Atkin trustees, actuaries, consultants & administrators

Admitted Bodies

Taking on ex-public sector employees usually means taking on their existing pension and redundancy rights. Consequently, employers can end up saddled with unanticipated and significant costs.

The central government policy of tighter fiscal control has forced local authorities around the country to cut back on the level of services provided. As a consequence, the contractors that provide these services have been under pressure to reduce costs.

Previously, when companies tendered for public sector work they would also usually be required to enter the relevant Local Government Pension Scheme under admitted bodies status under which they would take on, not only the future service rights, but also the past service pension rights as well. Whilst some companies managed to agree a guarantee from the local councils to cover their part of any deficit this was not always the case and even when in place these documents can be complicated and open to interpretation.

As the companies participating in the scheme come under increased pressure, the Local Government Schemes have reacted by taking a harder line on recovery plans to try and get as much money into the scheme as possible. However, with bond yields being so low, few can afford the exit charge that they would need to pay to withdraw from the scheme.

In such a situation, it is important that the companies do not rely solely upon the advice provided by the Local Government Pension Scheme and its advisors. This will, of course, reflect their own needs and priorities rather than those of the company.

Company directors should be aware that there is definitely scope for negotiation when it comes to discussing contribution rates or exit charges.

Whilst it is always possible to negotiate with individual LGPS on the exit charges, many admitted bodies may find that the use of Contingent Assets, which can be used as security against a shortfall can be used to renegotiate their contribution rates in the short term before seeking to exit at a less costly future time.

We have also had success in negotiating with LGPSs to agree slightly different interpretation of both the Scheme Rules and Guarantee documentation leaving both the members and company in a better position than they were previously.

Dealing with the unprecedented amount of change and imminent reform to public sector pensions will be challenging. You can rely on us to simplify complex information and help you consider all the options. We work closely with you to understand your needs and offer tailored advice with clear recommendations.


Thank you. Excellent communication, a rarity in this world of quick communication.

Member, MESL Pension Scheme