Source · Select Committees · Public Accounts Committee
Recommendation 22
22
Individual schemes hold information on participation rates for some groups, for example participation in the...
Conclusion
Individual schemes hold information on participation rates for some groups, for example participation in the NHS Pension Scheme is lower among younger employees.48 However, HM Treasury told us that there are lots of imperfections in the quality of participation data, and that it does not as standard collect detailed opt-out rates..49 As a result, HM Treasury could not give us a clear answer as to whether overall younger employees and those on lower pay are more likely to opt out of their pensions than other groups, or whether participation rates are increasing or decreasing over time.50 HM Treasury told us that while anecdotally it was aware of this issue, the data was limited – it was not clear on why people choose to opt out of their pensions or which groups are more likely to.51 HM Treasury also told us it does not collect any data on what happens to people once they opt out of their pension scheme.52 There are understandable reasons why people may choose to opt out of pension schemes (for example, short-term spending priorities) but inadequate pensions are likely to cause issues in the future and push costs into other policy areas, for example if people are more likely to be reliant on the benefits system.53 Inequalities and differences between groups
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.