At the spending review 2010 the Government proposed increases to member contribution rates that would lead to savings of £2.8 billion a year by 2014-15, to be phased in from April 2012. The increases were to be progressive, affording protection to those on lower salaries and reducing the potential for members opting out of the scheme.
My Department consulted on a system of tiered contribution rates that would secure the savings and offer protection to those with lower incomes. The consultation opened on 28 July 2011 and closed on 20 October 2011. Over 1,700 responses were received to the consultation.
These regulations bring the tiered contribution rates into force. They will apply for service from 1 April 2012 and continue throughout the financial year. The Government remain committed to meeting their spending review commitments in 2013-14 and 2014-15 by increasing member contributions in public service pension schemes. The Department will be discussing potential contribution rate structures for 2013-14 and 2014-15 with unions and employers before starting a formal consultation process.
These regulations also provide a number of minor amendments required to ensure the TPS aligns with the Finance Act 2011 and to clarify administration procedures.