The Scottish Public Pensions Agency (SPPA) has published a new circular which lays out the UK government’s decision on remedying the discrimination in the 2015 reforms to public service pension schemes. This follows a decision by the Court of Appeal. This is usually referred to as the McCloud Judgement.
The circular can be opened by clicking on the image on the left.
The UK Government introduced reform of a range of public sector pension schemes in 2015. The reforms included protections for those near their retirement age which allowed them to stay in legacy schemes. When challenged the Court of Appeal found these to be discriminatory against younger scheme members in judicial and firefighter pension schemes. The government accepted that the judgement had implications for other schemes. The remedy could not simply be to return everyone to the old schemes as some people would have been worse off under those schemes. Last summer the government consulted on options and they have now published their decision.
The route forward will be Deferred Choice Underpin: (DCU). At its most basic this means that pension scheme members at retirement will be able to choose which scheme their contributions from 2015 until 2022 are in. From 1st April 2022 everyone who is still working (and contributing to a pension scheme) will be a member of the reformed schemes. The attached SPPA circular outlines the decision and contains a useful FAQ for scheme members.
No action is required by scheme members just now. The SPPA will contact those affected further information will be available on their website. Members will need to take advice on the implications of the choice they have to make when they access the scheme (i.e. retire) as the choice will very much depend on individual’s circumstances.
There will be a meeting for health branches to discuss the DCU. Invites will follow.