Changes to the pension scheme for Deemsters will make savings of about 20% on the cost of the current arrangements.

Chris Thomas MHK, vice chairman of the Public Sector Pensions Authority, will seek approval in Tynwald next week to close the Judiciary Pension Scheme 2004 to new entrants, breaking a long-established link with the UK.

Instead, newly-appointed judges will join a new section of the government’s unified scheme created specifically for the judiciary.

The aim is reduce the future costs and make public sector pension arrangements more sustainable.

Ian Murray, chief executive of the PSPA, said the move will represent a future funding saving of around 20% compared with the cost of the current scheme.

The savings will result from the lower rate at which benefits will accrue - 1/50th compared with 1/40th per year of service.

Additionally, both existing and new members will pay a significant increase in contributions when compared with the current contribution rate of 3%. He said: ’Actual cost savings, when compared to the reforms made to the larger public sector schemes, are not of the same order in monetary terms given that only a small number of individuals are permitted to members of this scheme. Membership is limited to only seven posts.

’However, going forward these reforms in funding terms bring the sustainability and management of future cost of the judiciary’s public sector pensions in line with those for other public servants.’

He said the financial management of public sector schemes will be much more tightly controlled in the future via regular actuarial reviews, cost sharing reviews and a process to share future cost changes between employees and employers via either contribution or benefit changes.

’This has not been the position in the past,’ he said.

’In the future, new members of the judiciary will be subject to cost sharing under the unified scheme and the PSPA will shortly be discussing cost sharing arrangements for the remaining seven members of the Judicial Pension Scheme 2004.’

Currently, members of the Judicial Pension Scheme 2004 contribute 3% of pensionable pay.

Increases to the contribution rate will be phased in each year by 1.6% over a period of five years starting from April 2020 until it reaches 11%.

In the new arrangements for new members, no automatic lump sum is available on retirement.

Instead the member does have an option to permanently commute up to a maximum of 30% of the value of the pension in return for a one-off lump sum and a reduced pension.