McCloud Court Case
Latest News
On the 14th May 2021 the Local Government Minister, Luke Hall, issued a written statement confirming the key changes to scheme regulations that will be made to remove age discrimination from the LGPS. You can view the statement on the UK Parliament website at:-
https://questions-statements.parliament.uk/written-statements/detail/2021-05-13/hcws26
In short, the statement confirms the following
- The age requirement for underpin protection will be removed
- A member will not need to leave with an immediate entitlement to benefits to qualify for underpin protection
- The remedy period will end on 31 March 2022
- The underpin calculation will be based on final pay at the underpin date, even if this is after 31 March 2022
- There will be two stages to the underpin calculation: the first on the underpin date which is the date of leaving or age 65, if earlier, the second when the benefits are paid
- The regulations will be retrospective to 1 April 2014.
It is expected the Ministry for Housing, Communities and Local Government (MHCLG) will issue a response to the consultation and publish draft regulations later this year. We will of course keep our members up to date with any changes as and when we are made aware of them.
What is the McCloud case?
When the LGPS changed from a final salary to a career average pension scheme in 2014, protections for older scheme members were introduced. Similar protections were provided in other public sector pension schemes. The Court of Appeal ruled that younger members of the Judges’ and Firefighters’ Pension schemes have been discriminated against because the protections do not apply to them. The Government has confirmed that there will be changes to all main public sector schemes, including the LGPS, to remove this age discrimination. This ruling is often called the ‘McCloud judgment’.
What does it mean for the LGPS?
When the LGPS changed from a final salary to a career average pension scheme in 2014, members who were within 10 years of their Normal Pension Age (usually age 65) on 1 April 2012 were provided with a protection called the 'underpin'. When a protected member takes their pension, the benefits payable under the career average and final salary schemes are compared and the higher amount is paid.
The Government will need to provide younger members with a protection equal to the underpin protection provided to older members in order to remove the discrimination.
Will the changes apply to me?
The Government intend for the changes to apply to members who were in service on 31 March 2012 and also have service after 31 March 2014 (without a break of more than five years).
If you left the scheme before 1 April 2014 you built up benefits in the final salary scheme only. These changes will not affect your pension.
What do I need to do?
You do not need to take any action. The Government has confirmed that members who qualify for protection do not need to make a claim for the changes to apply to them.
I have already left the LGPS, will the changes apply to me?
If you qualify for protection and have membership in the LGPS after 31 March 2014 the changes will apply to you, even if you have left the scheme.
I have taken payment of my LGPS pension, will the changes apply to me?
If you qualify for protection and have membership in the LGPS after 31 March 2014 the changes will apply to you, even if you are receiving your pension from the LGPS.
For more information please see the members FAQs on the national LGPS website https://www.lgpsmember.org/news/story/mccloud_qanda.php