Changes to firefighters’ pensions after age discrimination case will be applied to all public sector pensions
The government has confirmed that changes to firefighter’s pensions in 2015 that were ruled to be discriminatory will apply to all public sector schemes.
Under 2015 reforms, older workers in the fire service stayed in existing defined benefit (DB) contribution schemes while younger colleagues had to transfer to less generous pensions.
Last December, the Supreme Court ruled that these changes were discriminatory, and the firefighters were put back on the previous scheme.
In a written statement made yesterday, Treasury secretary Liz Truss said that the government will be engaging with the Employment Tribunal to agree how the discrimination will be remedied across the public sector.
This includes schemes for the NHS, civil service, local government, teachers, police, armed forces, judiciary and fire and rescue workers.
Jon Greer, head of retirement policy at Quilter, says the government will want to move public sector workers onto the 2015 basis as soon as possible.
He says: “This needs to be worked through and means that the younger members are entitled to have their benefits 'levelled up' so that they are treated as having the same protection as the older members, until a non-discriminatory amendment can be made.”
He adds: “The cost to the government is significant since they will have to provide pre-2015 members with higher benefits for a longer period than expected and it’s not clear that the full cost has been factored into the £4 billion cost approximation or if indeed there will be an even bigger hole in the new Prime Minister’s pockets.”
In June, the Supreme Court denied the government an appeal and it was ordered to pay the costs of the case.
The government estimates December’s ruling could cost it around £4 billion a year.
Tamara Calvert, partner at law firm DLA Piper, says: “The government has said that the cost of this ruling could be £4 billion a year in additional liabilities, although unions contest that figure. Whatever the number, it is likely to be large.
“Certainly, there is a lot of work to do to unravel the changes and reknit them into a legally acceptable shape for the future.”
If this happens and the public sector pension reverts back to the old scheme, will the retirement age revert back to the old scheme? Under the old scheme I can claim my pension at 60 in the new scheme it is 67.
If the government is to remedy the disadvantage to younger scheme members then they will have to reinstate those members to the 1995 scheme which has final salary plus and additional lump sum as well as the option to retire with full benefits at 60. The same benefits as those allowed to stay in the scheme. Otherwise there will still be a disadvantage to the discriminated group. It is likely they will then look to move everyone to the new 2015 scheme at some date in the future.
Ill health retirement LGPS
Will this affect pensioners who have recently been pensioned off due to ill health?
Public Sector Pensions
How bloody awful for the rest of us; the Supreme Court Judges have made an appalling mistake. Its ruling is discriminatory against all of us who don't have the privilege of such pensions.Another nail in the economy's coffin. What bloody fools.
Public Sector Pensions
Yes. Whoever advised the government when they came up with the original plans in 2015 did a very shoddy job. They should have done what several of my private sector employers have done over the years and closed the DB scheme to new members and introduced a new scheme (generally DC in private sector) for all new joiners regardless of age etc. My current employer ended their DB scheme for ALL employees preventing accrual of additional years of service; funnily enough that saw most employees over 50 take early retirement...and many came back as contractors on more money!
So is this a short term…
So is this a short term solution, meaning that the government will look to move us back to the old arrangements and then to the 2015 scheme meaning that we will not actually be able to retire at 60 with full benefits?
Prison Staff Pension
Will all Prison Staff employed, medically retired and who have taken voluntary retirement to avoid the changes be compensated
Local Government Scheme
I presume the Labour Government's ending of the 85 year rule for local government is also now illegal.
Public Sector Pensions
Having stumbled on this article how will public sector past and present be kept informed?