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Update on proposed government changes to public service pension schemes

The Court of Appeal ruling on 'protection', known as the McCloud Judgment

In April 2015, the government put into effect reforms to all main public service pension schemes.

The reforms that took place in 2015 did not apply to those closest to retirement. Those within 10 years of their normal pension age were allowed to remain in their old schemes with ‘transitional protection’.

In December 2018, the Court of Appeal found this to be discriminatory against younger members and the government has since been taking steps to fix this. This has become known as the ‘McCloud judgment’.

The consultation invited responses to inform the changes to pensions

Earlier this year, the government launched a consultation on its proposals for removing the discrimination identified by the Court of Appeal – it was called, ‘Public service pension schemes: changes to the transitional arrangements to the 2015 schemes’.

This consultation closed on 11 October 2020.

Responses to the consultation were welcomed from individuals, organisations and employers. We submitted a response to the consultation as the administrator of the NHS Pension Scheme.

Who will be affected by the changes

The proposed public service pension scheme changes will apply across all the main public service pension schemes, including NHS Pensions.

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, these proposals will apply to you.

This includes members who are currently active, deferred or retired.

The proposals may also apply to you if you‘ve received a spouse's or dependant's pension since 2015, and they joined a public service pension scheme on or before 31 March 2012 and were still a member on 1 April 2015.

What changes are being considered

The changes needed to address the discrimination identified by the Court of Appeal are complex. Depending on your personal circumstances, some members may be better off in their original pension scheme, whilst some may be better off in the new 2015 Scheme.

If you’re affected, you’ll be asked to make a choice of which set of pension scheme benefits you would like to receive for the remedy period, which is from 1 April 2015 to 31 March 2022.

If you’re a deferred member, the government has proposed asking you to make your choice either:

  • in the near future – this is called the Immediate Choice Exercise
  • when you retire, which is called the Deferred Choice Underpin

Respondents to the consultation were asked to provide their feedback on these two options.

The government will outline its final policy when it publishes the outcomes of the consultation.

If you have retired since 1 April 2015, you’ll be asked to choose between the old and new scheme benefits for your service between 1 April 2015 and your retirement.

We’ll keep NHS Pension Scheme members updated

We are awaiting the outcome of the consultation and final proposals from the government.

Once these are published, we will share more information with members of the NHS Pension Scheme and let you know what happens next. You do not have to do anything at this time.

You do not need to have taken part in the consultation to be included in the government’s proposals. If your pension is affected, the government will automatically include you.