Post date: Feb 10, 2020 3:39:32 PM
LGPS - implications of recent pension age discrimination cases
In 2015 the Fire Brigades Union and some Judges took their pension schemes to court on the grounds of age discrimination linked to transitional protection given to some workers when the updated pension schemes were introduced a few years ago. Subsequently an Employment Tribunal agreed their case and rejected the government appeal. This is known as the 'McCloud' case.
The government has since confirmed that the difference in treatment provided by the transitional arrangements should be remedied across all public sector pension schemes including the LGPS. The ruling only applies to the protection introduced in April 2014 for England and Wales and in April 2015 for Scotland and Northern Ireland.
The LGPS transitional protection is an underpin for those who were within 10 years of Normal Pension Age in April 2012. It has hardly been used because the better accrual rate for the 2014/15 sections offset the small early retirement reduction for this age group. The remedy will apply only to those in service at April 2012 with service after 2014/15. Very few members have received a big enough pay increase since the new sections came in, to trigger the protection. Nonetheless it is this transitional protection that is seen to be age discriminatory and needs to be equalised for all other members.
The government is currently discussing how members currently outside transitional protection will be compensated. Guidance will be issued by central government and how it will be implemented will be sorted out by the relevant Scheme Advisory Boards.
We have been made aware that some legal firms are trying to encourage public service pension scheme members to submit claims - at a significant charge to the member. At this stage we advise that there is no need to lodge a case as the agreed compensation will be applied to all members affected anyway.
The remedy may be simpler in the LGPS than other schemes because the protection means that at retirement members get the pension they would have earned in the pre 2014/15 final salary section if it is higher than the pension earned in the CARE section for service from April 2014/15. In other words the member gets whichever is higher for the service after the date of the change.
UNISON will be involved in these discussions and will work to ensure that no one covered by these judgements is worse off as a result.
UNISON will also continue to press for the improvements in benefits and contributions that should have come in on 1 April 2019 (England and Wales) as a result of the scheme valuations showing that the cost of the benefits had gone down. These improvements were suspended whilst the government assessed the results of the McCloud Case. Now that the situation is clearer we are pushing for the improvements to be implemented as soon as possible.
Branches will be updated of further developments as they arise. Further details on McCloud and the LGPS should be directed to: Glyn Jenkins UNISON Head of Pensions, g.jenkins@unison.co.uk<mailto:g.jenkins@unison.co.uk>