On 4 October 2021, HMT published its response to the Public Service Pensions: cost control mechanism consultation. The Government’s response confirms it will proceed with all three proposed reforms:
• move to a reformed scheme only design so that the mechanism only considers past and future service in the reformed schemes. The costs relating to legacy schemes are excluded.
• the cost corridor will be widened from two to three per cent of pensionable pay.
• introduce an economic check, so that a breach of the mechanism will only be implemented if it still had occurred had the long-term economic assumptions been considered.
The Government is aiming to implement all three proposals in time for the 2020 valuations.