Public sector employees are being consulted on proposed changes to pension schemes by the Public Sector Pensions Authority.
As part of the ongoing programme to ensure that pension schemes remain sustainable and affordable, the PSPA has established a cost sharing mechanism for a number of different schemes.
A six week consultation has been launched for public service employees who currently pay into the government’s unified, teachers, judicial, and police pension schemes.
Pension Changes
The cost sharing valuation is required under the Public Sector (Cost Sharing) Scheme 2020 (Cost Sharing Scheme).
Cost sharing is a way of assessing how the cost of pensions have changed over a six year period, with any increase or decrease in costs shared between the members and the government.
Proposed changes to legislation will need to be approved by Tynwald and include:
- Increasing the accrual rate – this means future pensions will build up more quickly
In addition, for members of the Teachers Pension Scheme 2025:
- A one per cent reduction in their contribution rate
- Retirees will be able to exchange part of their pension for a lump sum at a rate that is at more in line with other public sector schemes
If the proposed amendments are implemented, increases to pensions will be applied and backdated to April 1, 2024.
Adjustments to contributions and pension exchanges rates will be made from April 1, 2026.
Read and download further details on cost sharing and the consultation.
7 Comments