McCloud ruling - implications for LGPS

On Monday 15 July 2019,  the Chief Secretary to the Treasury published its written statement confirming that the McCLoud remedy will apply to all public service pension schemes with transitional protections, including the LGPS.

Summary of the position

  • On Monday 27 June 2019, the Supreme Court denied the government permission to appeal the Court of Appeal’s judgement that transitional provisions introduced to the reformed judges and firefighters pension schemes in 2015 gave rise to unlawful age discrimination
  • The government respects the Court’s decision and will engage fully with the Employment Tribunal to agree how the discrimination will be remedied.
    The ruling relates to the transitional protection offered to some members – broadly those within 10 years of retirement change for the LGPS - when the reformed schemes were introduced
  • The court has found that those too far away from retirement age to qualify for transitional protection have been unfairly discriminated against.
  • As transitional protection was offered to members of all the main public service pension schemes, the government believes that the difference in treatment will need to be remedied across all those schemes. This includes schemes for the NHS, civil service, LGPS, teachers, police, armed forces, judiciary and fire and rescue workers.

The Employment Tribunal will determine the remedy in respect of the litigants in the firefighters and judicial pension schemes. Meanwhile, government will be engaging with employer and member representatives, as well as the devolved administrations, to help inform our proposals to the Tribunal and in respect of the other public service pension schemes including the LGPS.

What is not clear at this stage is how wide reaching any remedy for the LGPS will be and how this will interact with the Cost Cap process in the long term but we would expect some knock on effect.

Implications for funds

For the actuarial valuations, the extent to which there may be any additional liabilities and the implications for contributions will need to be considered.