Charities and the Local Government Pension Scheme
Produced in partnership with Ruth Bamforth of Walker Morris
Charities and the Local Government Pension Scheme

The following Restructuring & Insolvency guidance note Produced in partnership with Ruth Bamforth of Walker Morris provides comprehensive and up to date legal information covering:

  • Charities and the Local Government Pension Scheme
  • Overview of the Local Government Pension Scheme
  • Overview of local government outsourcing
  • Issues for charities and other not for profit organisations when considering bidding for a local authority contract
  • Issues for charities on exiting the LGPS

The charities sector in the UK is significant in size. There is a wide range of pension provision across the sector. Many charities are facing financial pressures as a result of a combination of factors including:

  1. increased running costs

  2. a decrease in the amount of giving

  3. investment underperformance

There is an increasing trend among local authorities to seek to outsource certain of their services to the private and third sectors. These services often include housing services, elderly care and youth services. Many of these services are taken on by charities and other not for profit organisations. In this note, where we refer to a ‘charity’ we also refer to a ‘not for profit organisation’. However, it is important that any charity which takes on a local authority contract understands the pensions implications. In September 2015 it was reported, for example, that the Multiple Sclerosis Society was to sell a support centre in order to meet costs relating to its Local Government Pension Scheme membership.

This Practice Note considers the particular pensions issues which arise when a charity takes on outsourced services from a local authority. For more detail about pensions, outsourcing and the Local Government Pension Scheme, please see Practice Note: Local government outsourcing—the pension issues. For more detail about charities and defined benefit pension schemes more generally, please see Practice Note: Defined