Consultation on Cost Sharing
On the 24 May 2019 the Public Sector Pensions Authority (“the PSPA”) commenced its consultation on the principles of Cost Sharing that will be applied across all public sector pension schemes managed by the PSPA. 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 consultation is internal to the IOM Government and the PSPA is seeking the views of all scheme members and associated bodies. A list of the consultees can be found on the consultation document which can be accessed at the link below.
The purpose of the 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.
Overview of Cost Sharing
The PSPA manages and administers the unfunded public sector pension schemes (the 'pension schemes') in the Isle of Man, including the Unified, Police, Teachers and Judicial pension schemes. As part of the ongoing programme of ensuring that the pension schemes remain sustainable into the future, the PSPA is establishing a cost sharing mechanism for all schemes. This is a way of assessing on a regular basis how the costs of a scheme have changed over time. If costs have increased or decreased, the cost sharing mechanism will then allow those cost increases or decreases to be shared between scheme members and the Government.
The future sustainability of public sector pensions is improved by putting in place a long term plan to identify and then manage future cost changes to the pension schemes. Therefore any cost changes will be identified and action taken at regular intervals to address them in a way that has not previously been in place. In the future, both pension scheme members and Government will share the responsibility of ensuring the ongoing sustainability of schemes.
The PSPA is seeking views on:
- Three possible options for introducing cost sharing across all pension schemes
- The length of the Recovery Period that should be applied to 'making good' any deficit or surplus on the cost of benefits earned to date based upon actual experience between cost sharing valuations
More detailed information on Cost Sharing and how consultees can feedback their views can be found on the Isle of Man Government’s Consultation Hub.
The consultation period ends at 5pm on Friday 24 May 2019.