Views:


Why is the government making changes to public service pension schemes following the Court of Appeal ruling on protection?

When did the discrimination identified by the Court of Appeal ruling on protection take place?

What is the government doing to remove theis discrimination identified by the Court of Appeal ruling on protection?

Will I be affected by the pension changes following the Court of Appeal ruling on protection?

What will I need to do if I am affected by the changes to public service pensions?

I am receiving a dependant’s pension, will the changes to public service pensions apply to me?  

If I opted out of the 2015 Scheme or made changes to my pension as a result of the reforms, can this be reversed?

Will the changes to public service pensions result in any changes to my tax?

Can I submit a scheme pays application now for tax charges I think I may have for the remedy period once my remedy period service moves into the legacy scheme?

I have purchased additional pension / ERRBO – is there more information on how this will be impacted?

What pension scheme will I be a member of from 1 April 2022?

Who should I contact for more information?

I’m an employer, what do I need to do?

Why is the government making changes to public service pension schemes following the Court of Appeal ruling on protection?

In 2015 the government made changes to reform the majority of the main public service pension schemes. These reforms did not apply to members within 10 years of their normal pension age on the 31 March 2012, who remained in their legacy schemes with ‘transitional protection’.

The Court of Appeal later found this to be discriminatory against younger members in the judicial and firefighters’ pension schemes – the government accepted that this discrimination existed in all schemes where transitional protection was introduced. It is sometimes referred to as the ‘McCloud judgment’.

Following the ruling the government confirmed that it would take steps to address the discrimination in all affected public service pension schemes.

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When did the discrimination identified by the Court of Appeal ruling on protection take place?

The period this discrimination will apply is between 1 April 2015 and 31 March 2022, and this is called the remedy period.

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What is the government doing to remove theis discrimination identified by the Court of Appeal ruling on protection?

If you were a member of the scheme on 31 March 2012 and continued in service between 1 April 2015 and the 31 March 2022 (or your retirement date if earlier), or were a member of the scheme on 31 March 2012 then left service but returned within 5 years, you will be asked to decide which pension scheme benefits you would like to receive for that period.

This is because automatically moving all members back into the legacy pension scheme, without giving you a choice, would leave some worse off, so it is important you choose the scheme benefits that are best for you.

Eligible members will be given a choice when they retire, of which pension scheme benefits they would prefer to take for the remedy period. This is called the Deferred Choice Underpin.

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Will I be affected by the pension changes following the Court of Appeal ruling on protection?

If you joined a public service pension scheme on or before 31 March 2012 and you were still a member of the scheme on 1 April 2015, the changes will apply to you.

Specifically, if you meet the following criteria, you will be in scope of the changes:

  • were members, or eligible to be members, of a public service pension scheme on the 31 March 2012
  • were members of a public service pension scheme between 1 April 2015 and 31 March 2022
  • the two periods above were continuous (or treated as continuous under the scheme regulations, including those with a qualifying break in service of less than 5 years).

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What will I need to do if I am affected by the changes to public service pensions?

If you’re an affected member, the government has stated that any continuous service you have between 1 April 2015 and 31 March 2022 (the remedy period) will be placed into your legacy scheme, from the date the deferred choice underpin is implemented in October 2023. This is when the processes will be in place to allow you to make a decision on retirement. 

When your benefits become payable e.g. when you retire, you’ll be asked if you want to receive legacy scheme or reformed scheme pension benefits for your service between 1 April 2015 and 1 April 2022. We’ll provide you with information at the time to help inform your decision.

Asking you to make this choice when you retire means you’ll know what you’re entitled to under each option, making it easier for you to make the right decision for you.

If you’ve already retired, or retire before 1 October 2023, we’ll write to you and ask you to make your choice retrospectively. If needed, we’ll backdate all payments to your date of retirement.

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I am receiving a dependant’s pension, will the changes to public service pensions apply to me?  

If you’re receiving a spouse’s or dependant’s pension for a late member who joined a public service pension scheme on or before 31 March 2012 and who was still a member on 1 April 2015, you may also be asked to make a choice.

Where an eligible member has died since 1 April 2015, we will review these cases as a priority. 

The choice between benefits will fall to the late member’s surviving spouse or partner. If there are children also in receipt of a survivor pension, and the decision maker lives in a separate household to the child, any decision taken will not affect the child’s pension. Where the child and decision maker live in the same household, the usual rules around total survivor benefits payable will apply.

We’ll be reviewing affected dependant benefits as a priority. We hope to be able to do so before the 1 October 2023 but the legislation that allows schemes to do this needs to be in place before this can happen.

If you’re affected, we’ll write to you once this work has started to provide you with more information to help you understand what you’ll need to do. We’ll share more information via our website and FAQs as these  processes are confirmed. 

 

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If I opted out of the 2015 Scheme or made changes to my pension as a result of the reforms, can this be reversed?

Where members can show that they would have acted differently when making decisions about their scheme membership had it not been for the discrimination, the government has said that there will be a way for these cases to be considered by individual pension schemes.

These cases are known as contingent decisions.

As more guidance becomes available on how members will be able to submit contingent decisions for consideration and how these cases will be handled, we’ll share this with members via our website and FAQs. 


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Will the changes to public service pensions result in any changes to my tax?

The majority of eligible members will see no change to their tax position over the remedy period.

In its public service pensions consultation response, the government has stated that for some members, the pension changes will cause their tax position to change, which could result in tax charges for the member, or the member becoming entitled to a reimbursement of tax previously paid.

In some cases, the pension changes may mean that individuals will have to pay new or higher annual allowance charges, but typically only where their projected pension at retirement has increased. Adjustments to lifetime allowance charges may also be required, where retired members’ accrual changes.

Some members may also face changes in their contributions in respect of the remedy period, which may also affect their income tax position.

Where a member has already retired, a member’s total pension income may also change, and tax will be payable on any increase in pension.

You can find more information at the GOV.UK website and we’ll be sharing more information as this is available.

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Can I submit a scheme pays application now for tax charges I think I may have for the remedy period once my remedy period service moves into the legacy scheme?

If you’re an affected member, the government has stated that any continuous service you have between 1 April 2015 and 31 March 2022 (the remedy period) will be placed into your legacy scheme from 1 October 2023. This is when the processes will be in place to allow you to make a decision on retirement.

The government expects that for most members this won’t affect their tax liabilities for the remedy period. As pension accrues at a lower rate in the legacy scheme it is less likely that you’ll incur higher annual allowance charges as a result of this period of service being placed into the legacy scheme.

As these changes haven’t been implemented yet, it isn’t possible for us to process scheme pays applications at this time for charges you may incur in future. The government is currently considering how scheme pays and repayment plans can be used to accommodate any increases in tax charges that may arise from the changes outlined above and we’ll share more information with members as this becomes available via our website.

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I have purchased additional pension / ERRBO – is there more information on how this will be impacted?

In its consultation response, the government has said it’s considering ways that members may retain rights in the schemes in which they made voluntary member contributions. We’re awaiting more detail and guidance on additional pensions and how these will be handled. Once this has been confirmed, we’ll share the information via our website and FAQs. 

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What pension scheme will I be a member of from 1 April 2022?

To make sure all members are treated equally, all active members, regardless of their age, will be members of the reformed scheme that many of our members are already part of. This will happen from 1 April 2022. All legacy pension schemes will be closed, including the 1995/2008 NHS Pension Scheme.

If you are member of the 1995/2008 Scheme, you will keep any service you have earned up until 1 April 2022 and you’ll be able to access these benefits in the same way and at the same time as you can now. Any pension benefits you earn after the 1 April 2022 will be in the reformed pension scheme.

This ensures the government’s aims of rewarding hardworking public servants, as well as making sure schemes are sustainable and affordable in the future, are met. 

You can read more about your pension after 1 April 2022 on our website.

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Who should I contact for more information?

Our website is where you’ll find the latest and most up to date information. We’re working through the impacts to affected members and as more information becomes available, we’ll share this with you.

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I’m an employer, what do I need to do?

Following the consultation response, the government will be introducing new legislation to allow affected members to choose between legacy or reformed scheme pension benefits for the remedy period when their benefits become payable.

Once this legislation is passed, there’ll be more information for you to share with your employees about how the different processes will work.

For now, you may wish to share a link to the information on our website and these FAQs with your members.

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