Public Service Pensions: Discount rate methodology consultation

ASCL response to HM Treasury consultation on discount rate methodology for public sector pensions.
ASCL welcomes the opportunity to contribute to this consultation. However, HMT’s consultation paper was published on 24 June 2021 and the deadline for comments is 19 August 2021. This period of eight weeks is barely more than the six week minimum. 

This is very short for such a significant issue especially when the consultation runs over the school holiday period. There has been little discussion of the SCAPE discount rate methodology over the past decade. Indications have been given that the announcement of any decision on the SCAPE methodology might not be made until December and that any subsequent announcement of a change in the discount rate might not happen until May 2022 at the earliest.

ASCL believes it essential to ensure an appropriate balance in identifying the costs of the public sector schemes available in schools and colleges, whilst ensuring the approach enables the schemes to support the primary objective of incentivising a high-quality school and college workforce that can effectively deliver society’s needs and expectations. 

ASCL believes that the objectives adopted within the consultation are broadly appropriate for the discount rate methodology, especially the essential focus on stability. 

To that end, ASCL strongly supports an approach based on the Social Time Preference Rate (STPR) as the only one that can achieve the key objectives set out in the consultation.

Full response to consultation