personal finance

Government to remedy public service pension schemes – including NHS & firefighter pensions


A landmark court ruling found the changes made to judges’ and firefighters’ pensions in 2015 to be discriminatory – and the decision will now see the government remedy the policy across the rest of the public sector, the government confirmed yesterday. In a written statement, Chief Secretary to the Treasury, Elizabeth Truss, said that as “transitional protection” was offered to members of all the main public service pension schemes, the remedy will apply across all of these retirement plans. This includes the public service pensions for those in the NHS, civil service, local government, and for teachers. It also applies to schemes for the police, armed forces, judiciary, and fire and rescue workers.

Last month, the Supreme Court refused to give the government permission to appeal the Court of Appeal’s judgement that the 2015 changes to firefighters’ and judges’ pension schemes discriminated against younger workers.

Under the changes, those who were 10 years from retirement were protected from the reforms, under “transitional protection”.

Meanwhile, younger workers were shifted onto different pension arrangements.

However, the landmark ruling found these transitional provisions which were introduced to the reformed judges and firefighters pension schemes in 2015, gave rise to unlawful age discrimination.

Ms Truss said in Monday’s statement: “The government respects the Court’s decision and will engage fully with the Employment Tribunal to agree how the discrimination will be remedied.”

She also said: “The matter will be remitted to the Employment Tribunal in respect of the litigants in the firefighters and judicial pension schemes.

“It will be for the Tribunal to determine a remedy.

“Alongside this process, government will be engaging with employer and member representatives, as well as the devolved administrations, to help inform our proposals to the Tribunal and in respect of the other public service pension schemes.”

In the statement, the Chief Secretary to the Treasury confirmed that initial estimates would suggest that the remedy for this discrimination could add around £4 billion each year to scheme liabilities from 2015.

She said: “Initial estimates suggest remedying the discrimination will add around £4bn per annum to scheme liabilities from 2015.”

Jon Greer, head of retirement policy at Quilter commented on the announcement, saying: “As the two remaining Tory party candidates battle it out for the final week they are pledging anything that will win over party members, including to fix the NHS pensions allowance crisis if they are brought to power.

“This is, however, a pension issue that may pale into insignificance compared to the £4 billion a year public sector funding gap they need to plug thanks to a monumental mistake presided over by the coalition government.

“Elizabeth Truss confirmed that, following the Supreme Court judgement that reforms to judges and firefighters pension schemes was unlawful, the government will now have to remedy the policy across other public sector schemes including the NHS, civil service, local government, teachers, police, armed forces and judiciary.

“Truss says the Government will be trying to control costs and so it’s likely they will want to move everyone onto the 2015 basis for future accrual as soon as possible.

“This needs to be worked through and means that the younger members are entitled to have their benefits ‘levelled up’ so that they are treated as having the same protection as the older members, until a non-discriminatory amendment can be made.

“The cost to the Government is significant since they will have to provide pre 2015 members with higher benefits for a longer period than expected and it’s not clear that the full cost has been factored into the £4bn cost approximation or if indeed there will be an even bigger hole in the new Prime Minister’s pockets.”

READ MORE: State pension age: Reversing women’s pension age estimated to cost £181bn, government says



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