The Public Service Pension Reduction (PSPR) came into effect on 1 January 2011 via the Financial Emergency Measures in the Public Interest (FEMPI) Act 2010 and was significantly extended via the FEMPI Act 2013.PSPR was applied in a progressive manner, operating by way of percentage reduction to pensions above specified exemption thresholds, with larger reductions imposed on relatively higher value pensions. A three-stage partial reversal of PSPR, occurring in the years 2016, 2017 and 2018, was provided for in the Financial Emergency Measures in the Public Interest Act 2015. The Public Service Pay and Pensions Act 2017 provided for further significant lessening of PSPR in the years 2019 and 2020. As of 1 January 2020, an estimated 97% plus of public service pensions were free from PSPR, leaving a residual group of approximately 4,000 of the highest value pensions still impacted from that date.
PSPR was removed from those pensions still impacted by it from 1 July 2021, in accordance with the Public Service Pay and Pensions Act 2017 (Section 27(3)) Order 2020.
It is a matter for each pension paying authority to ensure that the PSPR adjustments and removal provided for under the relevant legislation has been correctly administered and applied to affected pensions.
