The Government is consulting on a proposed a cap of
£95,000 on exit payments for public sector employees.
It is proposed that payments caught by the cap will include
redundancy payments, payments in lieu of notice and pension
enhancements (including the cost to the employer of unreduced early
retirement pensions). The £95,000 figure is an aggregate (so
an individual couldn't have £95,000 redundancy plus an
unreduced early pension). The £95,000 is to include payment
of settlement agreements, but not payments following litigation.
Payments over £95,000 will only be possible with express
ministerial permission.
Further consideration is being given by the Government to
ex-public sector employees subject to TUPE transfer –
although it is hard to see how the cap could be applied
retrospectively to them. This could result in transferred employees
being better off than those who have remained in the public
sector.
