Through a written ministerial statement from the Chief Secretary to the Treasury, the Government has announced that the Superannuation Contributions Adjusted for Past Experience (SCAPE) discount rate has been reduced to the consumer price index (CPI) plus 1.7 per cent. This is a reduction from the previous rate of CPI plus 2.4 per cent. The SCAPE discount rate is used to set the employer contribution rates in the unfunded public service pension schemes and determine the actuarial factors across all public sector schemes. The change takes effect from 30 March 2023 and the Government Actuary’s Department has already begun a review of actuarial factors applying in the LGPS. While that progresses, some non-club transfers and interfund calculations, and all CEVs for divorce purposes will need to be suspended until the new factors are issued. Detailed guidance on this has been circulated to administrators by LGPC.

The Government has also now published its response to the June 2021 consultation on the methodology used to set the SCAPE discount rate. It confirmed that the SCAPE rate will continue to be based on the expected long-term gross domestic product (GDP) growth figures. The Government also expressed an aim to review the level of the discount rate once per scheme valuation cycle (four years) rather than every five years.