The Government Actuary’s Department (GAD) has updated important
actuarial factors for 25 public service pension schemes.
The schemes covered include those for firefighters, police
officers, teachers, NHS staff, local government employees and
civil servants.
Actuarial factors
Actuarial factors are used to calculate and adjust the benefits
of scheme members under different scenarios.
Examples include calculating the value of benefits when a member
divorces, or the value of what a member receives when they
transfer-in existing pensions from previous employers.
Basis updated and new factors delivered
On 29 March 2023 the government informed public service pension
schemes that they would be changing the basis used to calculate
Cash Equivalent Transfer Values (CETVs) and other related
calculations. As a result, pension schemes were required to
suspend some calculations until GAD provided updated actuarial
factors.
On 27 April 2023 the government confirmed
the new basis to be used for CETVs and related
calculations giving GAD the information we needed to proceed
calculating and issuing updated factors.
By Friday 26 May 2023, updated factors for suspended CETV and
divorce cases had been issued to most public service pension
schemes.
By 30 June 2023 factors for suspended transfer-in cases had also
been issued.
Calculations to be restarted
Since receiving the updated factors, pension scheme
administrators have been working hard to implement them and
restart the calculations that were suspended.
This is an important step and includes updating and testing
administration systems with the new factors to make sure that
benefit calculations are correct.
Actuary Daniel Sirl is GAD’s lead on the factor updates. He said:
“Producing these factors quickly has been important for my team
as we want to limit the time members spend waiting for
calculations to be processed. I’d like to thank my team, the
scheme managers, and the administrators for their hard work.”
