PENSION CONSULTATION
PUBLIC SERVICE PENSION SCHEMES: CHANGES TO THE TRANSITIONAL ARRANGEMENTS TO THE 2015 SCHEMES
The current consultation is underway and much work has gone on behind the scenes to access the relevant information to respond.
The consultation is available at https://www.finance-ni.gov.uk/consultations/consultation-proposed-changes-transitional-arrangements-2015-schemes
Further information and FAQs agreed by the teaching unions, DE and DoF are available on the UTU website. We would encourage you to begin thinking about the implications for you.
Attached is the Draft UTU Response. Members are invited to:
- Submit further comment to UTU for consideration and/or
- Base a response on the information
The consultation will close at midnight on Wednesday 18 November 2020.
Responses can be submitted by email to: DoFpensionspolicy@finance-ni.gov.uk
Alternatively, please send responses by post to: Public Service Pensions, Policy and Legislation Branch Pensions Division
BACKGROUND
As part of the 2015 reforms to the public service pension schemes members who were within 10 years of retirement remained in their legacy pension schemes.
In 2018 in Great Britain legal cases were taken by some members of the firefighters’ and judicial schemes (McCloud/Sargeant cases) and the Court of Appeal found that this part of the reforms, which was designed to protect members who were close to retirement, unlawfully discriminated against younger members of those schemes who were not offered the same transitional protection arrangements.
Although the rulings of the Court of Appeal in England and Wales are not directly binding here, legal advice confirms that all schemes with the same transitional arrangements must be treated as affected by the decisions and so must be remedied.
The remedy will apply to all members who were in service on or before 31 March 2012 and still in service on or after 1 April 2015.This includes active, deferred or pensioner members and those with a qualifying break in service of less than 5 years.
The consultation focuses on the following:
It is proposed to provide the above members with the option to choose between receiving legacy or reformed scheme benefits in respect of their service during the period 1 April 2015 and 31 March 2022.
To remove the unlawful discrimination identified by the courts it would be sufficient to move all members back into the legacy scheme. However, many members would be better off in the reformed schemes so that approach has not been taken.
As members have a choice to make, the consultation also seeks views on when this would happen. The two choices are outlined as:
- An immediate choice (by approx. 2023)
- A deferred choice underpin (DCU) (at the point when the member retires or takes retirement benefits)
Under either approach members who have already retired or are in receipt of retirement benefits would be asked to make their choices as soon as is practicable after the changes come into play and their choice would be applied retrospectively.
The consultation also seeks views on costings and the provision for benefits after 31 March 2022.
We would encourage you to think about the implications for you and submit a response.