Superannuation Contributions Adjusted for Past Experience (SCAPE) rate review

The Government Actuary Department (GAD) has announced a change to the SCAPE discount rate this week.

This rate plays an important role in the Local Government Pension Scheme (LGPS), because it is a discount rate (factor) used to calculate the value of pension benefits.

What’s happening?

When the SCAPE rate changes, all related scheme factors must be reviewed and updated. This ensures that pension calculations remain accurate and reflect current economic assumptions.

As a result, some calculations will need to be temporarily paused immediately following the announcement. These include:

• Cash Equivalent Transfer Values (CETVs)
• Pensioner cash equivalents
• Non-club transfers into the scheme

Why is this important?

The SCAPE rate affects how pension benefits are valued. A change may alter the outcomes of key calculations, particularly:

• Early retirement quotations, which are expected to become less favourable for members
• Pension sharing values used in divorce cases

To ensure members receive accurate and fair figures, calculations must be suspended until updated factors are available.

What are we doing about it?

Once the announcement is confirmed, we will:

• Suspend affected calculations to prevent the use of outdated factors
• Inform members who request retirement quotations about the upcoming changes
• Advise relevant parties, such as courts involved in divorce cases, where pension valuations may be impacted

The Government Actuary’s Department (GAD) aims to provide:

• Updated factors for CETVs and pensioner cash equivalents within two weeks
• Early and late retirement factors within six weeks
• Remaining factors issued in stages over approximately six months

What happens next?

We will:

• Monitor HM Treasury’s announcement
• Provide further updates as soon as more detail is available
• Work with MHCLG to develop transitional arrangements, ensuring a smooth move to the new factors

We will keep members and stakeholders informed throughout the process and minimise disruption wherever possible.