McCloud Judgment – Department of Finance Consultation Response

Department of Finance Consultation Response

Public service pension schemes: Changes to the transitional arrangements to the 2015 schemes (McCloud)

Beginning in August 2020, the Department of Finance consulted on options to address discrimination identified by the Courts in the transitional arrangements which were part of the 2015 reform of public service pension schemes. The consultation set out the proposals to remedy discrimination for affected members and to ensure its removal in future. The consultation closed on 18 November 2020 and the Department of Finance published its response to this consultation on Thursday 25 February 2020.

A brief background note is provided below together with links to the full response and ancillary documents prepared by the Department of Finance. By way of further assistance we have also shared an ‘FAQ’ document drafted by the Department of Justice.

The Board, as the Scheme Manager of the Police Pension Scheme, is keen that any interested parties are aware of outcome of the consultation and the approach to be taken going forward.

Background

In 2015, the Government introduced reforms to public sector pension schemes. This resulted in establishing a number of new reformed schemes across the public sector. For civil servants, this scheme was alpha. Depending on how close they were to scheme retirement age, existing civil servants who were in post on 31 March 2012 either:

• moved into alpha straight away
• remained in their old scheme (transitional full protection), or
• had a staggered move into alpha (taper protection)

All civil servants who joined after 31 March 2012 moved into alpha in 2015.

Similarly, officers joining the Police Service of Northern Ireland after 31 March 2021 moved into the 2015 ‘CARE’ Scheme.

In December 2018, the Court of Appeal held the transitional protection offered to members who were closer to retirement age gave rise to unlawful discrimination, as younger members were not eligible to receive it. This is known as the ‘McCloud Judgment’. A written ministerial statement published on the 15 July 2019 confirmed that, as transitional protection was offered to members of all the main public service pension schemes, including the Civil Service Pension Scheme, the government intends to remedy the difference in treatment across all those schemes.

Consultation Response

Between 19 August 2020 and 18 November 2020 the Department of Finance undertook a consultation, the purpose of which was to address the unlawful age discrimination identified by the Courts. The Department of Finance published its response on Thursday 25 February 2020 and all relevant information can be accessed directly on the Department of Finances’ website at the following link:  https://www.finance-ni.gov.uk/publications/response-consultation-proposed-changes-transitional-arrangements-2015-schemes

For ease of reference we have included links and PDF versions of key documentation below to include the response documentation as well as a FAQ document prepared by the Department of Justice.