Change to strain factors used in early retirement calculations- August 2023
Following the actuarial valuation in 2022, our actuary Mercers have undertaken a review of early retirement strain cost factors. These have now been confirmed.
These changes have been put in place following the Chief Secretary to the Treasury's written ministerial statement on 30 March 2023 that announced that the Superannuation Contributions Adjusted for Past Experience (SCAPE) discount rate had been reduced to a real rate of 1.7% per annum above CPI, from the previous real rate of 2.4% per annum.
Although this change does not impact contribution rates for the LGPS, set as part of a triennial actuarial valuation exercise, there will be an impact on the LGPS given the SCAPE rate is used by the Government’s Actuary Department to set actuarial factors. This will impact early retirement strain costs.