On 7 October the government published the final Directions for the cost control mechanism (This link opens in a new window), that will allow completion of 2016 valuations.

The publication confirms that the McCloud remedy will be captured as a ‘member cost’ in the completion of the 2016 valuations and any ceiling breaches found when schemes complete the 2016 valuations will be waived. This means that no member will face a reduction in their benefits because of the 2016 valuation. Any floor breaches will be honoured, and benefits increased.

The impact for the Teachers’ Pension Scheme is likely to be that member benefits will be unaltered which is contrary to the position pre the McCloud judgment, when it looked like the mechanism would lead to an improvement in benefits. We will keep members informed of the final outcome via our website.