The Government has today published the Government Actuary’s final report on his review of the cost control mechanism.
The Government is committed to providing public service pensions that are fair for public sector workers and for taxpayers. The cost control mechanism was introduced into the valuation process for public service pension schemes in the Public Service Pensions Act 2013 following consultation with member representatives. It was designed to ensure a fair balance of risk with regard to the cost of providing defined benefit (DB) public service pension schemes between members of those schemes and the taxpayer.
I commissioned the Government Actuary to conduct a review of the mechanism amidst concerns that it was not operating in line with its original objectives. These objectives are:
- To protect taxpayers from unforeseen costs
- To maintain the value of pension schemes to the members
- To provide stability and certainty to benefit levels – the mechanism should only be triggered by ‘extraordinary, unpredictable events’
The Government Actuary’s report sets out his findings and makes a number of recommendations on possible changes to the mechanism. The Government will respond to this report in due course.
The report can be found on the following link: https://www.gov.uk/government/publications/cost-control-mechanism-government-actuarys-review-final-report
This statement has also been made in the House of Lords