Age discrimination in public sector pensions

In 2018 the Court of Appeal made a landmark ruling that reforms to public sector pensions in 2015 were unlawful age discrimination. The Court of Appeal ruled on two Employment Tribunal cases, Sargeant and McCloud that were brought against the Firefighter and Judicial Pension Schemes. The ruling was that the different treatment of existing members of the schemes was unlawful, not the introduction of new schemes or the fact that the new scheme applied to existing scheme members.

In July 2020, the Treasury published its proposals to remedy the discrimination identified in the McCloud and Sargeant cases.  The consultation outlines proposals for all members to be enrolled into the 2015 schemes from the 1 April 2022. Two options were outlined in the consultation along with questions on a range of points. The two options were an Immediate Choice (IC) or a Deferred Choice Underpin (DCU). Prospect members can read our consultation response here.

In February 2021, the Treasury published its consultation response, confirming the age discrimination will be remedied with a Deferred Choice Underpin. Prospect welcomes the Treasury announcing that a deferred choice underpin has been chosen to remedy the unlawful discrimination. We have been clear that the remedy should provide members with an informed decision, have clarity on their pension benefits and not be in a position of detriment. This remedy meets our criteria.

The DCU will provide members with a choice on how they wish their service during the remedy to be treated at retirement. This will enable members to clearly understand what they will receive under either option. For those that have already retired before the remedy is implemented there will be a retrospective choice.

The scheme amendments to implement the remedy will be made in two tranches split between the prospective and retrospective remedy. Each scheme concluded their consultations on the prospective remedy in January 2022 with the scheme amendments made in March 2022.