Purpose

The contract for the provision of the shared
cost AVC scheme for employees in the Local Government Pension
Scheme to further save towards their retirement will expire on 2
May 2026. The Authority is looking to re-procure a contract for the
continued provision of this scheme.

There are currently 518 employees with salary sacrifice agreements
in place for this scheme. The continued offer will ensure current
and future employees retain the option of saving towards their
retirement on top of their LGPS, while making savings on their tax
and National Insurance contributions. The council also achieves
savings via employer national insurance savings arising from those
participating in the scheme and the reduction on their gross
pay.

The decision to be taken relates to procurement of the scheme which
has a significant published contract value, with the council paying
costs to administer the scheme as a percentage of the value of the
salary sacrificed sums. Based on current council costs and trends
in increasing employee participation, this will potentially reach
and go beyond £500k over the course of the contract of 4
years. Additionally, savings arising from participation in the
scheme were £262.5k in 24/25 and are projected to be
£340k in 25/26 and follow a similar trend in future
years.

This is an in/out spend resulting in the council saving on the
participation rather than spending from existing budgets.

Decision

To undertake a procurement exercise for the
Shared Cost Additional Voluntary Contributions scheme. The current
contract arrangements end on 2 May 2026.

Reasons for the decision

The contract for the Council’s current
Shared Cost AVC scheme expire on 2 May 2026. The authority is
looking to re-procure a provider for this scheme.

There are currently 518 employees with salary sacrifice agreements
in place for this scheme. The continued offer will ensure current
and future employees retain the option of saving towards their
retirement on top of their LGPS, while making savings on their tax
and National Insurance contributions. The council also achieves
savings via employer national insurance savings arising from those
participating in the scheme and the reduction on their gross
pay.

The decision to be taken relates to procurement of the scheme which
has a significant published contract value, with the council paying
costs to administer the scheme as a percentage of the value of the
salary sacrificed sums. Based on current council costs and trends
in increasing employee participation, this will potentially reach
and go beyond £500k over the course of the contract of 4
years.

This is an in/out spend resulting in the council saving on the
participation rather than spending from existing budgets.

Alternative options considered

None given.