The Treasury has released its response to the consultation on the 'SCAPE discount rate methodology', which is used for the valuations of the public service pension schemes that are currently underway, including for the Teachers' Pension Scheme (TPS). The SCAPE discount rate is a key determinant of pension scheme contributions as it converts future pension promises into 'present-day' terms.
Following the consultation, the government has decided to retain the current methodology.
The SCAPE discount rate methodology is used alongside other such as earnings changes, changes to life expectancy and demographic assumptions, in pension valuations every four years. These set the new employee and employer contribution rates for public sector pensions.
The 2020 pension valuations are underway, to determine new employer contribution rates which the government aims to implement from April 2024.
