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Golden parachute payments in the public sector

Golden parachute payments in the public sector

Legislation commences today which will allow regulations to limit golden parachute payments in the public sector.

Such payments may be limited to £95,000 under the regulations. The £95,000 amount can include:

  • any payment in lieu of notice
  • any redundancy pay
  • any payment on voluntary exit
  • any severance payment or other ex gratia payment
  • any payment to reduce or eliminate an actuarial reduction to a pension on early retirement
  • any payment in respect of an outstanding entitlement or under the terms of a contract
  • the value of any shares or share options

The new law is in response to reported concerns about excessive exit payments being received by public sector workers, some of whom have reportedly taken redundancy and then become consultants to their previous employer immediately afterwards.