In December 2018 the Court of Appeal determined in the case of Lord Chancellor and Secretary of State for Justice v McCloud, Secretary of State for the Home Department v Sergeant that the public sector pension scheme transitional provisions, introduced as part of scheme reforms in 2015, were discriminatory on age grounds. The transitional provisions policy allowed some older workers to stay in the legacy (final salary) pension schemes, instead of being moved to the reformed (career average) scheme with higher normal pension ages. HM Treasury (HMT) acknowledged that the judgment applied to all main public service pension schemes that applied these protections, including the Teachers’ Pension Scheme.
Following a period of consultation, the government announced that the legacy schemes would close on 31 March 2022 and that affected members would be given a choice of how their benefits are calculated for the remedy period at the point of retirement, allowing all members to understand the consequence of their choice in relation to their retirement at that time. This is referred to as a Deferred Choice Underpin (DCU). Until the member makes their choice at retirement, all members with reformed scheme service will be returned to the legacy scheme for the remedy period (known as ‘roll back’), putting all members in the position they would have been in had the discrimination not occurred.
The Public Service Pensions and Judicial Offices Act introduced the legislative framework to address the discrimination. The Act sets out:
The retrospective provisions are the subject of this consultation. All members, employers and member representatives are invited to review the proposals contained in this consultation and provide comments.