Monday 13 June 2022
Changes made to the Public Sector Pension Schemes in 2015 mean that the States are now in a position to reduce the amount it contributes to those pensions each year by around £9m.
The Policy & Resources Committee is publishing the latest Actuarial Valuation, prepared by BWCI, which will be presented to the States with a recommendation to reduce the employer contribution rate for what is known as the Combined Pool (which covers most public sector employees, including nurses, teachers, police officers and civil servants), from 14.1% to 10.3% from 1 August 2022.
The changes to the Public Sector Pension Schemes agreed by the States in 2015 saw the previous final salary pension scheme replaced with defined benefits on a career average re-valued earnings (CARE) basis which made the Schemes more sustainable and reduced the risk to the employer.
The Actuarial Valuation also shows the Fund that provides public sector pensions is in good shape and the deficit that existed at the time of the previous valuation has been eliminated. The Fund currently has a small surplus as a result of high investment returns and lower salary and pension increases (due to low inflation levels) in recent years. This is welcome as this surplus can help to mitigate against any more difficult periods in the future and reduce the risk of having to increase contribution rates.