Source · Select Committees · Public Accounts Committee
Recommendation 6
6
HM Treasury has not yet performed an evaluation of its reforms and we are not...
Conclusion
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
Government Response
Acknowledged
HM Government
Acknowledged
6.1 The government agrees with the Committee’s recommendation. Target implementation date: End 2021 6.2 HM Treasury will write to the Committee with an assessment of how it is meeting its objectives for public service pensions. 6.3 Given the long-term nature of pensions, these are still relatively recent reforms; a significant number of public sector employees continue to accrue benefits under legacy pension schemes and a large proportion of pension payments in the next decade will be for pensions already in payment. 6.4 The government notes that it is still in the course of implementing the 2011-2015 reforms by remedying the discrimination identified by the McCloud and Sargeant judgments and transferring remaining members into reformed schemes. This will be implemented through the Public Service Pensions and Judicial Offices Bill 2021. 6.5 For these reasons, any assessment at this time will necessarily be limited until the reforms have been fully implemented and embedded in the public service pensions system.