McCloud Legal Judgement
Following the findings in the McCloud legal judgement, certain elements of public sector pension schemes brought in at the time of the 2015 pensions reform have been deemed age discriminatory. In the case of the Local Government Pension Scheme, it is the “underpin” provision which gives special protection to the rights of older members that has been classed as age discriminatory. In response, the UK Government have confirmed that the discrimination will be remedied without scheme members having to take individual legal actions.
A consultation exercise regarding the changes needed to correct the discrimination has been undertaken by the Scottish Public Pensions Agency (SPPA) on behalf of Scottish Ministers.
In the consultation (please click here to see a copy), it is proposed that all members who were in the scheme on 31 March 2012 and who continued until at least 1 April 2015 should be provided with underpin protection. This would mean that for the period from April 2015 to March 2022 (or date of leaving if earlier), members would have to be given the better of their “old style” final salary benefits or their new Career Average entitlement.
The changes would be backdated and apply to anyone who has left, retired or died and who meets the new criteria since 2015. In some cases, this will mean retrospectively recalculating benefits. Latest calculations suggest this will add around 0.5% to the total liabilities of a typical fund.
Further information on this subject will be made available as it comes into the public domain.