Sixth Report - Public Sector Pensions

Select Committee
Public Accounts Committee HC 289 11 June 2021
Report Status Government responded
Conclusions & Recommendations 25 items (10 recs)
Source View on Parliament website
Government Response (AI assessment · 25 of 25 classified)
Accepted 10
Accepted in Part 2
Acknowledged 4
Deferred 2
Not Addressed 6
Rejected 1
Government response
Treasury minutes: Government response to the Committee of Public Accounts on the Sixth report from Session 2021-22 · published 2 Sep 2021
Read the government response ↗ Response on the tracker
Clear

Recommendations & Conclusions

10 results
2 Recommendation Accepted
It is becoming clear that public service pension policy is affecting the delivery of frontline...
Recommendation
It is becoming clear that public service pension policy is affecting the delivery of frontline services in some areas, such as education and health. In 2019–20, a substantial increase in employers’ pension contributions—which was not fully funded by HM Treasury—has … Read more
Government Response Summary
The government agreed with the recommendation, stating it already provides advance notice and support, and confirmed it is consulting on the SCAPE discount rate methodology with a new rate to be set for April 2024, proposing to align future reviews with the valuation cycle.
HM Treasury
View Details
3 Recommendation Accepted
HM Treasury has not done enough to ensure people understand the value of their pensions.
Recommendation
HM Treasury has not done enough to ensure people understand the value of their pensions. This Committee previously recommended, in 2011, that HM Treasury should work with employers and pension schemes to ensure that clear and relevant information is provided … Read more
Government Response Summary
The government accepted the recommendation, stating it will commission departments to analyse latest participation data, work to standardise data collection, and request updates on measures to improve participation to inform efforts to promote pension value, with a target date of March 2022.
HM Treasury
View Details
5 Recommendation Accepted
HM Treasury has had to revisit key elements of the reforms, and these issues may...
Recommendation
HM Treasury has had to revisit key elements of the reforms, and these issues may take decades to resolve fully. HM Treasury should have foreseen the age discrimination issue that gave rise to the 2018 McCloud judgment, and putting things … Read more
Government Response Summary
The government accepted the recommendation, outlining current legislative actions for the McCloud judgment via a new Bill and detailing steps to address the cost control mechanism, including waiving 2016 valuation ceiling breaches and consulting on future changes. It also committed to providing an update in six months.
HM Treasury
View Details
8 Conclusion Accepted
HM Treasury has since been developing a remedy for those affected.14 In February 2021, HM...
Conclusion
HM Treasury has since been developing a remedy for those affected.14 In February 2021, HM Treasury announced that it plans to give the 3 million members affected by the McCloud judgment a choice of which scheme they would like their … Read more
Government Response Summary
The government affirmed its commitment to legislate to remedy the McCloud judgment discrimination and noted that the Public Service Pensions and Judicial Offices Bill was introduced in July 2021, reiterating the ongoing actions described by the committee.
HM Treasury
View Details
9 Conclusion Accepted
Separately, HM Treasury has some concerns about the measures it has in place to control...
Conclusion
Separately, HM Treasury has some concerns about the measures it has in place to control rising costs. As a part of its 2011–2015 reforms, government put in place a ‘cost control mechanism’ designed to share costs fairly between employees and … Read more
Government Response Summary
The government detailed actions being taken to address issues with the cost control mechanism, including publishing amending Directions for 2016 valuations, waiving ceiling breaches, delivering floor breaches, and initiating discussions with Scheme Advisory Boards to rectify these.
HM Treasury
View Details
10 Recommendation Accepted
While the cost control mechanism was only used for the first time in 2016, HM...
Recommendation
While the cost control mechanism was only used for the first time in 2016, HM Treasury is concerned that it is not sufficiently protecting the taxpayer and members. The provisional results of the 2016 valuations show that costs had fallen … Read more
Government Response Summary
The government is addressing the cost control mechanism flaws by waiving ceiling breaches from 2016 valuations, delivering floor breaches, and has launched a consultation on changes to be implemented before the 2020 valuations.
HM Treasury
View Details
19 Recommendation Accepted
This Committee previously recommended, in 2011, that HM Treasury should work with employers and pension...
Recommendation
This Committee previously recommended, in 2011, that HM Treasury should work with employers and pension schemes to ensure that clear and relevant information is provided to employees on the value of their pensions, and that this information is regularly updated … Read more
Government Response Summary
The government accepts the recommendation, agreeing to commission departments for participation data analysis, standardise data collection, and request updates on measures to promote the value of public service pensions to employees by March 2022.
HM Treasury
View Details
20 Conclusion Accepted
Furthermore, government’s response to the McCloud judgment has potential to exacerbate the problem.
Conclusion
Furthermore, government’s response to the McCloud judgment has potential to exacerbate the problem. Members affected by the McCloud remedy will be asked to make a complex decision about their pensions, which may include balancing between the level of pension they … Read more
Government Response Summary
The government outlined the 'deferred choice underpin' introduced in the Bill, allowing members to make choices about their benefits at retirement to simplify the complex decision-making related to the McCloud judgment.
HM Treasury
View Details
21 Recommendation Accepted
When asked about what information was available on employees that opt out of public service...
Recommendation
When asked about what information was available on employees that opt out of public service pension schemes, HM Treasury told us it did not collect this information.45 HM Treasury told us that individual pension schemes often provided assessments of opt-out … Read more
Government Response Summary
The government accepted the recommendation, stating it will commission departments for analysis of participation data, work to standardise data collection including by member characteristics, and request updates on measures to improve participation, aiming for implementation by March 2022.
HM Treasury
View Details
22 Recommendation Accepted
Individual schemes hold information on participation rates for some groups, for example participation in the...
Recommendation
Individual schemes hold information on participation rates for some groups, for example participation in the NHS Pension Scheme is lower among younger employees.48 However, HM Treasury told us that there are lots of imperfections in the quality of participation data, … Read more
Government Response Summary
The government accepts the recommendation, committing to commission departments for detailed participation data analysis, standardise data collection by member characteristics, and gather updates on measures to improve participation by March 2022.
HM Treasury
View Details