Source · Select Committees · Public Accounts Committee
Recommendation 21
21
When asked about what information was available on employees that opt out of public service...
Conclusion
When asked about what information was available on employees that opt out of public service pension schemes, HM Treasury told us it did not collect this information.45 HM Treasury told us that individual pension schemes often provided assessments of opt-out rates to public pay review boards, but detailed breakdown were not always available.46 For example, the Teachers’ Pension Schemes only provides an estimate of overall participation. HM Treasury provided us with some data on overall opt-out rates: • NHS Pension Scheme – 10% of employees opted out of their pension, the equivalent of around 180,000 employees. • Teachers’ Pension Scheme – 7% to 8% of employees opted out of their pension, the equivalent of around 53,000 to 61,000 employees. • Civil Service Pension Scheme – less than 1% of employees opted out of their pension, the equivalent of around 5,000 employees.47 40 Qq 85–88 41 HC Committee of Public Accounts, The impact of the 2007–08 changes to public service pensions, Thirty-eighth Report of Session 2010–2012, HC 833, May 2011. 42 Qq 3, 16, 20, 25, 32 43 Q 47 44 Q 83 45 Q 30 46 Qq 42–46 47 Q 43 14 Public Sector Pensions
Government Response
Acknowledged
HM Government
Acknowledged
The government agrees with the Committee’s recommendation. Target implementation date: March 2022 Participation in the main public service pension schemes are very high. For example, less than 1% of the active Civil Service population has currently opted out of the Civil Service Pension Scheme. Data on participation rates in public service pension schemes are collected and held at scheme level and shared with HM Treasury. This is appropriate given that departments are responsible for schemes and controlling membership data. If participation rates change significantly, departments are expected to raise this with HM Treasury and implement appropriate mitigation measures. For example, some departments have implemented exit surveys to understand why employees have opted-out of their pension scheme. HM Treasury will commission departments for analysis of latest participation data and will work with departments to standardise data collection, including whether data can be broken down by member characteristics. HM Treasury will also ask departments to provide an update on the measures being taken to improve participation among specific groups, which will be used to inform ongoing work by HM Treasury and departments to promote the value of public service pensions among employees. Departments should also continue to provide HM Treasury with participation data on a regular basis for monitoring purposes. Public service pension schemes provide members with generous benefits in retirement. As participation rates in these schemes remain high, HM Treasury does not believe that participation levels will have a significant impact on wider public expenditure. However, HM Treasury will keep this under review.