My Lords, we realise that there is concern about the potential costs involved in this policy, but we do not believe that it generates unreasonable costs. It is about offering fairness and consistency. The likelihood is that most people who leave local government service for prolonged periods of time to work in
different public service employment would not expect to return. It is therefore most likely that they will transfer their final salary benefits to their new employer’s final salary scheme. However, if liabilities for certain local government funds are increased by the risk of a final salary link attaching to future employment with different local government employers, it would be a matter for individual funds to make appropriate financial arrangements, with the help of scheme regulations if required. Undoubtedly, further discussion will be required on exactly how this should be carried forward. However, we do not believe that it is an insuperable problem for a very good feature of the scheme. We hope very much that negotiations and discussions will take place and that some of the fears of local government actuaries will turn out to be unfounded.