Tuesday, February 09, 2016
When will the public sector exit payment cap come into force?
A reader recently asked the question above.
The draft Regulations to implement the public sector exit payment cap don’t (yet) help us to know when the cap will come into force (they currently say it will come into force on XXX...)
They do reveal that, for those local government workers whose total cost of departure (including “strain” on the pension fund for the cost of an unreduced pension) where an exit payment restriction would otherwise prevent immediate retirement on an unreduced pension on redundancy or efficiency, amendments to the LGPS Regulations will result in the member paying for the removal of this restriction. This could be either by paying the excess amount in full, suffering an ongoing reduction to their pension or a combination of the two.
Hymans Robertson (to whom I am indebted for the information above) speculate that the Government published the draft Regulations before the primrary legislation under which they are intended to be made had received Royal Assent because they want to avoid delay – which suggests that there could be an early implementation of the exit payment cap.
Given that the Enterprise Bill made it from the House of Lords to the Commons with section 35 (which gives the power to make the Regulations) intact, that the Committee stage in the Commons is scheduled to conclude by 25 February, and that the Regulations will require only an affirmative vote of both Houses of Parliament to become law, it might be unwise to bank on any significant delay.
It’s worth remembering not only that this exit payment cap will not only hit “fat cats” but also that the Taxpayers Alliance driven agenda of vilifying high payments in public service is, essentially, an attempt to justify spending cuts.
The truly wealthy, those whose interests drive the current onslaught upon our public services and our trade unions pay themselves to excess out of the (largely untaxed) profits of the corporations they control.