Yesterday the Government published its response to the consultation on changes to the cost control mechanism for public service pension schemes. A summary of the response, where relevant to the LGPS (NI), is below:
- It proposes moving to a ‘reformed scheme only’ design i.e. only considering the costs for the cost cap process of the post-31 March 2015 schemes in Northern Ireland.
- Widening the corridor from 2% to 3% of pensionable pay.
- Introducing an economic check. The Government remains of the view that an economic check linked to expected long-term GDP is appropriate for the LGPS. However, it does acknowledge that the LGPS, as a funded scheme, will potentially need a different approach and more work with LGPS stakeholders is needed. The Government proposes working with the Scheme Advisory Board in England and Wales to see if its separate cost management process can be adapted to become the economic check. In addition, the Government has stated that the LGPS Scheme Advisory Boards in Scotland and Northern Ireland may wish to consider introducing a similar separate cost management process to that in the LGPS in England and Wales and that they will support colleagues in the Devolved Administrations if they wish to do so.
The full response to the consultation can be viewed at Public service pensions: cost control mechanism consultation on the Government website.