£95k exit payment cap to come into force before 2021

By Dan Peters | 02 September 2020

The Government plans to bring its proposed £95,000 cap on public servants’ exit payments into force before the end of this calendar year, The MJ understands.

Its move comes despite warnings that capping exit payments will undermine the incentive for large numbers of employees to leave and result in long-serving middle earners receiving reduced pensions on redundancy.

A report to the local government pension scheme advisory board read: ‘As the cap includes pension strain costs the restriction will seriously limit councils’ ability to restructure management levels by consent, thereby impacting on the business case for such restructures.

‘The process by which councils may secure an exemption from applying the cap is cumbersome, contradictory and significantly restricts the ability of councils to manage their own finances.

‘The administration of the cap will be complex for pay and pensions teams and confusing for employees and likely to result in increased tribunal cases and greater difficulty in reaching agreements on redundancy schemes.’

comments powered by Disqus
Whitehall HR Finance Pensions Pay Management

Coronavirus Update


In light of the ongoing coronavirus crisis, some of you may not be able to receive your copy of TheMJ magazine. If you’d like to change your delivery address, please contact our subscriptions department at customer@hgluk.com
Read The MJ for free

Keep up to date by subscribing to our daily newsletter

theMJ products