Pensions Line - Exit Payments Update

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  February 2017

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Public Sector Exit Payments Update

 For those of you who attended our employer meetings last week, you will be aware that some proposals have been put forward on how the Exit Payment Cap could affect your employees.

We can now confirm that a statutory instrument has been made in Parliament which brought s41 of the Enterprise Act 2016 into force on 1st February 2017. Section 41 allows the Secretary of State to issue regulations capping public sector exit payments (which include pay in lieu or notice, redundancy and ex gratia payments) to £95,000.

Don’t panic! As anticipated, the commencement order will not bring into force the specific amendments to the LGPS regulations contained in the Enterprise Act 2016.  This is because as currently drafted, the amendments contain a number of areas requiring revision. 

The commencement order itself is only bringing into being the regulation-making powers, but not the legislation actually required to operate the cap.  So, for now the exit cap lies dormant.  This issue hasn’t gone away though and we expect more consultation and plenty more debate before it’s finally settled.

We will obviously keep you posted as things develop.


Employer Liaison Team


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