A major review of the benefit structure and associated funding arrangements of the Social Housing Pension Scheme (SHPS) has been undertaken over the last two years.
Employers will now have choice as to the benefit structure(s) and funding arrangements to apply to their organisation. As from April 2007 there will be a choice of three benefit structures: final salary with 1/60th accruals (present structure), final salary with 1/70th accruals and CARE (Career Average Revalued Earnings) with a 1/60th accruals benefit structure. Employers can operate different benefit structures for existing and new employees.
As part of the review process there has been widespread consultation with both Employers and Employees.
Employers were required, by 31 October 2006, to notify the benefit structure(s) and funding arrangements that will apply to their organisation as from April 2007.
The key results for Employers currently offering the Scheme to all employees are summarised below:
100% of Employers will retain defined benefit pension arrangements for existing members (92% are retaining final salary with 1/60th accruals)
- 99.2% of Employers will continue to offer defined benefit pension arrangements to new employees (56.5% will offer final salary with 1/60th accruals, 9.6% will offer final salary with 1/70th accruals and 33.1% the CARE benefit structure)
- 0.8% of Employers (6 Employers) have closed the SHPS arrangements to new employees
These results demonstrate massive support for continued defined benefit pension provision for employees through the new benefit structure arrangements being offered by SHPS. No Employer has closed the Scheme to future accruals for the existing members of SHPS.