The Public Service Pensions Act provides the legal framework for regular actuarial valuations of the public service pension schemes, which inform the future contribution rates to be paid into the schemes by employers. The directions, made under this act, implement this policy.
The act also provides for the establishment of an employer cost cap mechanism to ensure that the costs of the pension schemes remain sustainable in future. On 30 January, the Chief Secretary to the Treasury announced that the employer cost cap mechanism will be paused in light of the potentially significant but uncertain impact of a Court of Appeal judgment concerning elements of the public service pension schemes. The Treasury is publishing amending directions which put this change into effect. The Treasury has a statutory duty to consult the Government Actuary before making the directions. The Treasury completed this statutory consultation during February 2019.