IRRV Alert - week ending 10th March 2023
Headline
News
Consultations
Annual revaluation date change in the Local Government Pension Scheme (LGPS) (9 March 2023)
Consultation outcome
Annual revaluation date change in the Local Government Pension Scheme (LGPS)
- From:
- Department for Levelling Up, Housing and Communities
- Published
- 10 February 2023
- Last updated
- 9 March 2023 — See all updates
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Applies to England and Wales
This consultation has concluded
Download the full outcome
Government response to annual revaluation date change in the Local Government Pension Scheme (LGPS)
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Detail of outcome
A summary of the consultation responses received, the government’s response and the relevant changes that have been made to the regulations.
The annual revaluation date in the Local Government Pension Scheme will move from 1 April to 6 April. This will take revaluation out of scope of the annual allowance calculation for the 2022/23 tax year and for tax years from 2023/24 onwards, the LGPS revaluation will be aligned with the inflationary growth allowed for when calculating how much a pension had grown for annual allowance purposes, as it was before 2016/17.
Original consultation
Summary
This consultation seeks views on changing the LGPS CARE annual revaluation date from 1 April to 6 April. This is to mitigate the impacts of high inflation on annual allowance calculations.
This consultation ran from
8:30am on 10 February 2023 to 11:45pm on 24 February 2023
Consultation description
We are seeking views on changing the LGPS annual revaluation date from 1 April to 6 April. CPI in September 2022, which is used for the LGPS revaluation for the 2022-23 scheme year, was 10.1%. This is markedly higher than CPI in September 2021, used for the HMRC uplift, which was 3.1%. As a result, members would have significantly higher total growth in pension for tax purposes (PIA).
Changing scheme regulations to move the revaluation date from 1 April to 6 April means that inflation would be reflected in the value of the pension after HMRC assess the value of an LGPS pension for the purposes of annual allowance in tax year 2022/23. Thus, by taking revaluation out of scope of the annual allowance calculation, we will reduce the number of members affected by pensions tax for this year.
For tax years from 2023/24 onwards, the LGPS EW Career Average Revalued Earnings (CARE) revaluation would be aligned with the inflationary growth allowed for when calculating how much a pension had grown for annual allowance purposes, as it was before 2016/17.
Documents
Annual revaluation date change in the Local Government Pension Scheme (LGPS)
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Draft Local Government Pension Scheme (Amendment) Regulations 2023
PDF, 238 KB, 10 pages
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Published 10 February 2023
Last updated 9 March 2023 + show all updates