How does the McCloud judgement affect the local government pension scheme?

Last updated: 31 Jul 2020

The reforms to public sector pensions agreed in 2012 were implemented differently in the Local Government Pension Scheme (LGPS) to the Fire and Judicial pension schemes.

The LGPS introduced a new scheme in April 2014 for all members, however an underpin was introduced for members who were in service on the 1 April 2012. This underpin was based upon the same principles as the protection arrangements that were deemed unlawful age discrimination in the Employment Tribunals brought against the Firefighters’ and Judicial Pension Schemes. These are known as the Sargeant and McCloud cases.

The underpin ensured that members of the scheme who were in service at 1 April 2012 and meet certain age criteria would have their benefits calculated using the better of the 2008 rules or the 2014 rules.

The Government have therefore conceded that the underpin needs to be amended and have launched a consultation on amendments to the underpin in the LGPS. The proposal in simple terms is for the underpin to apply to all members who were in service on the 1 April 2012 until the 31 March 2022.

The qualification for the proposed revised underpin continues to be only for members who were in service on the 1 April 2012. Those joining the local government pension scheme after this date will not benefit from the revisions to the underpin.

Prospect will respond to this consultation on behalf of members before the closure of the consultation in October. This response will be available to members in the Prospect Library.