Cost Management
One of the Board’s statutory duties, under the regulations, is to introduce and maintain a process to manage costs in the scheme alongside the process introduced by HM Treasury for all public service schemes. These two processes, the public service pension schemes employer cost cap and SAB cost management are delivered in line with the document “Public service pensions: actuarial valuations and the employer cost cap mechanism” (pdf 347kb).
A useful background to the two processes and progress to date can be found in the document House of Commons Briefing Paper February 2019 (PDF 866kb)
This section of the site will contain information on, as well as the outcome of, those processes.
The Government Actuary’s Department has now completed the scheme cost assessment required under Regulation 116 of the LGPS Regulations 2013. The SAB cost management process final report was completed using methodology and 10 assumptions determined by the Board, following discussion at the Cost Management, Benefit Design and Administration (CMBDA) Committee. Scheme costs were assessed as being 20.5 percent of pensionable pay, 1 percent above the 19.5 percent target cost. This is within the range where the Board may make recommendations to amend benefits to bring scheme costs back towards the target cost but is not obliged to. Following a discussion, the Board agreed not to recommend any changes in its letter to the Secretary of State about the outcome of the scheme cost assessment.
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