Public Sector Cash Equivalents Suspended Again

07/11/2011

The Home Office have advised that the factors used to calculate Cash Equivalents and pension credits in public sector pension schemes have been withdrawn by the Government Actuary's Department (GAD) and can no longer be used to value benefits due to a change in the discount rate.  Unfortunately, GAD does not intend to issue new factors until the New Year and the Home Office have advised public sector pension schemes to suspend all Cash Equivalent and Pension Sharing activity until then. 

This is the third time in as many years that calculations are suspended in the public sector pension schemes.

Implementation of any Order made now therefore appears likely to be delayed until the new factors are released by GAD, and both the Cash Equivalent calculated and the pension credit granted will be calculated using the new factors which could increase or decrease the Cash Equivalent value from that previously quoted and as a consequnce this may change the benefits payable to the ex-spouse.

We will aim to keep our website updated with news as to the release date of the new factors by the different schemes as soon as we receive any new information in relation to this.


David Lockett