With the cost of providing public sector pensions increasing, reforms were introduced in 2015 to ensure that public service pensions remain affordable and sustainable in the long term, and that the burden on the working population remains proportionate. As part of these reforms, most public sector workers were moved to new pension schemes, while transitional provisions were introduced to allow older public sector workers to remain members of the previous schemes.
The Court of Appeal ruled in December 2018 that these transitional provisions amount to unlawful discrimination and the Government’s attempt to appeal this decision through the Supreme Court has not been successful. As part of the court process, the Government ran a consultation to gather views on how best to rectify the discrimination identified in the policy of transitional protection.
Following consideration of consultation responses, I welcome that the Government will implement the deferred choice underpin (DCU). The DCU will give eligible scheme members a choice at the point their pension becomes payable, whether they wish to receive benefits from their legacy scheme or benefits equivalent to those that would have been available under their reformed schemes in relation to their service between 1 April 2015 and 31 March 2022.
The Government is bringing forward the Public Service Pensions and Judicial Offices Bill, to provide requisite powers to deliver these changes to public service pension schemes.
Now that uncertainty arising from legal proceedings has dissipated, I welcome the Government's announcement that the pause of the cost control element of the public service pension revaluation is to be lifted.
The Court of Appeal's December 2018 ruling found that the part of the 2015 reforms unlawfully discriminated against younger members of the judicial and firefighters’ pension schemes in particular, as transitional protection was only offered to those within 10 years of retirement remained in their legacy pension schemes.
I welcome that the Government is acting to give eligible scheme members a choice at the point their pension becomes payable, whether they wish to receive benefits from their legacy scheme or benefits equivalent to those that would have been available under their reformed schemes in relation to their service between 1 April 2015 and 31 March 2022.
I am also aware that GOV.UK hosts an online pension calculator and user manual for retained firefighter pensions, guidance for which is available here: https://www.gov.uk/government/publications/retained-firefighters-pensions-calculator-and-user-manual
While employees will be compensated in a way that satisfies the Court of Appeal’s judgment, I know the Government remains committed to delivering public sector pensions which are fair to both workers and taxpayers.