Public service pensions (including the AFPS) are subject to a so called ‘Cost Control Mechanism’ (CCM)
The CCM is in place to
“Ensure a fair balance of risk regarding the cost of providing public service defined benefit pension schemes between the members of those schemes and the taxpayer”Source: HMT consultation document dated June 2021
We reported last week, that the Government had recently conducted a review of the CCM and has since made several recommendations for change – we agree with some but not with others!
And in representing the interests of all members of the Armed Forces Community, the Chief Executive submitted our response to the Government’s Public Consultation to the Treasury on 18 Aug which you can read at the link below
This is a complex area and one you are unlikely to see, hear or read about in the media. But it is important and as far as we’re concerned the longer-term savings already secured by the Treasury following the switch from legacy schemes to reformed schemes in 2015 suggests “protecting the taxpayer from unforeseen costs” is no longer an immediate priority – and have responded accordingly.
You can read HMT’s Public Consultation document here