To ask the Chancellor of the Exchequer, whether it remains his policy to allow the cost-sharing principle for the public service pension scheme to continue for at least the 25 years initially agreed with unions in 2015.
22 March 2022
The cost control mechanism is designed to ensure a fair balance of risk between public service pension scheme members and taxpayers with respect to the costs of those schemes.
Following a review of the mechanism by the Government Actuary, and a full and open public consultation process, the Government confirmed that it will implement three reforms to the mechanism. These reforms will be implemented from the 2020 valuations onwards.
The Government does not believe these reforms breach the 25-year guarantee. The elements protected by the 25-year guarantee are set out in legislation, (namely, section 22 of the Public Service Pensions Act 2013), and the cost control mechanism is not included. The reforms will make the mechanism more stable and allow it to operate more in line with its objectives. The reforms will make changes to member benefits less likely, in line with the spirit of the 25-year guarantee.