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The McCloud Judgment

In 2014, the government introduced reforms to public service pension schemes and most active members were moved into the new career average schemes with later normal retirement ages. The government created some transitional rules for workers within ten years of retirement to protect them from the changes, on the basis that they had less time to plan for their retirement.

These changes were challenged by members of the Judicial (the McCloud case) and Firefighters’ pension schemes on the grounds of age discrimination. In July 2019 the Court of Appeal ruled that younger workers – those more than ten years from retirement – were unfairly discriminated against.

The government accepted the Court’s decision and has confirmed that the difference in treatment will need to be remedied across the board. All public service schemes including the LGPS will be affected.

The final remedy will probably mean that pension administrators must compare the benefits payable under the current rules with the benefits that would have been paid if the Scheme had not changed in 2014 and then pays the higher. This remedy will apply automatically – LGPS members who meet the qualifying criteria do not need to take any action.

For most members there will be no increase to their pension benefits as their current benefits are higher than they would have been in the old scheme. For others any increase is likely to be small because of relatively low salary growth since the new schemes were introduced.