The Department of Infrastructure has unveiled proposals to reform the Local Government Superannuation Scheme (LGSS).
It estimates annual savings of £0.5m for Douglas Council and £0.9m for the other local authorities.
The changes aim to align the LGSS more closely with the Government Unified Scheme (GUS) 2011, including adjustments to accrual rates and employee contributions.
Actuarial consultants reviewed the Scheme after Douglas Council, the administering authority, requested reforms.
Key proposals include shifting from a 1/60th accrual rate to a banded system, mirroring GUS, which would reduce employer costs by -4.2%. An additional -1% saving could come from increasing employee contribution rates by 1%, though lower-paid workers may see smaller hikes.
Consultations included presentations for employees, employers, and unions, with mixed feedback. Six individual members raised concerns about pension impacts, while Braddan, Castletown, and Port Erin Commissioners accepted the changes.
The Minister for Infrastructure, Dr Haywood, stated: “Whilst there is no current timescale for implementation, there is scope for the Department to review its legislative priorities.
“Given the recognised cost savings to the local authorities, there is clearly benefit in this being implemented.”
Drafting new regulations has been delayed due to resource constraints, with external support estimated at £50,000–£100,000. The Department is now assessing whether to reprioritise the work.
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