Local Government Pension Scheme

Wednesday 2nd July 2014 Written Statements

[The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)]

Tameside metropolitan borough council, the operator of the Greater Manchester pension fund, has asked that we provide a guarantee that the Department will meet employer or employee pension contributions for employees that were former probation trust employees who have been transferred or are recruited to community rehabilitation companies while in ownership of the Secretary of State. The guarantee will be limited to where a community rehabilitation company becomes insolvent. I can inform the House today that we will provide such a guarantee in respect of each community rehabilitation company and a parliamentary minute, which sets out the detail of the guarantee, has been laid in both Houses.

The provision of the guarantee ensures continued pension provision in the local government pension scheme for staff following the sale of shares in community rehabilitation companies as part of a public procurement exercise.

The provision of the guarantee is considered to be value for money for the taxpayer as it will avoid community rehabilitation companies having to obtain appropriate security in relation to their pension obligations which would have been funded by the Secretary of State. Further, in some cases the inability to obtain the appropriate security may have prevented some companies from participating in the tender process.

I have placed copies of the associated documents in the Libraries of both Houses.