A policy paper published on 15 May states that the cost control mechanism (CCM) for new public sector schemes will exclude those legacy schemes closed to new members.

Following a review by the government actuary and a series of consultations, the government will now bear “full risk” of costs related to unfunded legacy schemes, which includes civil servants, teachers and NHS staff.

The paper states: “The government believes this is the right approach to take in order to ensure the CCM is fairer to younger members who did not previously have access, or had access for a shorter time, to the legacy schemes,” the paper said.

A legal challenge of the 2015 reforms resulted in a ruling that said they discriminate against younger scheme members in what is known as the McCloud judgment.

In response, the government introduced reformed schemes that would deal with the discrimination while offering members the choice of terms for their benefits accrued between 2015 and 2022 to be paid under.

Chief Secretary to the Treasury, John Glen, stated in a written ministerial statement published with the paper: “This will lead to a more stable CCM and ensure consistency between the set of benefits being assessed and the set of benefits potentially being adjusted, thereby ensuring fairness for both taxpayers and scheme members.”

The cost of the reforms was estimated to be at least £17 billion in 2021. Unions have called for member contributions to be reduced as their members overpaid following the 2016 valuation which they claim overstated the cost of future public service pensions.

Mark Serwotka, the general secretary of civil service union PCS, said: “The 2016 valuations showed that future public service pensions cost have been exaggerated.

“The real determinants are pay levels and life expectancy, both of which point to reducing and not increasing future liabilities, which is why we believe our members have been overpaying for years and should have their money back.”

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