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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 Chief Secretary to the Treasury announced in a written statement that ‘the government believes that the difference in treatment will need to be remedied across all those schemes. This includes schemes for the NHS, civil service, local government, teachers, police, armed forces, judiciary and fire and rescue workers. Continuing to resist the full implications of the judgment in Court would only add to the uncertainty experienced by members’

The full statement can be found on the parliament web site


The SAB has published an advice note covering the implications of McCloud/Cost Cap in relation to the 2019 fund valuations:

Advice from the SAB on McCloud May 2019 (pdf 3 pages 188kb)


Minister response letter regarding the pause of the SAB cost management process:

Letter from Minister regarding pause of SAB cost management process (pdf 42kb)


On 14th February the SAB published a Q&A on the McCloud case and it's potential impact on cost cap for administering authorities. Please see the link below:

The McCloud case Q&A for administering authorities page (opens in new window)

The above page will be updated as and when new information becomes available


On 7th February the SAB received confirmation that the cost cap pause and the uncertainty caused by the McCloud case announced in last week’s Written Ministerial Statement (see 30th January 2019 WMS on cost cap below) applies equally to the LGPS as to the unfunded public service pension schemes. Given that confirmation the SAB considers it has no option but to pause its own cost management process pending the outcome of McCloud.

As a result there are currently no changes to benefits planned in respect of the cost cap. This situation will be reviewed once McCloud is resolved which is not expected for some months.

Letter confirming application of WMS to LGPS (pdf 121kb)

Letter from SAB pausing the cost management process (PDF 78kb)

Full copy of Board communication pausing cost cap including the 2019-20 employee contribution table (PDF 154kb)


On 30th January the Government announced a pause in the cost cap process due to uncertainty caused by a court ruling on elements of the 2014/15 scheme reforms. The Written Ministerial Statement setting out the reason for the pause is listed below, together with a summary of and the the full Court of Appeal ruling in the case of The Lord Chancellor and Secretary of State for Justice and another v McCloud and Mostyn and others [2018] and Sargeant v London Fire and Emergency Planning Authority and others [2018]. Also listed is a letter from MHCLG confirming that the WMS applies equally to the LGPS as to the unfunded public service schemes.

Written Ministerial Statement (pdf 79kb)

McCloud Summary (pdf 137kb)

McCloud full judgement (pdf 699kb)


The Shadow Scheme Advisory Board (SSAB) has today published two briefing notes in respect of the cost control processes which will be used to assess the costs of the reformed LGPS in England & Wales.

A briefing note for members and employers has been published in order to:

 

The SSAB ask that administering authorities make this briefing note accessible to fund employers and members so that they can familiarise themselves with the processes and the possible impacts that the cost control mechanisms could have on the Scheme benefits structure and/ or employee contribution rates.

A second briefing note has been prepared for administering authorities in order to outline the role that LGPS pension funds will play in the cost control process and in particular focusses on the practicalities of delivering accurate and timely cost control figures.

In addition, the SSAB has published a process map (located here) and a timetable (located here) setting out its plans for the interactions between the HM Treasury Employer Cost Cap (ECC) process and the Scheme Advisory Board Future Service Cost (FSC) process.

Any questions or queries arising from the publication of these documents should be referred to the Board secretariat in the first instance.