The Mayor and London Assembly Members could lose access to the taxpayer funded Local Government Pension Scheme under new Government proposals.
According to the Department for Communities and Local Government (DCLG) , “members of the taxpayer-funded Scheme receive both retirement and death benefits for a flat contribution rate of 6% of their basic and special responsibility allowances.
“In addition, an employer contribution is paid by the local authority: which is taxpayer-funding. Typical council contributions for future service and past service deficits range between 15% and 30% with an average of around 22%.”
The Mayor and Assembly Members are entitled to join the scheme under provisions of the 1999 Greater London Authority Act.
Ministers had originally announced plans to scrap access to the pension scheme for local councillors but are now seeking to extend the ban to City Hall’s politicians also.
The move to end the scheme for councillors was originally justified by the fact they are not salaried but that access to the pension scheme and allowances “have slowly become a form of salary”.
The DCLG says this mindset “could have a negative effect on local democracy and the independence of councillors to represent their communities if it blurred the distinction with paid employees.”
Unlike local councillors, the Mayor and Assembly are salaried however the Department says the Government “is not convinced that membership of the taxpayer-funded Scheme is appropriate for any local elected office holder.”
Ministers have published three proposals for consultation, the first would end all access to the scheme from 2014, the second would allow ‘front bench’ councillors, the Mayor of London and Assembly members to remain in the scheme but not other local politicians, and the third option would retain access to the scheme for all local politicians.
Ministers say their preferred option is to end access to the scheme, however if any post-holders are ultimately allowed to remain eligible for joining, their contributions would need to increase in line with salaries.
A proposal for politicians earning up to £150,000 would see the Mayor’s contribution almost double from 6% to 11.4%.
Commenting on the proposals, a City Hall spokesman said: “The Mayor will be studying the details of the Government’s consultation and will respond in due course.”