Cost Sharing for Public Sector Pension Schemes
Feedback updated 24 Jul 2019
We asked
Given cost sharing will be introduced across all pension schemes managed by the PSPA, the authority sought feedback on three possible options as to how cost sharing might work in practice, namely:
- A “2% of pay buffer option” - which involves having a “buffer” or “band” of 2% of pay for cost sharing purposes.
- The “75% and 25% split of costs” option – currently within this existing Rules of GUS, there is a provision that cost variations would be shared between members and Government on a 75/25 basis.
- The “75% and 25% split of costs including a small buffer” option - based on Option 2 but to guard against very small cost changes being shared a small buffer of 0.5% of pay would be introduced.
You said
In all there were 76 responses in relation to the proposed options, with 8 being via e-mail and 67 via the consultation hub and one via letter. As well as comment upon the options there was a significant level of negative feedback in relation to the use of the Consultation Hub.
In relation to the consultation of the responses received via the Consultation Hub there were 8 which stated that the individual had only chosen an option so that they had the opportunity to state that they did not agree with any of the options.
With regard to the options, the breakdown of responses was as follows:
• Option 1: “2% of pay buffer” option - 31.1%
• Option 2: the “75% and 25% split - 6.6%
• Option 3: “75/25 with small buffer” - 62.3%.
In relation to the responses regarding option 1, one was from the Isle of Man Trade’s Council on behalf of their affiliated trade union members and two were from Teaching Unions, also on behalf of their members.
We did
The PSPA is grateful for all those who responded to the consultation.
In developing the proposals the PSPA has been in discussions, for over two years, with a Trade Union Technical Advisory Group (TAG) which supported the proposals based upon Option 1.
Given the percentage of responses received from individuals support a different approach to that which is supported by TAG, the PSPA needs to carefully consider the responses received including those received from Trade Unions and Treasury before it finalises the consultation response document and draft legislation for consideration and further consultation.
Overview
The Public Sector Pensions Authority (PSPA) was established under the Public Sector Pensions Act 2011 and is responsible for the Management and Administration of the majority of Public Sector Pension Schemes in the Island.
The purpose of this consultation is to obtain views in relation to the principles of cost sharing that will be applied across all public sector pension schemes for which the PSPA has responsibility.
Cost sharing will be introduced as planned across all pension schemes managed by the PSPA and therefore the purpose of this consultation document is to seek your feedback on three possible options as to how cost sharing might work in practice. The PSPA is considering three possible designs for cost sharing and would like your views on them before it settles upon one option which would then apply to the Government Unified, Police, Teachers and Judicial scheme members. The PSPA is also consulting upon the length of the Recover Period for past service surpluses or deficits and this is explained later in this document. One or more Amending Schemes will then be produced to include the final cost sharing legislation and the PSPA will undertake a final consultation on these details before cost sharing becomes fully operable.
List of people and organisations consulted:
- Pension scheme members
- Tynwald Members
- Attorney General
- Departments, Statutory Boards and Offices
- Public Services Commission
- Recognised registered Trade Union bodies representing IOM public sector staff
Should you identify any interested parties not listed above we would welcome your feedback as we are keen to capture opinion across the board
What’s included in the Consultation?
The PSPA would appreciate your feedback on:
- Which Option it should introduce for Cost Sharing that will be applicable across the pension schemes: Option 1, Option 2 or Option 3 as described above;
- The length of the Recovery Period for past service deficits or surpluses.
We have put together the below information to outline our proposals including examples of how the changes could impact the schemes.
What happens next
Following closure of the consultation period, we will review the responses received and publish a Consultation Response document. The PSPA will then finalise a draft Cost Sharing Scheme (or Schemes) for a final consultation with pension scheme members and other interested parties and for subsequent consideration by the Council of Ministers and subject to its approval, progression to Tynwald.
Areas
- All Areas
Audiences
- All residents
Interests
- Legislation
- Policies, strategies & plans