Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she intends to cap public service pension costs under section 12 of the Public Service Pensions Act 2013.

Section 12 of the Public Service Pensions Act 2013 (the Act) requires an employer cost cap to be set in each of the public service pension schemes.

The Act requires that Treasury regulations must provide for the costs of a scheme to remain within specified margins either side of the employer cost cap of the scheme. The Regulations (SI 2014 No. 575) provide the margins are 3% of pay and that steps must be taken to return the cost of a scheme to the employer cost cap if the cost of the scheme would otherwise go beyond these margins.

Treasury Directions made under the Act specify when the employer cost cap is to be assessed (The_Public_Service_Pensions__Valuations_and_Employer_Cost_Cap__Directions_2023_-_Final.pdf ). Valuations of the employer cost cap as at 31 March 2016 and at 31 March 2020 have been undertaken by each of the schemes, for example see page 9 of the Civil Service Pension Scheme Actuarial Valuation as at 31 March 2020 - Valuation Results. Valuations of the employer cost cap as at 31 March 2024 are currently underway and are expected to be published next year.