When the Government reformed public service pension schemes in 2015 it introduced protections for older members. In December 2018, the Court of Appeal in England and Wales ruled that younger members of the Judges’ and Firefighters’ Pension schemes have been discriminated against because the protections do not apply to them. This ruling is often called the ‘McCloud judgment’ after a member of the Judges’ Pension Scheme involved in the case.
The Westminster Government confirmed that there will be changes to all main public sector schemes, including the LGPS, to remove this age discrimination. HMT published a consultation on proposals for the unfunded public service schemes in England, Wales and Scotland on 16th July 2020. A separate consultation was issued for the funded LGPS in England and Wales. The reformed public service schemes in Northern Ireland incorporate similar age-based protections and changes are required to remove age discrimination in those schemes also. The Department of Finance consulted on proposals for the unfunded public service pension schemes in Northern Ireland and the Department for Communities issued a separate consultation on proposals for the funded LGPS (NI) on 11 November. This consultation closed on 31 January 2021.
In the Department for Communities consultation it is proposed that revised protections are extended to cover all members who were in active scheme membership on or before 31 March 2012 and have membership in the CARE schemes (without a 5 year break) after 31 March 2015.
If you left the scheme before 1 April 2015 you built up benefits in the final salary scheme only. These changes will not affect your pension.
If you joined the scheme after 31 March 2015 you will have built up benefits in the CARE scheme only. These changes will not affect your pension.
Most members are unlikely to see an increase to their pension, and where an increase is applied, it is likely to be small. This is because most members will build up a higher pension in the career average pension scheme than they would have under the final salary scheme.
We will know more about when the changes are likely to take effect when the Department of Finance and the Department for Communities publish their responses to the consultations on removing the discrimination. We do not expect any changes to be introduced before April 2022.
When the LGPS (NI) changed from a final salary to a career average pension scheme in 2015, members who were within 10 years of their Normal Pension Age (usually age 65) on 1 April 2012 were provided with a protection called the ‘underpin’. When a protected member takes their pension, the benefits payable under the career average (CARE) and final salary schemes are compared and the higher amount is paid.
The Department for Communities will need to provide younger members with a protection equal to the underpin protection provided to older members to remove the discrimination. The outcome of the recent consultation is awaited.
You do not need to take any action. Members who qualify for protection do not need to make a claim for the changes to apply to them.