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NAHT submits response to the Treasury's consultation on the proposals to the cost cap mechanism

We have submitted our response to the Treasury's 'Public Service Pensions: cost control mechanism consultation.'


The cost control mechanism was introduced following the recommendations of the Independent Public Service Pensions Commission (IPSPC) in 2011.

For each scheme, the mechanism assesses certain aspects of the costs of providing that scheme; if, when the mechanism is tested, those costs have decreased/increased by more than a specified percentage of pensionable pay compared to their original level, then member benefits in the relevant scheme are increased or reduced to bring the cost of that scheme back to target.


HM Treasury is currently consulting on a number of changes to the mechanism following a 'breach' in the 2016 valuations. Proposals include changes to the type of pension schemes included in the calculations, changes to the 'corridor trigger' and the introduction of an 'economic check.'

NAHT's response on behalf of England, Wales and Northern Ireland schemes

NAHT strongly opposes this review, and we are of the view that it could be considered as an alteration to the 25-year pension agreement settlement. We believe that the case has not been made for the need to review the mechanism and that the arguments put forward by the government for doing so, are disingenuous. 

You can read our full response below. 

First published 16 August 2021