Civil service unions issue warning to government on pensions

19 Aug 2019

Civil service pension scheme members should not have to bear the cost of the government’s unlawful discrimination against younger members of public sector pension schemes.

Civil service pension scheme members should not have to bear the cost of the government’s unlawful discrimination against younger members of public sector pension schemes.

That was the key message to Rupert McNeil, the civil service’s chief people officer, in a letter written by Prospect on behalf of all the civil service unions* on 14 August. Members can download the letter by logging into Prospect’s website.

When public sector pension schemes were reformed in 2012, protections were granted to those who were close to retirement.

But unions representing firefighters and judges said this was unfair to younger members of those schemes and took out a case of age discrimination.

In July 2019, the Supreme Court refused to grant the government a right of appeal against the appeal court’s ruling that the changes to the pension schemes did discriminate against younger firefighters and judges.

In the letter to McNeil, the unions acknowledged that legal proceedings are still ongoing, but called for:

  • early agreement to explore potential options and remedies with the unions
  • any remedy to rectify unlawful age discrimination should not be detrimental to existing scheme members or accrued and prospective benefits
  • the government to keep its commitment to the principles of the 25-year guarantee agreed in 2012.

The unions also said the remedies for public sector schemes will need to take into account the different benefit structures of those schemes.

For the civil service pension schemes, the unions called for:

  • agreement on measures to compensate affected members to ensure they are not worse off
  • compensation for members who were denied “protection” who are worse off and for those who had “protected” status who may have benefited from moving to the Alpha scheme
  • any remedies should consider active members and those in retirement, ill-health retirement, those who have died, left service, with pension in deferment, who have taken partial retirement or transferred out
  • members in by analogy schemes and Civil Servants and Others Pension Scheme (CSOPS) members employed in outsourced organisations, to be covered by any remedies.

The unions also said that it was crucial to give staff as much clarity as possible on their pension provision so they can plan for their retirement and make informed choices. They said in the letter:

“Against that backdrop, we believe it is important:

  • to provide clarity on how the discrimination is to be addressed and what that will mean for individual scheme members
  • to provide an undertaking that no scheme member (or ex-scheme member) will be worse off as a result of any changes, and that those not included in transitional protection will be better off
  • that full attention will be paid to equality requirements, including impact assessments.”

Letter from the TUC to the chief secretary of the Treasury

The TUC also wrote to the Chief Secretary of the Treasury on behalf of the public sector unions in late July. The TUC said: “In order to inform the government’s approach to the remedy, HM Treasury and TUC officials agreed that a series of scheme specific technical discussions would be held on a non-prejudice basis.

“While discussions may differ between schemes, we agreed that this process will include a common set of elements:

  • The agenda for each scheme specific technical discussion will look at the different scenarios and possibilities in relation to (a) applicability of the ruling to each scheme (b) remedy options (c) cost impacts and (d) approach to protections going forward.
  • The discussion for each scheme will seek to include staff and employer representatives drawn from the Scheme Advisory Board, Technical Advisory Group (where appropriate), relevant collective bargaining structures, government and scheme actuaries, HM Treasury and the relevant government department.
  • Technical discussions will be scheduled to take place before the start of the remedies hearing.”

*The civil service trade unions are: Prospect, PCS, FDA, GMB, Unite and the POA.