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Chairman’s bulletin – March 2025

Your trustee board met on 20th March 2025. We were delighted to welcome John Curley to the Board. John had been selected as our new Member Nominated Director by a panel. There were eleven applicants, and we interviewed three. John was the most appropriate candidate out of a very strong group. John is a pensioner of the LRSFA and had long service with LR.

At the meeting the main items for discussion were around how best to plan for the next triennial valuation of the Defined Benefit (DB) section of the fund which will be valued as at 31 March 2025, and considerations on ways to improve the Defined Contribution (DC) Section offering.

At the Autumn Budget the Chancellor announced that most unused pension funds and death benefits would be brought into a person’s estate for inheritance tax purposes from 6 April 2027. The Trustee were given training on the effects the proposed inheritance tax changes may have on the LRSFA membership, and the complexities that this brings not only to those who had made plans under the existing regulations, but also to the administration of the plan after a member’s death should the proposed changes affect that individual and their estate. The Trustee will monitor the consultation and review the communications sent to members and see how we can provide information on this proposed change to help where possible, but it is important that members seek professional advice on such matters. In the meantime, you can review more details on the government website.

In accordance with the LRSFA Rules, the Trustee had requested that LR consent to the Trustee exercising its power to grant discretionary increases to pensions in excess of guaranteed minimum pensions built up before 6 April 1997. LR has duly taken into account this request and, after thoroughly considering the request, decided not to consent to an increase. The Trustee is therefore unable to award a discretionary increase for 1 April 2025.

In considering the Trustee’s request, LR has advised they have taken into account the Trustee’s view and the reasons it put forward for granting a discretionary increase. In particular, LR has noted they are mindful of the Trustee’s comments regarding the inflationary pressures that pensioners face.

LR has advised they have considered the potential costs of awarding discretionary increases in the context of other general cost and price pressures that LR is currently facing, given the markets it operates in, as well as the need to balance the impact of decisions made as a result of the market pressure across current and former employees.

LR also noted that they are mindful of the potential impact granting any discretionary increases could have on the long-term security of all members’ benefits (having regard to the year on year cost in the form of increased liabilities to the Scheme of any increase awarded in a given year).

Lastly, Guaranteed Minimum Pension (GMP) is part of the Defined Benefit (DB) pension built up by many people between 6 April 1978 and 5 April 1997. Following a clarification of the law regarding how GMP was treated, all UK pension arrangements with GMP must check their records to make sure that men and women have been treated equally. At the same time, we have also been checking our records match those held by His Majesty’s Revenue and Customs (HMRC) and doing a wider review of members DB benefits. In April an initial letter has been sent out to all DB members with information about the review and how your benefits may be affected. A copy of the letter relevant to your benefit can be found in the document store.

Please note this does not impact members who have DC only benefits.

With best wishes

Nicholas Godden

State Pension increase

In April 2024, the government announced that the State Pension would increase by 8.5% due to the continuation of the “triple lock”.

This means the State Pension rises each year by inflation, average earnings or 2.5%, whichever is highest. To find out more about the State Pension and check your expected State Pension age, visit the government's website.

You may also have other benefits available to you. According to Age UK, up to £2.2bn of Pension Credit and Housing Benefit goes unclaimed by older people each year. If you think you could be missing out, use the Age UK benefits calculator.

The rising cost of living

Data from the Office for National Statistics show that UK households are being hit by the steepest annual rise in inflation since the early 1980s. The soaring cost of gas, electricity, groceries and petrol, means that living standards are being squeezed from every direction.

If you're struggling, visit Money Helper or call 0800 138 7777 to speak to an adviser. Trained staff can give you advice about how to keep on top of your finances and how to make the most of your income.

Scams rise as cost of living bites

Scammers are capitalising on the cost-of-living crisis by contacting people speculatively with offers of rebates, grants and support payments. Local councils, government departments, or energy providers will not call, text or email you to let you know about them. They will never ask you to provide sensitive or personal identifying information.

To receive further information about scams, follow guidance from Citizens Advice.