6
Recommendation
Sixth Report - Public Sector Pensions
Accepted in Part
HM Treasury has not yet performed an evaluation of its reforms and we are not convinced it is on track to meet its objectives. As a part of its 2011–2015 reforms, HM Treasury made a commitment that there would be no more reforms for 25 years. We are just six …
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HM Treasury has not yet performed an evaluation of its reforms and we are not convinced it is on track to meet its objectives. As a part of its 2011–2015 reforms, HM Treasury made a commitment that there would be no more reforms for 25 years. We are just six years into that period and already there are substantial issues that need to be resolved. Both the McCloud judgment and HM Treasury’s concerns around the cost control mechanism have highlighted weaknesses in the reforms. COVID-19 and Brexit are likely to impact GDP in the short term, and it is too soon to tell if these events will have a long-term impact on public service pension affordability. HM Treasury has not yet performed an evaluation of its reforms as it is still in the process of implementing them. We are concerned that HM Treasury has still not prioritised an evaluation of its reforms, particularly given the importance of pensions to individual scheme members, their impact on frontline services, and their significant cost to the taxpayer. Recommendation: HM Treasury should perform an interim evaluation of its 2011–2015 reforms to ensure it is on track to meet each of its objectives, taking account of whether pensions are working for employers, employees and other taxpayers. It should write to the Committee with an update of this evaluation by the end of the year. 8 Public Sector Pensions 1 Public service pension reform
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Government response AI summary
The government accepted the recommendation to provide an interim evaluation by the end of 2021, committing to write to the Committee with an assessment of its objectives. However, it noted this assessment would be necessarily limited as the 2011-2015 reforms are still in the process …
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HM Treasury
13
Recommendation
Sixth Report - Public Sector Pensions
Accepted in Part
HM Treasury told us it has not yet performed an evaluation of its reforms. In its 2011 report on public service pensions, the Committee noted that increasing the amount that employees have to contribute to pension schemes could result in more people opting out of their pensions and having to …
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HM Treasury told us it has not yet performed an evaluation of its reforms. In its 2011 report on public service pensions, the Committee noted that increasing the amount that employees have to contribute to pension schemes could result in more people opting out of their pensions and having to rely on means-tested benefits, leading to extra costs to the public purse, and that important implications of this kind needed to be evaluated and understood. We asked whether the government has undertaken any such evaluation since the 2011–2015 reforms. HM Treasury told us that it had not done any post-implementation evaluation of those reforms, including evaluation of the impact on individuals and whether they are more or less likely to need to access benefits.28 We also asked whether HM Treasury had undertaken any evaluation linking pensions and trends in economic outcomes across different generations. HM Treasury told us it would consider this as part of any evaluation undertaken in future.29
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Government response AI summary
The government agrees to conduct an assessment of how it is meeting its public service pension objectives by the end of 2021, but notes this assessment will be limited until the 2011-2015 reforms are fully implemented.
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HM Treasury