Scottish Council Pensions Report February 2021 (McCloud Judgement)

thumbnail of Pension report to Scottish CouncilThis is a Pensions Report for Scottish Council on 6 February 2021.

It gives further information on the McCloud judgement and the cost of pensions, which affects all public sector pensions.

The briefing sheet for NHS pensions is here 

Pension protections

In 2015 the government reformed public service pensions, meaning most public sector workers moved into new pension schemes. In 2020, the Court of Appeal ruled (in the McCloud case) that some protections given to workers as they moved to the new schemes discriminated against younger workers. As a result, all members will now benefit from these protection arrangements. In most schemes, members will make an informed choice when they retire. In the LGPS, the most favourable option will be automatically worked out.

Cost sharing

HM Treasury uses a formula to estimate the cost of member benefits in public sector pension schemes every 3 years. This will be recalculated to include the costs of the McCloud judgement, but if the cost has fallen significantly then pension scheme benefits will be improved to increase the cost back to the target level. Branches will be consulted on the preferred improvements.