Civil service pensions valuation

PCS advised branches in a briefing in December that the result of the valuation of the Civil Service Pension Scheme indicated that there had been a downward breach of the cost cap of 5.4%. This means that members’ contribution have been in excess of the amount needed to fund the pension scheme. There are various reasons for that, mainly the cap on pay increases since 2010.

Under the rules of the pension scheme if the valuation had shown an upward breach of the cost cap the government would have been quick to seek either increases in member contributions or cuts to pension benefits to bring the scheme within the cost cap. Given that the reverse is the case, the hope would be that the government would be equally quick to discuss with the unions either decreasing member contributions or increasing pension benefits. Unfortunately that is not the case.

On 30 January the chief secretary to the Treasury – Liz Truss – issued a written parliamentary statement announcing that the government are pausing the valuation of the Civil Service Pension Scheme. She states that the government’s decision to appeal a decision of the Court of Appeal in a case brought by the Fire Brigades Union necessitates a pause.

The Fire Brigades Union (FBU) successfully argued that the protection imposed on younger members was unlawful on age discrimination grounds. Their argument is that if this judgement stands, there will be a precedent that applies to all the unfunded schemes and, as such, the current valuations are based on potentially incorrect figures.

Unions have insisted the Civil Service Pensions Valuation Government prevarication has delayed improvements to member benefits, the Treasury should not suspend the valuations process and should proceed as planned, including addressing the rectification measures proposed by the relevant Scheme Advisory Boards.

Mark Serwotka, PCS general secretary said: “It is outrageous that the government is delaying and possibly denying pension improvements, when our members have been paying too much for too long, and for pensions which have been dwindling in value. Our members should not have to bear the brunt of Government decisions to flout equality laws.”

Hector Wesley
Group vice president

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