Home Menu

Members' home

Our people icon.jpg

Treasury responds to consultation on public service pensions cost control mechanism

The government has published its response to the recent consultation on the cost control mechanism (CCM).

What is the cost control mechanism?

The Independent Public Service Pensions Commission recommended in 2011 that the new public service pension schemes should include an employer cost control mechanism to protect taxpayers from unforeseen increases in scheme costs. While the commission recommended a mechanism to protect the taxpayer from increased cost, the final negotiated mechanism is symmetrical and so also maintains the value of pensions to members when costs fall.

Why was there a consultation on it?

In light of the impact of the McCloud judgement, and previous outcomes from the mechanism, the government launched a consultation seeking views on three possible changes to the mechanism, which NAHT submitted a response to.

Consultation outcome

In its response to the consultation, the Treasury confirmed it would be taking forward the three reform proposals outlined in the consultation.

  • The first was moving to a "reformed scheme-only design". This means that the mechanism will only considers past and future service in the reformed schemes; with costs related to legacy schemes excluded.
  • The second was widening the corridor from plus/minus 2 per cent of pensionable pay to plus/minus 3 per cent, with the aim being to ensure consistency between the benefits being assessed and the set potentially being adjusted, thereby creating more consistency in the system.
  • The third was the introduction of an "economic check" in order that the cost-control mechanism is able to reflect the actual cost to the government of providing pension benefits. Under this system, a breach of the mechanism "would only be implemented if it would still have occurred had any changes in the long-term economic assumptions have been considered", the government's consultation explained.

NAHT response

NAHT opposed the review of the mechanism, pressing for no alterations to be made and that all public servants be offered access to the career average sections of public sector pension schemes in the ordinary way post 1 April 2022. Within this, we outlined our fundamental opposition to the proposal to introduce an economic check into the mechanism.

NAHT will continue to engage with government on the alterations, through our role on the pension scheme advisory board.

What's the timeline for this?

The Treasury is aiming to implement all three proposals in time for the 2020 public sector scheme valuations.

First published 20 October 2021

NAHT Life logo

NAHT Life gives you the opportunity to continue your membership of the biggest union for school leaders both in post and in retirement.

 

NAHT Life focuses on helping retired members receive excellent trade union services and allows you to continue to play an active volunteer role within NAHT regions and branches, if that’s what you choose to do!

Please note to qualify for the benefits of NAHT Life membership you must join NAHT life within six months of retiring. 

Please ensure NAHT has your correct post-retirement contact details.

NAHT is currently reviewing, renewing and refreshing its services to support NAHT life member.

The Life Members' Sector Council (LMSC)

Whether leaving a labour of love or embracing a life of leisure, there can be no doubt that retirement from school leadership marks a huge change in lifestyle. There will be adjustments to make, new challenges to take and a range of new opportunities. At a time like this, it is important that our experienced members do not lose all the support they received in their working life. Our life members’ committee is here to ensure members are supported in retirement.

This committee feeds its extensive wealth of experience and know-how to support the work of NAHT. It also gives our life members the chance to make important contributions to our campaigns for working members.  

The committee, which meets four times a year, is made up of one elected representative from each of our regions, with the addition of one place each for Northern Ireland and Wales. And these elected committee members, normally, serve a three-year term.

Areas of focus for the committee include the following: 

  • Current legislation issues eg pension provision
  • Action against discrimination, including age discrimination.
LMSC chair

John Killeen: john.killeen@nahtofficials.org.uk

Committee servicing officer

Andy Walls has the responsibility for working closely with the LMSC as servicing officer. He can be contacted via email andy.walls@naht.org.uk or on 01444 472457.

For further details and contact information about all current LMSC members please check out ‘Who’s who’ and the ‘List of LMSC members'.
 

See also

Join now - Life Membership 
Life membership FAQs
Life members' resources
Update Your Details
Tax relief
Pensions advice
Newsletters
Who's who