Government soon to unveil McCloud remedies

The government is “developing proposals” to address the unlawful age discrimination identified in public sector pension schemes by the Court of Appeal in the McCloud case.

Under the reforms introduced in 2015, older members could stay in their existing schemes, while newer members had to transfer to a less generous scheme.

However, in 2018 the court ruled in favour of judges and firefighters that protection offered to older members of their respective schemes amounted to unlawful age discrimination.

In a written ministerial statement, Economic Secretary to the Treasury John Glen said the proposals the government was considering would “allow relevant members to make a choice as to whether they accrued service in the legacy or reformed schemes for periods of relevant service, depending on what is better for them.”

If an individual’s pension circumstances change as a result, the government may also need to consider whether previous tax years back to 2015-16 should be re-opened in relation to their pension, he added.

Members of public service pension schemes with relevant service will not need to make a claim for the eventual changes to apply to them, Glen confirmed.

Last year the government announced a pause to the cost control mechanism in public service pension schemes, due to uncertainty about benefit entitlements arising from the McCloud judgment. Alongside its proposals for addressing discrimination, the government will also provide an update on the cost control mechanism.