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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 would have occurred had the long-term economic assumptions been considered.

The Government is aiming to implement all three proposals in time for the 2020 valuations.

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