personal finance

Landmark pension ruling to apply to all UK public sector schemes

A landmark court ruling that changes made to firefighters’ pensions in 2015 were discriminatory will apply to millions of members of public sector schemes, the government has confirmed.

Last month, the Supreme Court refused the government permission to appeal against an earlier court ruling that 2015 changes to firefighters’ and judges’ pension schemes discriminated against younger workers.

Under the 2015 changes, workers 10 years from retirement were protected from reforms which saw younger workers shifted into less generous pension arrangements. In 2018, the court found that those too far away from retirement, and too young to qualify for “transitional protection”, were unfairly discriminated against.

In a written statement on Monday, the Treasury said as “transitional protection” was offered to members of all the main public service pension schemes, including the NHS, teachers and civil service, the remedy will have to apply across all these retirement plans.

“Continuing to resist the full implications of the judgment in Court would only add to the uncertainty experienced by members,” said Liz Truss, chief secretary to the Treasury, in the statement.

The Employment Tribunal will now decide how the government should compensate members affected by discrimination. However, the government has estimated applying the ruling would add around £4bn a year to scheme liabilities.

“It’s vital that public sector workers have confidence in the future of their pensions,” said Paul Nowak, deputy general secretary of the Trades Union Congress. “The government’s commitment to engage with trade unions on the implications of the McCloud judgment is welcome. This engagement needs to be informed by serious scheme level discussions involving the relevant unions.”

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