In June there was a ruling in the Supreme Court that could impact on public service pensions. The court refused Government permission to reverse the Court of Appeal’s 2018 judgement in the McCloud and Sargeant cases.
Although the case was brought in relation to judges; and firefighters’ pension schemes, it is going to have implications for all public service pension schemes. This includes your Teachers’ Pension Scheme.
The judgement found that both pension schemes became unfavourable to some members when the career average arrangement was introduced. The judgement requires the government to change regulations because they were deemed to discriminate on the basis of age.
What does this mean?
The final decision on what happens now is called the remedy. This requires the government to compensate members who suffered discrimination following the McCloud judgement. This compensation is to be decided by an Employment Tribunal. The remedy will apply to all members in public service schemes, including teachers. It is likely that representations from the Teachers’ Pension Scheme will be involved in seeking the remedy with the government.
It is likely that the remedy will rectify the issue where some members were better off in the old schemes. However, it is not as simple as putting all these people back on the old scheme. The aim of the remedy will be to make sure every member is treated equally – and that members see no reduction in benefits. Therefore, how the remedy will apply will vary across members and across public service pensions.
At the moment, the judgement has been made for judges and firefighters, and the government has accepted this includes all public service members. As yet, what this judgement means in practice is still to be decided. The government has agreed to work in cooperation with the pension schemes to come up with the remedy. Remember that the point of the tribunal is to come up with a remedy to the age discrimination, not to return all people to the older scheme.
The content in this article was correct on 21st October 2019. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on pensions for teachers and non-teachers. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.