2016 cost cap valuations conclude for all public service schemes

The Government Actuary’s Department (GAD) has now published its 2016 cost cap valuation reports for all 20 public service pension schemes, including the NHS, teachers and police.

No changes to member benefits or contributions will be required following the valuations, with all schemes within or above the +/- 2 per cent corridor.

If the cost of the scheme moved outside the corridor, corrective action would usually be required.

However, the Public Service Pensions and Judicial Offices Act 2022 provided that ‘ceiling breaches’ from the 2016 cost cap valuations had no effect.

In March, the government announced that the costs of the McCloud remedy would be included in the cost control mechanism for the 2016 valuations.

Schemes that breached the cost cap included the Firefighters' Pension Scheme (England), the Firefighters' Pension Scheme (Wales) and the Police Pension Scheme (England and Wales).

The 2016 valuations were delayed following the Court of Appeal’s judgment in the McCloud and Sargeant cases, with the government pausing the cost control element of the 2016 valuations in January 2019.

In July 2020, it announced that the pause would be lifted, and Treasury directions made in October 2021 set the detailed requirement for completing the valuations.

GAD has now published the reports for all 20 public service schemes across eight workforces: Civil servants, the judiciary, local government workers, teachers, NHS workers, fire and rescue workers, the police, and armed forces.

GAD actuary, Michael Scanlon, who led the project, commented: “The final three reports complete the publication of the outcome of the 2016 round of cost cap valuations.

“These reports are vital actuarial analyses of pension schemes in the Civil Service and in key public service organisations across the UK.”

In October 2021, the government confirmed that it will be implementing reforms to the cost control mechanism and discount rate methodology of public service schemes, including widening the corridor from +/- 2 per cent to +/- 3 per cent of pensionable pay.

    Share Story:

Recent Stories

Making pension engagement enjoyable through technology
Laura Blows speaks to Nick Hall, business development director and Chartered Financial Planner at UK-based Wealth Wizards about the opportunities that technology provides for increasing people’s engagement with pensions and increasing their retirement wealth. Please click here for an edited write-up of the video

ESG & DC – creating the right tools
In the latest of our series of Pensions Age video interviews Francesca Fabrizi, Editor in Chief of Pensions Age is joined by Manuela Sperandeo, Head of Sustainable Indexing EMEA, BlackRock and Mark Guirey, Executive Director, Asset Owner and Consultant Coverage - MSCI to discuss some key trends of ESG investing among UK pension funds today. Please click here for an edited write-up of the video

Savings and finance at retirement
Laura Blows is joined by Claire Felgate, Head of Global Consultant Relations, UK, at BlackRock, to discuss savings and finance at retirement. Please click here for an edited write-up of the video

Global sustainable credit
Laura Blows speaks to Royal London Asset Management senior fund manager, Rachid Semaoune, about global sustainable credit
Global equities and transition investing
Pensions Age editor, Laura Blows speaks to Royal London Asset Management equity investment director, Jonathan Price, about transitioning to sustainable investments within global equities

Advertisement Advertisement Advertisement