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Age discrimination in reformed public service pension schemes

Age Discrimination in reformed public service pension schemes - including the NHS Pension Scheme (McCloud) 

When the 2015 public service pension schemes were introduced, transitional arrangements for when staff would move to the reformed schemes were put in place such that those closest to retirement would stay in their original (legacy) scheme for longer. In recent legal cases, the courts found that the way in which members of the Firefighters and the Judiciary Pension Schemes were moved to their new 2015 Pensions Schemes under these transitional arrangements was discriminatory on grounds of age. These cases as sometimes referred to as McCloud after the name of one of the claimants.  

This discriminatory effect now must be removed and Government have committed to applying the same principle and remedy to all public service pension schemes, including the NHS Pension, not just those schemes involved in the legal cases. NB – It was the transitional protection arrangements that were found to be discriminatory, not the reformed schemes themselves.  

In February 2021 Government confirmed the way in which it intended to deliver remedy and in July 2021 it introduced the primary legislation necessary to enact changes. 

The Bill covers all four UK countries and makes way for each pension scheme to consult on regulations to start to deliver the following from October 2023 at the latest:

Giving eligible members the choice at retirement of whether they wish their pension benefits for 2015 to 2022 to be calculated according to legacy or reformed scheme rules. Eligible members are those individuals who were members of a relevant public service scheme such as the NHS Pension Scheme on or before 31 March 2012 and on or after 1 April 2015 (including some members who took a break in membership under scheme rules).

Recalculating the pension benefits for all scheme pensioners whose pension crystalised between 1 April 2015 and 31 March 2022 – including scheme members who died in service or in retirement. These are known as “immediate detriment cases”.

Allowing scheme administrators to consider cases presented to them where members or pensioners believe they would have made different pension choices had they known this situation would come to pass. These are known as “Contingent decisions”.

In addition to this Bill, Government has signalled that it will close the legacy schemes for future accrual from 1 April 2022. This will be enacted through secondary legislation and/or scheme regulations and means that all active members of the NHS pension schemes on 1 April 2022 will be moved to (if they are not there already) the 2015 reformed scheme arrangements. Pension benefits up to this date will not be lost.

The UK government have also produced further detailed guidance. 

Your Trade Union Committee are overseeing our work on pension scheme changes, including our positions and approach on lobbying the legislation making its way through Parliament. This approach will be ratified through the Committee, our Council and Executive Team. Further updates on the Bill as well as any formal written consultation responses and public briefings will also be available to read on the RCN website.  

You will be able to read any formal written consultation responses as they will be published on the RCN website.  

You will receive notification from the Scheme administrator of the changes that affect you at a later date. We are working with them and the Health Departments to ensure you get the information from them that you need to understand the impact the changes have on you. 

The consultation on member contributions to the NHS pension scheme has closed. Our position was to resist changes that would negatively impact our members. However, the changes were proposed and then imposed and will take effect from October 2022 and April 2023. The changes will have different impacts on scheme members depending on how much they earn. For more information see our update.

I was in the 1995 scheme with Special Class Status (SCS) before I was moved to the 2015 scheme under tapered protection. I’m not going to be 55 until after April 2022, what will happen to my SCS? 

There is no Special Class Status (SCS) in the reformed 2015 NHS Pension Scheme so this will not apply to the benefits you accrue from 1/4/22 onwards. At age 55, if you meet all the other eligibility criteria for SCS, you will be able to claim your legacy pension under what is currently known as “preserved rights”. You need not claim your 2015 benefits at the same time but if you do, they will be reduced to take account that you are claiming them before your normal pension age for that Scheme.

What if I’m due to retire before April 2022? 

You can claim your pension as usual, and it will be calculated according to the scheme rules at that time. Your benefits will be reassessed as soon as possible after October 2023 and your period of membership from 1st April 2015 to retirement will be paid at whatever is the higher amount of either legacy benefits or reformed benefits. 

I retired in 2020. Will my pension benefits change? 

Because you retired during the remedy period your case will be reviewed to see whether paying your benefits under 2015 or your legacy scheme is better for you. You will then be able to elect which set of benefits you prefer according to your circumstances. The Bill says that cases such as yours will be reviewed at some point after October 2023 (or before if the scheme administrator is able to).

I lost the ability to retire at 60 when I was transitioned to the 2015 scheme 3 years ago but now I find I may be treated as if I was in my old scheme after all. Can I make a retrospective application now? 

You can apply now but your benefits will be calculated according to the scheme rules at the time of retirement. Your claim cannot be backdated, and your benefits will be reassessed but possibly not until after October 2023. If your pension would be reduced now because you are claiming it “early” under your current scheme rules, yet the legacy rules would have allowed for full benefits, this will be addressed when your situation is reassessed by the pension administrator. Such reassessments could start as soon as the legislation has been passed but no guarantees are being made about timescales as yet and the Bill only requires reassessments to take place after October 2023. 

I’m very close to retiring. Can I stay in my legacy scheme for a couple more years? 

No. HM Government is clear that it will not allow any active members to remain in the legacy schemes after April 2022. To do so – according to age – would be to add further discrimination into the scheme provisions and would not be legal.

I chose to stop the pension because I didn’t want to have to move to the 2015 scheme but if I’d stayed in those years would be calculated under the old scheme arrangements and I now wish I hadn’t opted out. What can I do? 

The PSP&JO Bill 2021 states that for those who opted out of the pension scheme between 2015 and 2022 will be allowed to reinstate that service – subject to scheme eligibility criteria and paying the required contributions. So you will be able to “buy back” the time you weren’t in the legacy scheme. We are awaiting further Government guidance on the potential scope of such cases, including timescales, so please watch this space if you think this is relevant for you. 

Can I reverse a decision I made about my pension after 2015 now that this is happening? 

If you feel you have made a decision that you would not otherwise have done because of the Government’s 2015 scheme reforms and which has caused you financial detriment, you will potentially be able to pursue this. Such situations are referred to as “Contingent decisions” We are awaiting further Government guidance on the potential scope of such cases, including timescales, so please watch this space if you think this is relevant for you.

What we do know is that there will be no automatic revisiting of cases so you will have to raise the issue and to provide evidence to substantiate it. It is not yet known when the scheme administrators will start handling such cases

If you need a pension forecast or have any questions about your pension, please contact your pension provider in the first instance. 

If there is a dispute with your employer or pension provider, please contact us.

Independent financial advice

Pensions and planning for retirement are both areas that require specialist advice. If you are considering alternative pension arrangements or additional pensions, then you may benefit from talking to a professional financial adviser. As a member of the RCN you are entitled to a complimentary, no obligation financial review from Lighthouse Financial Advice. 

Lighthouse can provide advice to overseas RCN members provided they are paying UK income tax. Please have your UK National Insurance and RCN membership number ready. 

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Page last updated - 30/05/2022