Shortly before the Christmas break, the Department for Communities and Local Government (CLG) issued updated guidance relating to the operation of the Admitted Body Status (ABS) framework within the Local Government Pension Scheme (LGPS). The guidance provides advice on how to deal with transferring employees' pension arrangements as and when services are transferred from a letting authority to private sector contractors. The guidance very helpfully outlines the roles of the administering authority, the letting authority and the contractor in the ABS process. It also provides a welcome summary of the considerations an organisation should take into account when considering obtaining admission to a LGPS fund.
However, some commentators have questioned whether the guidance includes sufficient detail in relation to the vexed issue of "cost sharing", i.e. how letting authorities and contractors can/should share the pension costs involved in an outsourcing exercise. Many stakeholders called for specific direction on this topic.
Nevertheless, the guidance is essential reading for all those involved in the pension issues arising from the transfer of staff from local authorities to the private sector. It should also be noted that CLG has stated that it proposes to again ask practitioners about a range of issues regarding the regulations governing the ABS framework to see if improvements are needed/can be made. The ABS framework is therefore likely to remain subject to ongoing evolution and refinement over the short to medium term.