This article is just an example of the content available to mallowstreet members.
On average over 150 pieces of new content are published from across the industry per month on mallowstreet. Members get access to the latest developments, industry views and a range of in-depth research.
All the content on mallowstreet is accredited for CPD by the PMI and is available to trustees for free.
The Government Actuary's Department has published its final report with recommendations on how the cost control mechanism for public service schemes could be changed. The cost control mechanism influences the level of pension benefits public sector workers receive, by applying a cost cap and floor. For example, when costs reduce past a certain level, benefits increase and vice versa.
GAD is recommending changing the mechanism so that benefits cannot increase and create extra costs for employers at times of economic stress.
"I have noted that the mechanism has worked as it was intended to but that the practical consequences might be considered to be counter-intuitive," said government actuary Martin Clarke in his report.
"They would lead to member benefit improvements and increased employers’ costs during a period of worsening economic outlook," he observed, and "these improvements would have been applied for the benefit of a different cohort of scheme members to those whose past experience significantly contributed to the circumstances that required this rectification".
The preliminary results of the 2016 scheme valuations - calculated before the government paused the mechanism for the McCloud judgment - showed costs were thought to have decreased by more than 2% of pensionable pay, meaning member benefits would have been increased.
