Public sector exit payment cap proposed - unintended consequences?
12 Aug 2015 - Estimated reading time: 7 MINUTES
As we advised a few days ago, HMT has published proposals for the introduction of a £95,000 limit on the total value of payments made in connection with the termination of a public sector worker’s employment. The proposed cap would include the cost of providing enhanced (unreduced) early retirement benefits.
Please download and read our full briefing note, which you may wish to send on to the employers affected by this. In the Note we highlight how the proposals as drafted have the potential to lead to a number of unintended consequences:
- The cap will hit many who are not high earners.
- This may result in sub-optimal Council reorganisations.
- LGPS Regulations will need to be changed, but how?
- What is the early retirement “cost” for this purpose?
- Things get potentially messy when considering contractors.
Affected LGPS employers (mainly Councils, ALMOs, academies, contractors) may wish to consider responding to the consultation within the short (27 August 2015) deadline.