Age discrimination in reformed public service pension schemes

When the 2015 public service pension schemes were introduced, transitional arrangements for when staff would move to the reformed schemes were put in place such that those closest to retirement would stay in their original (legacy) scheme for longer. In recent legal cases, the courts found that the way in which members of the Firefighters and the Judiciary Pension Schemes were moved to their new 2015 Pensions Schemes under these transitional arrangements was discriminatory on grounds of age. These cases as sometimes referred to as McCloud after the name of one of the claimants.  

This discriminatory effect now must be removed and Government have committed to applying the same principle and remedy to all public service pension schemes, including the NHS Pension, not just those schemes involved in the legal cases. NB – It was the transitional protection arrangements that were found to be discriminatory, not the reformed schemes themselves.  

In February 2021 Government confirmed the way in which it intended to deliver remedy and in July 2021 it introduced the primary legislation necessary to enact changes. 

The consultation on member contributions to the NHS pension scheme has closed. Our position was to resist changes that would negatively impact our members. However, the changes were proposed and then imposed and will take effect from October 2022 and April 2023. The changes will have different impacts on scheme members depending on how much they earn. For more information see our update.

I was in the 1995 scheme with Special Class Status (SCS) before I was moved to the 2015 scheme under tapered protection. I’m not going to be 55 until after April 2022, what will happen to my SCS? 

There is no Special Class Status (SCS) in the reformed 2015 NHS Pension Scheme so this will not apply to the benefits you accrue from 1/4/22 onwards. At age 55, if you meet all the other eligibility criteria for SCS, you will be able to claim your legacy pension under what is currently known as “preserved rights”. You need not claim your 2015 benefits at the same time but if you do, they will be reduced to take account that you are claiming them before your normal pension age for that Scheme.

What if I’m due to retire before April 2022? 

You can claim your pension as usual, and it will be calculated according to the scheme rules at that time. Your benefits will be reassessed as soon as possible after October 2023 and your period of membership from 1st April 2015 to retirement will be paid at whatever is the higher amount of either legacy benefits or reformed benefits. 

I retired in 2020. Will my pension benefits change? 

Because you retired during the remedy period your case will be reviewed to see whether paying your benefits under 2015 or your legacy scheme is better for you. You will then be able to elect which set of benefits you prefer according to your circumstances. The Bill says that cases such as yours will be reviewed at some point after October 2023 (or before if the scheme administrator is able to).

I lost the ability to retire at 60 when I was transitioned to the 2015 scheme 3 years ago but now I find I may be treated as if I was in my old scheme after all. Can I make a retrospective application now? 

You can apply now but your benefits will be calculated according to the scheme rules at the time of retirement. Your claim cannot be backdated, and your benefits will be reassessed but possibly not until after October 2023. If your pension would be reduced now because you are claiming it “early” under your current scheme rules, yet the legacy rules would have allowed for full benefits, this will be addressed when your situation is reassessed by the pension administrator. Such reassessments could start as soon as the legislation has been passed but no guarantees are being made about timescales as yet and the Bill only requires reassessments to take place after October 2023. 

I’m very close to retiring. Can I stay in my legacy scheme for a couple more years? 

No. HM Government is clear that it will not allow any active members to remain in the legacy schemes after April 2022. To do so – according to age – would be to add further discrimination into the scheme provisions and would not be legal.

I chose to stop the pension because I didn’t want to have to move to the 2015 scheme but if I’d stayed in those years would be calculated under the old scheme arrangements and I now wish I hadn’t opted out. What can I do? 

The PSP&JO Bill 2021 states that for those who opted out of the pension scheme between 2015 and 2022 will be allowed to reinstate that service – subject to scheme eligibility criteria and paying the required contributions. So you will be able to “buy back” the time you weren’t in the legacy scheme. We are awaiting further Government guidance on the potential scope of such cases, including timescales, so please watch this space if you think this is relevant for you. 

Can I reverse a decision I made about my pension after 2015 now that this is happening? 

If you feel you have made a decision that you would not otherwise have done because of the Government’s 2015 scheme reforms and which has caused you financial detriment, you will potentially be able to pursue this. Such situations are referred to as “Contingent decisions” We are awaiting further Government guidance on the potential scope of such cases, including timescales, so please watch this space if you think this is relevant for you.

What we do know is that there will be no automatic revisiting of cases so you will have to raise the issue and to provide evidence to substantiate it. It is not yet known when the scheme administrators will start handling such cases.

I have already retired and am drawing my pension. I want to come back to work. Can I still pay into a pension? 

Yes, you can pay into a separate 2015 scheme pension up to the age of 75; however, not if you are drawing from the 1995 scheme. In such circumstances most employers offer an alternative defined contribution scheme as an option.  

What do the changes mean for ill health retirement? 

Members are now subject to a later retirement age under the 2015 scheme. This is likely to make IHR applications more difficult, however, the position is subject to judicial review.

I was in the 2008 and moved to the 2015 scheme under tapered protection. Will I have to work longer? 

With all these changes, should I transfer to a private pension? 

Members should seek advice from an IFA; however, opting out of the occupational scheme means members lose out on the 20.8% employer contribution, access to death in service benefits and potentially reduced ill health retirement benefits.