The Department for Education has launched two consultations seeking views on the methodology used to determine the Discount Rate and proposed changes to the Cost Control mechanism.

The SCAPE Discount Rate is a discount rate used in the valuation of unfunded public service pension schemes, such as the Teachers’ Pension Scheme to set employer contribution rates. Set by HM Treasury, it expresses future pension promises that are being built up in present-day terms. The current methodology has been in place since 2011. This consultation seeks views on the objectives for the SCAPE Discount Rate and the most appropriate methodology for setting the SCAPE discount rate going forward.

The second consultation sets out the government’s proposed changes to the Cost Control mechanism, following a review by the Government Actuary. The government believes changes will provide a fairer balance of risks between the Exchequer and members, create a more stable mechanism and take account of the wider economic picture.

For more detailed information and how to respond, please view the Consultation on the Discount Rate methodology (This link opens in a new window) and the Consultation on the Cost Control mechanism (This link opens in a new window).

Your responses are required by Thursday 19 August. Please respond directly to the Department for Education and don’t send a response to us at Teachers’ Pensions.

Following the consultations, the government will consider the feedback and then publish its response later this year.

We’ll be updating our FAQs and factsheet shortly, please keep checking our website for updates.