Second consultation on public sector exit payments reform

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04 / 5 / 2016 4.23pm

Read our response to the government's consultation on reforms to public sector exit payments.  We would like to thank all those employers who took time to respond to our survey.

The draft proposals aim to ensure greater consistency, fairness and sustainability in the provision of public sector compensation.

The proposed changes include options to take action on some, or all, of the following elements of redundancy compensation provisions:

  • Setting the maximum tariff for calculating exit payments at three weeks’ pay, per year of service. 
  • Capping the maximum number of months’ salary that can be used when calculating redundancy payments to 15 months.
  • Setting a maximum salary for the calculation of exit payments. This limit could align with the NHS Staff Council’s redundancy scheme’s salary cap of £80,000.
  • Enabling the amount of lump sum compensation an individual is entitled to receive to be tapered as they get close to the normal pension. 
  • Reducing the cost of employer-funded pension top up payments.
These proposals are in addition to plans already announced to introduce a maximum £95,000 cap on any public sector exit payment, and on new rules requiring recovery of exit payments for high paid staff who return to public sector employment within twelve months. 

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