COUNCIL WELCOMES HIGH COURT RULING OVER PENSION FUND - Rugby and Daventry Radio Station, Midlands UK            


Written by on June 3, 2021

Article Published on Thursday June 3, 2021 11:37 AM by


West Northamptonshire Council has welcomed a High Court ruling which has avoided it having to pay a £6.5 million ‘exit credit’ to a private contractor. 

In 2011 Daventry District and Northampton Borough Councils – now both part of West Northamptonshire Council – entered into a seven-year environmental services contract with Enterprise Managed Services (EMS), which became part of the Amey group during the contract 

Council staff who transferred to EMS remained in the Local Government Pension Scheme (LGPS), and under the contact the two councils took on responsibility for the contributions and retained the risk. 

In the last months of the contract, a change in legislation introduced ‘exit credits’ for employers when they left the LGPS, meaning Amey/Enterprise could have a claim on the pension fund’s £6.5 notional million surplus. 

The Government later amended the 2018 regulations, allowing councils to make the decision whether any exit credit should be paid, taking all relevant factors into account.

Amey/Enterprise challenged the Government amendments in a judicial review action, which yesterday (Thursday 27 May) decided in favour of the Government. The former councils had been involved in the action as ‘interested parties’ in support of the Government. 

Councillor Malcom Longley, Portfolio Holder for Finance on West Northamptonshire Council, said: “We welcome the High Court’s decision, which avoids this council and others like it being bound to pay contractors unfair windfalls from pension funds, which would ultimately need to be made up by taxpayers.  

“The court has found that the Government was right to correct its earlier error, and now the regulations allow the Council, as pension fund administrator, to fairly consider if Amey should receive money from the pension fund, and if so how much that would be.” 

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