] rectification, as well as projects to improve their data and systems,” Mr Dabrowski added.
The PLSA spoke to LGPS members and found that almost 40 per cent thought this process would take more than a year to complete, he continued.
The amount of resource that would need to be dedicated to implementing such significant changes meant many members believed a 12 to 24-month implementation period would be more realistic.
“It is therefore important that administering authorities are given enough time to implement the proposals to ensure their other tasks, such as benefit payments, do not suffer as a result,” Mr Dabrowski said.
