Employers will be allowed to make more flexible contributions to the Local Government Pension Scheme (LGPS) between valuations after the proposals were fully backed by almost three-quarters (73 per cent) of consultation respondents.

The proposals, which seek to take shifts in covenant strength and workforce composition into account, were also supported with reservations by 20 per cent of respondents, with just 8 per cent stating that they would not support the change.

In its response, the Ministry for Housing, Communities and Local Government concluded the power to review contributions should be available in respect of all employers, with administering authorities permitted to conduct reviews after “significant changes” to covenants or liabilities following requests from employers.

The administering authorities are expected to consider the impact of the review on any other employers involved in the fund in question.

Administering authorities have also been granted the power to spread an employer’s exit payments over a period when they may no longer have active members of the LGPS scheme, following strong support from consultation respondents.

Finally, the government has agreed to introduce deferred employer status and deferred debt agreements (DDA) to the LGPS, stating that authorities will be expected to consider all available evidence and use “judgement and local knowledge” before allowing exiting employers to enter a DDA.

These DDA’s would see employers that had left the scheme in question making secondary contributions based on valuations, while also meeting administration obligations.

The response follows a consultation from the government department on proposals to amend LGPS in England and Wales, which took place between 8 May and 31 July, and received responses from 279 individuals and organisations.

The department said employers and administering authorities had called for early implementation of the changes as a result of the Covid-19 pandemic.

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