In this section:
Cost management update
One of the Scheme Advisory Board’s statutory duties 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.
On 6 September 2018 the written ministerial statement from the Chief Secretary to the Treasury announced that the floor of the cost cap mechanism had been breached. The SAB mechanism also identified that the floor had been breached. As a consequence, the benefit package for scheme members will improve.
Changes to the scheme
The SAB has proposed changes to the design of the scheme in accordance with the 'cost management update'. Of particular note are the proposed changes to member contributions with the introduction of two new lower contribution rates and the expansion of the pensionable pay ranges for the higher bands.
|Band||Pensionable pay from||Pensionable pay to||Contribution rate|
The SAB advise that employers should begin preparations for the changes now. This will help ensure that when the regulatory changes are made, payrolls are ready to deduct the correct amount of contributions and avoid member overpayments.