Insolvency in the education sector and the Local Government Pension Scheme
Produced in partnership with Laura Sayer of Mills & Reeve LLP
Insolvency in the education sector and the Local Government Pension Scheme

The following Restructuring & Insolvency guidance note Produced in partnership with Laura Sayer of Mills & Reeve LLP provides comprehensive and up to date legal information covering:

  • Insolvency in the education sector and the Local Government Pension Scheme
  • What is the Local Government Pension Scheme?
  • Participation status of LGPS employers
  • Transfer of Undertakings (Protection of Employees) Regulations (TUPE)
  • LGPS—exit debts arising as a result of an insolvency or a restructuring
  • Education sector—employer structures with liability for an exit debt

What is the Local Government Pension Scheme?

The main pension scheme for local authorities is the Local Government Pension Scheme (LGPS). The LGPS is a statutory, public service pension scheme for local government and related employees in England and Wales. There are separate schemes in Scotland and Northern Ireland. For more detail on these generally see: Local government pensions—overview.

Participation in the LGPS as an admission body, a scheduled body or designated body comes with a number of significant obligations and risks. For further information on the categories of employers that participate in the LGPS see Practice Note: The Local Government Pension Scheme—admission agreements.

One of the biggest obligations will be the funding of benefits in the LGPS, which is generally well known and anticipated by employers participating in the fund. One of the lesser known risks, however, is what happens on the failure of certain types of LGPS employer due to insolvency or other employer restructuring. This has received a great deal of attention in the context of employers in the education sector due to funding cuts.

This Practice Note explores the LGPS issues that need to be considered where there is an insolvency or restructuring of such employers operating in the education sector. It does not cover how these employers should seek to manage the financial risks of their participation