Aon is urging LGPS Administering Authorities to carry out impact assessments to see how many of their scheme members may fall into the scope of the McCloud judgment.
At a recent Aon webinar on the issues emerging from McCloud, which was attended by 130 LGPS fund representatives, 50% of respondents to a poll said that they expected that data is likely to present the biggest challenge when implementing the necessary changes.
Aon said administering authorities should now take steps to:
- Carry out an impact assessment to see how many members may fall into scope of McCloud;
- Get their core team together to consider how they will implement McCloud and how it will impact resources, other projects and business as usual;
- Get ready to collect data from employers once guidance is issued (this is expected to be in the coming weeks)
- Respond to the forthcoming consultation to help shape the final regulations.
Alison Murray, partner at Aon, said: “It’s clear that LGPS schemes face a real administrative challenge to meet the requirements of McCloud.
“Given the significant number of members who will need their benefits checked – and irrespective of whether they will actually increase – implementing changes to legislation resulting from the McCloud judgment is likely to represent the largest administrative headache for public service schemes since the 2014/15 reforms.”
Virginia Burke, a senior consultant at Aon specialising in McCloud, said: “From what we have seen and heard in client discussions, we would encourage all LGPS The situation is slightly different in the LGPS, where protection was via an underpin, and Aon has been helping many of its LGPS clients assess the impact on their funds to enable them to start planning how they will implement the new legislation.
“Work to make the changes happen is expected to encompass data collection, backdating pension calculations and changes to ongoing administration processes, systems and communications.”